Published on: April 1, 2026, 12:57h.
Updated on: April 1, 2026, 12:57h.
- An array of unexpected results may have eased concerns for DraftKings
- Analyst boosts Q1 EBITDA forecast to $154 million
- Indicates the company’s annual guidance is feasible
The NCAA Tournament is anticipated to have a neutral effect on DraftKings’ (NASDAQ: DKNG) performance for the first quarter, with results expected to be released on May 7.
As noted by Citizens Equity Research analyst Jordan Bender, recent tournament outcomes saw fewer upsets, although the early departure of Florida and Duke’s close loss in the Elite Eight may offer some comfort for DraftKings’ earnings. Predictably, sportsbook operators suffer when favorites win, impacting overall betting trends, as public bettors tend to favor the expected winners. Bender advises investors to prioritize DraftKings’ earnings before interest, taxes, depreciation, and amortization (EBITDA) rather than merely focusing on handle growth.
“The outcomes of March Madness (in Q1) appeared neutral, suggesting that overall gaming margins may provide a slight advantage for the quarter,” says Bender. “We adjust our Q1 2026 EBITDA estimate to around $154 million after factoring in Arkansas (~$20 million), believing the full-year EBITDA guidance remains attainable as we exit the first quarter.”
Although DraftKings and competitor FanDuel commenced online sports betting in Arkansas, their operations were limited during the initial quarter.
Prospects for Q2 Stability
Bender notes that DraftKings’ 2026 EBITDA outlook of $700 million to $900 million, announced in February, appears promising in light of March Madness and adjustments related to Arkansas expenses.
The analyst highlights that Q2 traditionally sees stability in sportsbook operations, along with peak parlay margins compared to other quarters. Additionally, DraftKings had a strong performance during the same period last year due to favorable outcomes. This year, the upcoming World Cup in June could serve as a growth driver.
Bender believes the tournament may parallel the Super Bowl for DraftKings, predicting approximately $47 million in gaming revenue and a handle around $600 million for June and July, contingent upon the US team’s success.
“An early exit from the tournament would positively impact company EBITDA in Q2 2026, while advancing further in the tournament would encourage wagering growth but ultimately lower EBITDA in Q2 2026,” the analyst asserts.
Outlook for Prediction Market
DraftKings is projected to allocate $175 million in 2026 for its prediction markets platform, DraftKings Predictions, although this figure may fluctuate. Bender anticipates that spending will ramp up as the World Cup approaches, with an increase expected in the latter half of the year coinciding with the NFL and NBA seasons.
While Bender suggests that the expenses related to prediction markets are largely reflected in DraftKings’ stock price, he warns that some investors could be overly anxious about the scale of expenditures carrying over into the next year.
“Sales and marketing expenses are expected to decline in the coming years, barring new state launches, particularly due to efficiencies gained from the super app,” concludes the analyst.