DraftKings Is Expanding Beyond Traditional Sports Betting. Does Its Foray into Prediction Markets Make the Stock a Buy in 2026?

By Reuben Gregg Brewer – Mar 3, 2026 at 5:15AM ESTKey PointsDraftKings has a strong position in sports betting.To grow its business, it is expanding into the prediction market space.If you have a long-term investment horizon, you should tread with caution.DraftKings (DKNG +0.13%) is making a good business decision by expanding into prediction markets. That, however, doesn't make this stock a buy in 2026. At least not if you have a long-term buy-and-hold mentality. Here's why buying this sports betting company just because of its move into prediction markets could be a mistake. Image source: Getty Images. What does DraftKings do? DraftKings is one of the big players in sports betting. That's a relatively new investment opportunity, though the term investment needs to be taken with a grain of salt. The investment opportunity is for DraftKings, not for the customers who use its service. The service DraftKings is offering is the ability to gamble on sports online. The move into prediction markets is really just a logical extension of the company's focus on gambling. While prediction markets aren't billed as gambling, they are win/lose wagers on specific event outcomes. Only the events in question go well beyond sports to include things like the weather, economic activity, and political outcomes. It would be foolish of DraftKings to miss out on the opportunity to expand its business by offering access to prediction markets. The positive of this setup is that you can watch the prediction market to get a sense of what the future may hold. The downside is that people are basically just gambling on the outcome of an event that isn't tied to sports. The big-picture risk that investors have to consider The problem with owning a gambling business was actually highlighted by DraftKings competitor FanDuel, which is owned by Flutter (FLUT 0.13%). Flutter just reported weak fourth-quarter 2025 earnings, with the CEO telling CNBC that discouraged gamblers tend to stop betting. ExpandNASDAQ: DKNGDraftKingsToday's Change(0.13%) $0.03Current Price$23.87Key Data PointsMarket Cap$12BDay's Range$22.57 - $24.0252wk Range$21.01 - $48.78Volume100Avg Vol14MGross Margin41.25% This is the core problem with DraftKings' entire business model. Right now, people see sports betting and prediction markets as lucrative. If there is a recession and money gets really tight, many current DraftKings users will likely have less cash with which to gamble. They will, in general, get discouraged by broader economic conditions. If the company's users stop using the service, as FanDuel experienced, it won't be good news for DraftKings. Good in the short term, more risk in the long term Leaning into what amounts to more betting is absolutely the right move for DraftKings' business. It might even lead to notable short-term growth for the business. The problem is that it simply doubles down on the big long-term risk that should keep investors awake at night: When consumers become risk-averse, gambling and prediction market activity could dry up very quickly. Conservative investors should probably avoid DraftKings.Read NextMar 3, 2026 •By Reuben Gregg BrewerIs Polymarket Likely to IPO in 2026?Feb 27, 2026 •By Micah ZimmermanDraftKings Is Expanding Its Prediction Market Offerings.

Could This Send the Stock Soaring?Feb 27, 2026 •By Micah Zimmerman3 of the Best Prediction Market Stocks to Buy in 2026Feb 24, 2026 •By Keith NoonanHere's What DraftKings Layoffs Could Mean for the StockFeb 20, 2026 •By Geoffrey SeilerDraftKings Shares Slump Despite Strong Revenue Growth.

Should Investors Buy the Stock on the Dip?Feb 13, 2026 •By Joe TenebrusoWhy DraftKings Stock Dropped TodayAbout the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks MentionedDraftKingsNASDAQ: DKNG$23.87(+0.13%)+$0.03Flutter Entertainment PlcNYSE: FLUT$106.01(-0.13%)-$0.14*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.