Early Predictions Traction Reinforces our Best Smidcap Idea

Research evidence excerpt

Early Predictions Traction Reinforces our Best Smidcap Idea

Gaming & Lodging

DraftKings

TD SECURITIES (USA) LLC QUICK TAKE: COMPANY UPDATE

June 9, 2026

Price: $24.78 (06/8/2026) Early Predictions Traction Reinforces our Best

Price Target: $30.00 Smidcap Idea

BUY (1)

ESG SCORE: 54/100

Lance Vitanza, CFA THE TD COWEN INSIGHT

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Early data suggests DraftKings’ prediction markets are scaling faster than expected,

lance.vitanza@tdsecurities.com

reinforcing the path toward a high-margin exchange model and supporting incremental

Jonnathan Navarrete valuation beyond traditional sports betting despite immaterial contribution today.

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jonnathan.navarrete@tdsecurities.com Prediction Markets Gains Early Traction

Key Data DraftKings’ decision to disclose early prediction market metrics (click here to access) provides

Symbol NASDAQ: DKNG one of the first real-world datapoints supporting our Best Smidcap Ideas note (click here

Market Cap $12.3B to access) and suggests adoption is ramping ahead of expectations. Annualized consumer

volume reached ~$1.3B (+24% m/m) and total traded volume ~$3.1B (+34% m/m), indicating

meaningful early traction. While still immaterial to consolidated financials today, sustained

sequential growth would reinforce the case for a scaled, high-margin exchange model

over time. In our view, this strengthens the argument that the market is underappreciating

DraftKings’ optionality beyond traditional sports betting, though regulatory clarity remains

the key gating factor.

The disclosed metrics also begin to illustrate early marketplace dynamics. The gap between

consumer and total traded volume suggests two-sided activity and emerging liquidity—an

important prerequisite for a functioning exchange. Continued growth in activity and liquidity