What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-14 · 215 added, 188 removed, 719 unchanged (36% of the section changed)

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• Our business model depends upon the continued compatibility between our apps and the major mobile operating systems and upon third-party platforms for the distribution of our product offerings.

If Google Play or the Apple App Store prevents users from downloading our apps or augments the restrictions on advertising to our users, our ability to grow our revenue, profitability and prospects may be adversely affected.

If Google Play or the Apple App Store prevent users from downloading our apps or augment the restrictions on advertising to our users, our ability to grow our revenue, profitability and prospects may be adversely affected.

• We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into our Company or otherwise manage the growth and complexity associated with multiple acquisitions.

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• Our growth prospects depend on the legal status of real-money gaming in various jurisdictions, predominantly within the United States, and legalization may not occur in as many jurisdictions as we expect, or may occur at a slower pace than we anticipate.

Additionally, even if jurisdictions legalize real-money gaming, this may be accompanied by legislative or regulatory restrictions and/or taxes that make it impracticable or less attractive to operate in those jurisdictions, or the process of implementing regulations or securing the necessary licenses to operate in a particular jurisdiction may take longer than we anticipate, or existing laws or regulations may be changed or interpreted adversely, any of which could adversely affect our future results of operations and make it more difficult to meet our expectations for financial performance.

Additionally, even if jurisdictions legalize real-money gaming, this may be accompanied by legislative or regulatory restrictions and/or taxes that make it impracticable or less attractive to operate in those jurisdictions, the process of implementing regulations or securing the necessary licenses to operate in a particular jurisdiction may take longer than we anticipate, or existing laws or regulations may be changed or interpreted adversely, any of which could adversely affect our future results of operations and make it more difficult to meet our expectations for financial performance.

• Our growth prospects and market potential depend on our ability to obtain licenses to operate in a number of jurisdictions, and if we fail to obtain and subsequently maintain such licenses, our business, financial condition, results of operations and prospects could be impaired.

• We have been, and continue to be, the subject of governmental investigations and inquiries with respect to the operation of our businesses, and we could be subject to future governmental investigations and inquiries, legal proceedings and enforcement actions.

Any such investigation, inquiry, proceeding or action, could adversely affect our business.

• Negative events or negative media coverage relating to, or a declining popularity of, sports betting, online sports betting, DFS, the underlying sports or athletes or iGaming, or other negative coverage may adversely impact our ability to retain or attract users, which could have an adverse impact on our business.

Any such investigation, inquiry, legal proceeding or enforcement action could adversely affect our business.

• Negative events or negative media coverage relating to, or a declining popularity of, sports betting, online sports betting, DFS, the underlying sports or athletes, iGaming or prediction markets, or other negative coverage may adversely impact our ability to retain or attract users, which could have an adverse impact on our business.

• Due to the nature of our business, we are subject to taxation in a number of jurisdictions, and changes in, or new interpretations of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our financial condition and results of operations.

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We compete with these other forms of entertainment for the discretionary time and income of our users.

If we are unable to sustain sufficient interest in our Sportsbook, iGaming, DFS and digital lottery courier product offerings in comparison to other forms of entertainment, including new forms of entertainment, our business model may not continue to be viable.

If we are unable to sustain sufficient interest in our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings in comparison to other forms of entertainment, including new forms of entertainment, our business model may not continue to be viable.

The specific industries in which we operate are characterized by dynamic customer demand and technological advances, and there is significant competition among online gaming and entertainment providers.

A number of established, well-financed companies producing online gaming and/or interactive entertainment products and services compete with our product offerings, and other well-capitalized companies may introduce competitive services.

A number of established, well-financed companies producing online gaming, interactive entertainment products, prediction markets and services compete with our product offerings, and other well-capitalized companies may introduce competitive services.

Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business.

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economies experienced tepid growth immediately following the global financial crisis in 2008 – 2009 and more recently experienced a period of increased volatility during the global COVID-19 pandemic.

Ongoing or intensifying economic weakness, including recessions, economic slowdowns, uncertainties in the global financial markets and other adverse economic conditions, including inflation, changes in monetary policy and increased interest rates, actual or perceived instability in the global banking sector, changes in the labor market, supply chain disruptions or other changes in economic and political conditions may result in a material adverse effect on our business, financial condition, results of operations or prospects.

Ongoing or intensifying economic weakness, including recessions, economic slowdowns, uncertainties in the global financial markets and other adverse economic conditions, including inflation, changes in monetary policy and volatile interest rates, actual or perceived instability in the global banking sector, changes in the labor market, supply chain disruptions or other changes in economic and political conditions, may result in a material adverse effect on our business, financial condition, results of operations or prospects.

In addition, changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including fluctuation in stock markets resulting from, among other things, trends in the economy as a whole, may reduce users’ disposable income and advertisers’ budgets.

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We conduct business in numerous countries that carry high levels of currency, political, compliance and economic risk.

For example, we have offices in Ukraine and Israel, and the military conflict between Russia and Ukraine and the evolving conflict in the Middle East and any business interruptions or other spillover effects from such conflicts could adversely affect our operations.

For example, we have offices in Ukraine and Israel, and the military conflict between Russia and Ukraine and conflicts or geopolitical instability in the Middle East and any business interruptions or other spillover effects from such conflicts could adversely affect our operations.

Operations in non-U.S.

jurisdictions can present many risks, including volatility in gross domestic product and rates

of economic growth, financial and governmental instability, cultural differences (such as employment and business practices) and the imposition of exchange and capital controls.

Instability and uncertainties arising from the global geopolitical environment and the evolving international and domestic political, regulatory, and economic landscape, including the potential for changes in global trade policies, including sanctions and trade barriers, and trends such as populism, economic nationalism and negative sentiment toward multinational companies, as well as the cost of compliance with increasingly complex and often conflicting regulations worldwide, can impair our flexibility in modifying our product offerings, marketing, hiring or other strategies for growing our businesses, as well as our ability to improve productivity and maintain acceptable operating margins.

The United States and other countries may implement actions, including trade actions, tariffs, export controls, and sanctions, against other countries or localities, which along with any retaliatory measures could increase costs, adversely affect our operations, or adversely affect our ability to meet contractual and financial obligations.

For example, in response to the conflict between Russia and Ukraine, the U.S.

government and other governments have imposed a series of sanctions against certain Russian government, government-related, and other entities and individuals, together with enhanced export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia.

The governments of other jurisdictions in which we operate, such as the European Union and Canada, have also implemented additional sanctions or other restrictive measures.

Additionally, it is possible that the Russia-Ukraine conflict or the evolving conflict in the Middle East may escalate or expand, and the scope, extent and duration of the military action, current or future sanctions and resulting market and geopolitical disruptions could be significant.

jurisdictions can present many risks, including volatility in gross domestic product and rates of economic growth, financial and governmental instability, cultural differences (such as employment and business practices) and the imposition of exchange and capital controls.

Instability and uncertainties arising from the global geopolitical environment and the evolving international and domestic political, regulatory and economic landscape, including the potential for changes in global trade policies, including sanctions, tariffs and other trade barriers, and trends such as populism, economic nationalism and negative sentiment toward multinational companies, as well as the cost of compliance with increasingly complex and often conflicting regulations worldwide, can impair

our flexibility in modifying our product offerings, marketing, hiring or other strategies for growing our businesses, as well as our ability to improve productivity and maintain acceptable operating margins.

The United States and other countries have and may in the future implement actions, including trade actions, tariffs, export controls, and sanctions, against other countries or localities, which along with any retaliatory measures could increase costs, adversely affect our operations or adversely affect our ability to meet contractual and financial obligations.

For example, since 2025, the United States has announced new tariffs and trade measures with respect to certain U.S.

trading partners, which have had and could continue to have a significant impact on the macroeconomic environment and could adversely affect demand for our products and services.

Additionally, it is possible that the Russia-Ukraine conflict or conflicts and geopolitical instability in the Middle East may escalate or expand, and the scope, extent and duration of the military action, current or future sanctions and resulting market and geopolitical disruptions could be significant.

While to date sanctions and export controls have not had a material impact on our business, it is possible that these measures, as well as any countervailing responses, could adversely affect us and/or our supply chain, business counterparties or customers.

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Our business is particularly sensitive to reductions from time to time in discretionary consumer spending.

Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control.

Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce our users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as sports betting, online gaming or DFS.

Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer preferences, both of which are difficult to predict and beyond our control.

Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce our users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as sports betting, online gaming or DFS, or certain investment activities, such as prediction markets.

As a result, we cannot ensure that the demand for our product offerings will remain consistent.

Adverse developments affecting economies throughout the world, and particularly in the United States, including a general tightening of availability of credit, decreased liquidity in certain financial markets, inflation, increased interest rates, foreign exchange fluctuations, increased energy costs, the impact of higher tariffs or escalating trade disputes, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a reduction in discretionary spending on leisure activities, such as our Sportsbook, iGaming, DFS and digital lottery courier product offerings.

Adverse developments affecting economies throughout the world, and particularly in the United States, including a general tightening of availability of credit, decreased liquidity in certain financial markets, volatile inflation and interest rates, foreign exchange fluctuations, increased energy costs, the impact of higher tariffs or escalating trade disputes, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a reduction in discretionary spending on leisure activities, such as our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings.

We may experience fluctuations in our operating results, which could make our future results difficult to predict and could cause our operating results to fall below expectations.

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Our financial results in any given quarter may be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including the impact of seasonality and our betting results, and the other risks and uncertainties set forth herein.

In particular, our Sportsbook and DFS operations have significant exposure to, and may be materially impacted by, sporting events and seasons, which can result in short-term volatility in betting win margins and user engagement, thus impacting revenues.

While we have been able to forecast revenues from our DFS business with greater precision than for newer product offerings, we cannot provide assurances that consumers will engage with our DFS product offering on a consistent basis.

Consumer engagement with our Sportsbook, iGaming, DFS and digital lottery courier product offerings may decline or

fluctuate as a result of a number of factors, including the popularity of the underlying sports, the user’s level of satisfaction with our product offerings, our ability to improve and innovate, our ability to adapt our product offerings, outages and disruptions of online services, the availability of live sporting events, the services offered by our competitors, our marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, among others.

In particular, our Sportsbook, DFS and prediction markets operations have significant exposure to, and may be materially impacted by, sporting events and seasons, which can result in short-term volatility in betting win margins and user engagement, thus impacting revenues.

Consumer engagement with our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings may decline or fluctuate as a result of a number of factors, including the popularity of the underlying sports, the user’s level of satisfaction with our product offerings, our ability to improve and innovate, our ability to adapt our product offerings, outages and disruptions of online services, the availability of live sporting events, the services offered by our competitors, our marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, among others.

Any decline or fluctuation in the recurring portion of our business may have a negative impact on our business, financial condition, results of operations or prospects.

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When looking at bets across a period of time, however, these losses can potentially be significant.

Our quarterly financial results may also fluctuate based on whether we pay any jackpots to our iGaming users during the relevant quarter.

As part of our iGaming product offering, we offer progressive jackpot games.

Each time a progressive jackpot game is played, a portion of the amount wagered by the user is contributed to the jackpot for that specific game or group of games.

Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount.

Once a jackpot is won, the progressive jackpot is reset with

a predetermined base amount.

While we maintain a reserve for these progressive jackpots, the cost of the progressive jackpot payout would be a cash outflow for our business in the period in which it is won with a potentially significant adverse effect on our financial condition and cash flows.

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You should not rely upon our historical financial results as indicators of our future financial performance, and our financial results and stock price may be volatile.

We have a history of losses and we may continue to incur losses in the future.

Since we were incorporated in 2011, we have experienced cumulative net losses and negative cash flows from operations.

We experienced net losses in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) of $507.3 million and $802.1 million in the years ended December 31, 2024 and 2023, respectively.

We may continue to experience losses in the future, and we cannot assure you that we will achieve profitability.

We may continue to incur significant losses in future periods.

We have a history of losses and we may not be consistently profitable in the future.

We achieved profitability on a net income basis for the year ended December 31, 2025.

However, we have historically experienced cumulative net losses and negative cash flows from operations.

We recognized net income in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) of $3.7 million in the year ended December 31, 2025 and net loss in accordance with U.S.

GAAP of $507.3 million in the year ended December 31, 2024.

We may continue to experience losses in the future, and we cannot assure you that we will maintain or increase our level of profitability.

We expect our operating expenses to increase in the future as we expand our operations.

If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve or maintain profitability.

If our revenue does not grow at a greater rate than our expenses, we will not be able to maintain or increase profitability.

We may incur significant losses in the future for many reasons, including those described in the other risks and uncertainties described in this Annual Report.

Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods.

If our expenses exceed our revenue, our business may be negatively impacted, and we may never achieve or maintain profitability.

If our expenses exceed our revenue, our business may be negatively impacted, and we may not maintain or increase profitability.

Our results of operations fluctuate due to seasonality and other factors and, therefore, our periodic operating results are not guarantees of future performance.

Our Sportsbook and DFS operations fluctuate due to seasonal trends and other factors.

Our Sportsbook, DFS and prediction markets operations fluctuate due to seasonal trends and other factors.

A majority of our current Sportsbook and DFS handle and entry fees are and will continue to be generated from bets placed on, or contests relating to, the NFL and the NBA.

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In addition, the NFL and NBA have their own respective off-seasons, which may cause decreases in our revenues during such periods.

In addition, we believe that significant sporting events such as

the playoffs and championship games tend to impact, among other things, revenues from operations, key metrics and customer activity, and, as such, our revenues may be impacted when those games occur.

Our revenues have been, and in the future may be, affected by the scheduling of major sporting events that do not occur annually, such as the World Cup, or the cancellation or postponement of sporting events, such as the postponement of the 2020 Summer Olympic Games that took place in Summer 2021 due to the global COVID-19 pandemic.

In addition, certain individuals or teams advancing or failing to advance and their scores and other results within specific tournaments, games or events has in the past, and may in the future, enhance the impact of seasonality and other factors that impact our financial performance.

In addition, we believe that significant sporting events such as the playoffs and championship games tend to impact, among other things, revenues from operations, key metrics and customer activity, and, as such, our revenues may be impacted when those games occur.

In addition, certain individuals or teams advancing or failing to advance and their scores and other results within specific tournaments, games or events has in the past enhanced, and may in the future enhance, the impact of seasonality and other factors that impact our financial performance.

The success, including win or hold rates, of existing or future sports betting and iGaming product offerings depends on a variety of factors and is not completely controlled by us.

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As a result of the variability in these factors, the actual win rates on our iGames and sports bets may differ from the theoretical win rates we have estimated and could result in the winnings of our users exceeding those anticipated.

The variability of win rates (hold rates) also has the potential to negatively impact our financial condition, results of operations, and cash flows.

The variability of win rates (hold rates) also has the potential to negatively impact our business, financial condition, results of operations, and prospects.

Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner.

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Our competitors or other third parties may incorporate AI in a similar or different manner, and may do so more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.

Additionally, if the content, analyses, materials, software, or recommendations that AI produces or assists in producing are, or are alleged to be, infringing or otherwise violating of others’ rights (including intellectual property rights), or illegal, we may be subject to legal liability or our business, reputation, financial condition, and results of operations may otherwise be adversely affected.

Third-party AI tools may be deemed to be infringing on third party intellectual property rights (including as a result of being trained on unauthorized materials) or may contain insufficient safeguards, matters over which we may have no or limited visibility or control.

Additionally, if the content, analyses, materials, software, or recommendations that AI produces or assists in producing (or actions that AI systems, including AI agents, take) are, or are alleged to be, infringing or otherwise violating of others’ rights (including intellectual property rights), or illegal, we may be subject to legal liability or our business, reputation, financial condition and results of operations may otherwise be adversely affected.

In addition, customers or other third parties may use AI-powered bots or similar computer programs to interfere with or attempt to gain an unfair advantage in connection with our products or offerings, which could adversely affect our business and results of operations.

The use of AI (and, in particular, generative AI) can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate, misleading or are otherwise flawed, which could harm our reputation and business.

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If we are unable to assert proprietary rights in such outputs or inputs against use by third parties, we may experience competitive harm, and our financial condition and results of operations may be adversely affected.

We may experiment with or deploy AI agents or other AI-enabled automation that can plan, make decisions, and take actions with reduced human prompting or oversight.

Such autonomous systems may increase the risk of unintended, unauthorized or harmful outcomes, including where such systems interact with other systems or third-party tools, data sources or vendors.

In addition, the use of AI may result in violations of applicable data security or data privacy laws, or in cybersecurity incidents that implicate the personal data of end customers, employees or other third parties.

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AI is subject to a dynamic and rapidly evolving legal and regulatory environment, the extent and scope of which may in many instances be uncertain and may vary (or conflict) across jurisdictions.

Compliance with existing and potential government regulation of AI, may require significant resources, including to develop, test and maintain platforms, offerings, services, and

features to help us implement AI in accordance with applicable law, and to minimize other adverse effect on our results of operations.

Such laws and regulations (which have begun to take effect) impose compliance obligations and penalties and may require us to make modifications to our products, services, policies, procedures and business practices.

Compliance with existing and potential government regulation of AI may require significant resources, including to develop, test and maintain platforms, offerings, services and features to help us implement AI in accordance with applicable law, and to minimize other adverse effect on our results of operations.

We rely on information technology and other systems and services, and any failures, errors, defects or disruptions in our systems or services could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects.

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Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the quality of our product offerings.

In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, which may only become evident after we have started to fully use the underlying equipment or software, that could further degrade the user experience or increase our costs.

In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, and which may only become evident after we have started to fully use the underlying equipment or software, that could further degrade the user experience or increase our costs.

As such, we could fail to continue to effectively scale and grow our technical infrastructure to accommodate increased demands.

In addition, our business may be subject to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss, terrorism, cybersecurity incidents, public health emergencies or other catastrophic events.

We believe that if our users have a negative experience with our product offerings, or if our brand or reputation is negatively affected, users may be less inclined to continue or resume utilizing our product offerings or to recommend our product offerings to other potential users.

We believe that if our users have a negative experience with our product offerings, or if our brand or reputation is negatively affected, our users may be less inclined to continue or resume utilizing our product offerings or to recommend our product offerings to other potential users.

As such, a failure or significant interruption in our service could harm our reputation, business and operating results.

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The secure maintenance and transmission of user information is a critical element of our operations.

Our information technology and other systems that maintain and transmit user information, or that of service providers, business counterparties or employees have in the past been, and in the future may be, compromised by a malicious third-party penetration of our network security, or that of a third-party service provider or business counterparty, or impacted by intentional or unintentional

actions or inaction by our employees, or those of a third-party service provider or business counterparty.

As a result of any such cybersecurity incident, our users’ information and funds may be lost, disclosed, accessed or taken without our users’ consent.

We have experienced, and we expect that in the future we will experience, cybersecurity incidents, attempts to breach our information technology systems and other similar incidents.

For example, we have been, and expect that we will continue to be, subject to attempts to gain unauthorized access to or through our information systems or those we develop for our customers, whether by our employees or third-party service providers or business counterparties, including cyber-attacks by computer programmers and hackers who may develop and deploy viruses, worms or other malicious software programs into our information technology systems and infrastructure.

programmers and hackers who may develop and deploy viruses, worms or other malicious software programs into our information technology systems and infrastructure.

To date, these cybersecurity incidents have not had a material impact on our operations or financial results, but we cannot provide assurance that they will not have a material impact in the future.

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Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We continue to devote significant resources to protect against cybersecurity incidents and we may need to in the future to address problems caused by breaches, including notifying affected users, investigating the matter, and responding to any resulting litigation or regulatory investigation or action, which in turn, diverts resources from the growth and expansion of our business.

We continue to devote significant resources to protect against cybersecurity incidents and we may need to do so in the future to address problems caused by breaches, including notifying affected users, investigating the matter and responding to any resulting litigation or regulatory investigation or action, which in turn, diverts resources from the growth and expansion of our business.

We rely on Amazon Web Services to deliver our product offerings to users, and any disruption of or interference with our use of Amazon Web Services could adversely affect our business, financial condition, results of operations and prospects.

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In addition, any changes in these third parties’ service levels may adversely affect our ability to meet the requirements of our users.

Since our technology’s continuing and uninterrupted performance is critical to our success, sustained or repeated system failures would reduce the attractiveness of our product offerings.

Since our technology’s

continuing and uninterrupted performance is critical to our success, sustained or repeated system failures would reduce the attractiveness of our product offerings.

It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand and the usage of our product offerings increases.

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Although alternative providers could host our product offerings on a substantially similar basis to AWS, transitioning the cloud infrastructure currently hosted by AWS to alternative providers could potentially be disruptive and we could incur significant one-time costs.

Any of the above circumstances or events may harm our reputation and brand, reduce the availability or usage of our technology, lead to a significant loss of revenue, increase our costs and impair our ability to attract new users, any of which could adversely affect our business, financial condition and results of operations.

We rely on third-party providers to validate the identity and identify the location of our users, and if such providers fail to perform adequately or provide accurate information or we do not maintain business relationships with them, our business, financial condition and results of operations could be adversely affected.

We rely on third-party providers to validate the identity and identify the location of our users, and if such providers fail to perform adequately or provide accurate information or we do not maintain business relationships with them, our business, financial condition, results of operations and prospects could be adversely affected.

There is no guarantee that the third-party geolocation and identity verification systems that we rely on will perform adequately, or be effective.

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As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software.

Moreover, we cannot assure you that our processes for controlling our use of open source software in our technology will be effective.

If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing our product offerings on terms that are not economically feasible, to re-engineer our technology, to discontinue or delay the provision of our product offerings if re-engineering could not be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and results of operations.

We rely on third-party payment processors to process deposits and withdrawals made by our users, and if we cannot manage our relationships with such third parties and other payment-related risks, our business, financial condition and results of operations could be adversely affected.

Moreover, we cannot assure you that our

processes for controlling our use of open source software in our technology will be effective.

If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face infringement or other liability or be required to seek costly licenses from third parties to continue providing our product offerings on terms that are not economically feasible, to re-engineer our technology, to discontinue or delay the provision of our product offerings if re-engineering could not be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition, results of operations and prospects.

We rely on third-party payment processors to process deposits and withdrawals made by our users, and if we cannot manage our relationships with such third parties and other payment-related risks, our business, financial condition, results of operations and prospects could be adversely affected.

We rely on a limited number of third-party payment processors to process deposits and withdrawals made by our users.

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We are also subject to a number of other laws and regulations relating to the payments we accept from our users, including with respect to money laundering, money transfers, privacy and information security.

If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our product offerings less convenient and attractive to our users.

If any of these events were to occur, our business, financial condition and results of operations could be adversely affected.

If we fail to comply with applicable rules and regulations (including anti-money laundering regulations), we may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our product offerings less convenient and attractive to our users.

If any of these events were to occur, our business, financial condition, results of operations and prospects could be adversely affected.

For example, if we are deemed to be a money transmitter as defined by applicable regulations, we could be subject to certain laws, rules and regulations enforced by multiple authorities and governing bodies in the United States and numerous state and local agencies who may define money transmitter differently.

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Additionally, outside of the United States, we could be subject to additional laws, rules and regulations related to the provision of payments and financial services, and if we expand into new jurisdictions, the foreign regulations and regulators governing our business that we are subject to will expand as well.

If we are found to be a money transmitter under any applicable regulation and we are not in compliance with such regulations, we may be subject to fines or other penalties in one or more jurisdictions levied by federal or state or local regulators, including state attorneys general, as well as those levied by foreign regulators.

If we are found to be a money transmitter under any applicable regulation and we are not in compliance with such regulation, we may be subject to fines or other penalties in one or more jurisdictions levied by federal or state or local regulators, including state attorneys general, as well as those levied by foreign regulators.

In addition to fines, penalties for failing to comply with applicable rules and regulations could include criminal and civil proceedings, forfeiture of significant assets or other enforcement actions.

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Additionally, our payment processors require us to comply with payment card network operating rules, which are set and interpreted by the payment card networks.

The payment card networks could adopt new operating rules or interpret or

reinterpret existing rules in ways that might prohibit us from providing certain product offerings to some users, be costly to implement or difficult to follow.

The payment card networks could adopt new operating rules or interpret or reinterpret existing rules in ways that might prohibit us from providing certain product offerings to some users, be costly to implement or difficult to follow.

We have agreed to reimburse our payment processors for fines they are assessed by payment card networks if we or our users violate these rules.

Any of the foregoing risks could adversely affect our business, financial condition and results of operations.

We rely on third-party sports data providers for real-time and accurate data for sporting events for our Sportsbook and DFS products, and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected.

We rely on third-party sports data providers for real-time and accurate data for sporting events for our Sportsbook and DFS products, and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, results of operations and prospects could be adversely affected.

We rely on third-party sports data providers, such as SportRadar and Genius Sports, among others, to obtain accurate information regarding schedules, results, performance and outcomes of sporting events for our Sportsbook and DFS products.

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We have experienced, and may continue to experience, errors in these data feeds, which may result in us incorrectly settling bets or ranking contestants in their DFS contests.

If we cannot adequately resolve the issue with our users, our users may have a negative experience with our product offerings, our brand or reputation may be negatively affected, our users may be less inclined to continue or resume utilizing our product offerings or recommend our product offerings to other potential users and we may be subject to litigation.

If we cannot adequately resolve the issue with our users, our users may have a

negative experience with our product offerings, our brand or reputation may be negatively affected, our users may be less inclined to continue or resume utilizing our product offerings or recommend our product offerings to other potential users and we may be subject to litigation.

As such, a failure or significant interruption in our data feed service may harm our reputation, business and operating results.

Furthermore, if any of our sports data partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame, or at all.

Any of these risks could increase our costs and adversely affect our business, financial condition and results of operations.

Further, any negative publicity related to any of our third-party partners, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure.

We rely on other third-party service providers and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected.

Our success depends in part on our relationships with other third-party service providers.

Furthermore, if any of our sports data providers terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider and may not be able to secure similar terms or replace such providers in an acceptable time frame, or at all.

Any of these risks could increase our costs and adversely affect our business, financial condition, results of operations and prospects.

Further, any negative publicity related to any of our third-party providers, including any publicity related to regulatory concerns, could adversely affect our reputation and brand and could potentially lead to increased regulatory or litigation exposure.

We rely on other third-party service providers, and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, results of operations and prospects could be adversely affected.

Our success depends in part on our relationships with third-party service providers.

For example, we rely on third parties for content delivery, load balancing and protection against distributed denial-of-service attacks.

If those providers do not perform adequately, our users may experience issues or interruptions with their product offering experiences.

Furthermore, if any of our partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame, or at all.

Furthermore, if any of our providers terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame, or at all.

We also rely on other software and services supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages.

Any of these risks could increase our costs and adversely affect our business, financial condition and results of operations.

Any of these risks could increase our costs and adversely affect our business, financial condition, results of operations and prospects.

Further, any negative publicity related to any of our third-party providers, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure.

We incorporate technology from third parties into our product offerings.

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If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our product offerings, which could adversely affect our business, financial condition and results of operations.

If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation.

We rely on third-party futures commission merchants, exchanges and market makers for our prediction markets product offerings, and if such third parties do not perform adequately or terminate their relationships with us, our prediction markets and our business, financial condition, results of operations and prospects could be adversely affected.

We rely on third-party market infrastructure providers, including Wedbush Securities Inc.

(“Wedbush”) in its capacity as our futures commission merchant (“FCM”) and Chicago Mercantile Exchange Inc.

(“CME”) and Crypto.com | Derivatives North America (“CDNA”), each in their capacities as the DCMs on which our prediction markets are listed and derivatives clearing organizations (“DCO”) that clear and settle such contracts.

If any of these third parties (other than CME or CDNA in their capacities as DCOs) terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, or if any such third party restricts the services it provides to us (including services relating to prediction markets) or is unwilling or unable to continue to support our product offerings, we would need to find an alternate FCM, DCM or DCO.

We may not be able to secure similar terms or replace such providers in an acceptable time frame, or at all.

Any such changes could increase our costs, require us to modify or limit our prediction markets offerings or delay the launch of new products.

We also rely upon CME’s and CDNA’s market makers that provide liquidity in certain of our prediction markets.

If any of these third parties terminates its relationship with CME or CDNA, as applicable, restricts the services it provides or is unwilling

or unable to continue to support our product offerings, our users may have a negative experience with our prediction markets offerings, our brand and reputation may be negatively affected, and users may be less inclined to continue or resume using our prediction markets or to recommend our offerings to others.

Any such changes could require us to modify or limit our prediction markets offerings, delay the launch of new products, and adversely affect our business, financial condition, results of operations and prospects.

The software, technology and services provided by Wedbush, CME, CDNA and CME’s and CDNA’s market makers may not meet our expectations, may contain errors or vulnerabilities or may be compromised or experience interruptions or outages.

For example, issues with order routing, trade execution, clearing or settlement, market data, connectivity, pricing or quoting could cause us to lose the ability to list or maintain certain prediction markets, impair customers’ ability to place or close positions, delay settlement or result in us incorrectly displaying markets or outcomes.

Our ability to provide a reliable prediction markets experience depends on these third parties operating effectively.

If we cannot adequately resolve issues that arise with these providers or with our customers, our users may have a negative experience with our prediction markets offerings, our brand and reputation may be negatively affected, and users may be less inclined to continue or resume using our prediction markets or to recommend our offerings to others.

Any of these events could adversely affect our business, financial condition and results of operations.

Wedbush, CME, and CDNA are also subject to regulation and supervision, including by the CFTC and, in the cases of CME and CDNA in their capacities as DCMs, as self-regulatory organizations with rulemaking and enforcement authority over their markets and participants.

Changes in laws, regulations or regulatory interpretations, or regulatory inquiries, investigations or enforcement actions involving Wedbush, CME, or CDNA could cause them to change, limit or cease certain services, including support for prediction markets, or to impose new or more stringent requirements on us or our users.

CME and CDNA, in particular, have discretion to adopt, interpret and enforce rules governing product listing and delisting, trading halts, position limits, margin requirements, fee schedules and clearing eligibility that directly affect the economics, liquidity and availability of our prediction markets.

If we fail to comply with applicable rules or contractual obligations relating to our use of these services, we could be subject to penalties, higher fees, limitations on our access to certain markets or services or other adverse consequences.

Because our prediction markets offering relies on a limited number of key third-party providers for FCM, exchange, clearing and market-making services, we are exposed to significant third-party and concentration risk.

Furthermore, any negative publicity related to Wedbush, CME, CDNA, CME’s market makers, CDNA’s market makers, or other third parties, including publicity related to regulatory concerns, operational failures or financial condition, could adversely affect our reputation and brand and could potentially lead to increased regulatory or litigation exposure for us.

Any of the foregoing risks could increase our costs and adversely affect our ability to offer prediction markets, which could in turn adversely affect our business, financial condition and results of operations.

If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition, results of operations and prospects and could subject us to investigations and litigation.

We have in the past incurred, and may in the future incur, losses from various types of financial fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds.

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In the event of the occurrence of any such issues with our existing technology or product offerings, substantial engineering and marketing resources and management attention may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.

In addition, any misappropriation of, or access to, users’ or other proprietary information or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, force us to modify our business practices, damage our reputation and expose us to claims from our users, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.

to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, force us to modify our business practices, damage our reputation and expose us to claims from our users, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.

For example, beginning in November 2022, DraftKings was the target of potential credential stuffing attacks, in which it appears that one or more bad actors may have obtained login credentials from a non-DraftKings source and used the credentials to access certain DraftKings players’ accounts.

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A substantial portion of our network infrastructure is provided by third parties, including internet service providers and other technology-based service providers.

See “—We rely on Amazon Web Services to deliver our product offerings to users and any disruption of or interference with our use of Amazon Web Services could adversely affect our business, financial condition, results of operations and prospects.” We require technology-based service providers to implement cyber-attack-resilient systems and processes.

See “—We rely on Amazon Web Services to deliver our product offerings to users, and any disruption of or interference with our use of Amazon Web Services could adversely affect our business, financial condition, results of operations and prospects” above.

We require technology-based service providers to implement cyber-attack-resilient systems and processes.

However, if internet service providers experience service interruptions, including because of cybersecurity incidents, or due to an event causing an unusually high volume of internet use, communications over the internet may be interrupted and impair our ability to conduct our business.

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Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide.

Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cybersecurity incidents, which causes a loss of our users’ property or personal information or a delay or interruption in our online services and product offerings and e-commerce services, including our ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to our product offerings, cause us to incur significant legal, remediation and notification

costs, degrade the customer experience and cause users to lose confidence in our product offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We rely on strategic relationships with casinos, tribes and horse-tracks in order to be able to offer our Sportsbook and iGaming product offerings in certain jurisdictions.

If we cannot establish and manage such relationships with such partners, our business, financial condition and results of operations could be adversely affected.

If we cannot establish and manage such relationships with such partners, our business, financial condition, results of operations and prospects could be adversely affected.

Under the sports betting and iGaming laws of certain states, online sportsbook and iGaming are limited to a finite number of retail operators, such as casinos, tribes or tracks, who own a “skin” or “skins” under that state’s law.

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If we cannot establish, renew or manage such relationships, those relationships could terminate, and we would not be allowed to operate in those jurisdictions until we enter into new ones.

As a result, our business, financial condition and results of operations could be adversely affected.

As a result, our business, financial condition results of operations and prospects could be adversely affected.

Our growth depends, in part, on the success of our strategic relationships with third parties.

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While we believe there are other third parties that could drive users to our product offerings, adding or transitioning to them may disrupt our business and increase our costs.

In the event that any of our existing relationships or our future relationships fails to provide services to us in accordance with the terms of our arrangement, or at all, and we are not able to find suitable alternatives, this could impact our ability to attract consumers cost effectively and harm our business, financial condition, results of operations and prospects.

In the event that any of our existing relationships or our future relationships fail to provide services to us in accordance with the terms of our arrangement, or at all, and we are not able to find suitable alternatives, this could impact our ability to attract consumers cost effectively and harm our business, financial condition, results of operations and prospects.

Our growth prospects may suffer if we are unable to develop successful product offerings or if we fail to pursue additional product offerings.

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In 2024, with the acquisition of Jackpocket, we added a new digital lottery courier product offering.

In 2025, we launched our prediction markets product offering, DraftKings Predictions.

We have rapidly expanded and we anticipate expanding further as new product offerings mature and as we pursue our growth strategies.

The industries in which we operate are subject to rapid and frequent changes in standards, technologies, products and services, as well as in customer demands and expectations and regulations.

The industries in which we operate are subject to rapid and changes in standards, technologies, products and services, as well as in customer demands and expectations and regulations.

We must continuously make decisions regarding in which product offerings and technology we should invest to meet customer demand in compliance with evolving industry standards and regulatory requirements and must continually introduce and successfully market new and innovative technologies, product offerings and enhancements to remain competitive and effectively stimulate customer demand, acceptance and engagement.

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For example, we have historically observed that revenue from our DFS product offering tends to decline in a state following the launch of our Sportsbook product offering in that state.

In addition, our entry into and potential expansion of prediction markets through regulated event contracts may involve heightened legal, regulatory, compliance, reputational and operational risks, and may require significant investment and management attention, any of which could delay or constrain launches, limit adoption, increase costs or adversely affect our business.

Furthermore, such expansion of our business increases the complexity of our business and places an additional burden on our management, operations, technical systems and financial resources, and we may not recover the often-substantial up-front costs of developing and marketing new product offerings or recover the opportunity cost of diverting management and financial resources away from other product offerings.

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We have used and expect to continue to use a variety of free and paid marketing channels, in combination with compelling offers and exciting games to achieve our objectives.

For paid marketing, we leverage a broad array of advertising channels, including television, radio, social media platforms, such as Facebook, Instagram, X (formerly Twitter) and Snapchat, affiliates and paid and organic search, and other digital channels, such as mobile display.

For paid marketing, we leverage a broad array of advertising channels, including television, radio, social media platforms, such as TikTok, Facebook, Instagram, X (formerly Twitter) and Snapchat, affiliates and paid and organic search, and other digital channels, such as mobile display.

If the search engines on which we rely modify their algorithms, change their terms around gaming, or if the prices at which we may purchase listings increase, then our costs could increase, and fewer users may click through to our website.

If links to our website are not displayed prominently in online search results, if fewer users click through to our website, if our other digital marketing campaigns are not effective, or if the costs of attracting users with any of our current methods significantly increase, then our ability to efficiently attract new users could be reduced, our revenue could decline and our business, financial condition and results of operations could be harmed.

In addition, our ability to increase the number of users of our product offerings will depend on continued user adoption of Sportsbook, iGaming, DFS, digital lottery courier, and other product offerings.

Growth in the gaming industry and the level of demand for and market acceptance of our product offerings will be subject to a high degree of uncertainty.

We cannot assure you that consumer adoption of our product offerings will continue or exceed current growth rates, or that the industry will achieve more widespread acceptance.

If links to our website are not displayed prominently in online search results, if fewer users click through to our website, if our other digital marketing campaigns are not effective or if the costs of attracting users with any of our current methods significantly increase, then our ability to efficiently attract new users could be reduced, our revenue could decline and our business, financial condition, results of operations and prospects could be harmed.

In addition, our ability to increase the number of users of our product offerings will depend on continued user adoption of Sportsbook, iGaming, DFS, digital lottery courier, prediction markets and other product offerings.

Growth in the industries in which we operate and the level of demand for and market acceptance of our product offerings will be subject to a high degree of uncertainty.

We cannot assure you that consumer adoption of our product offerings will continue or exceed current growth rates, or that the industries in which we operate will achieve more widespread acceptance.

Additionally, as technological or regulatory standards change and we modify our product offerings to comply with those standards, we may need users to take certain actions to continue playing, such as performing age verification checks or accepting new terms and conditions.

Users may stop using our product offerings at any time, including if the quality of the user experience, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the customer experience generally offered by competitive product offerings.

Users may stop using our product offerings at any time, including if the quality of the user experience, such as our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the customer experience generally offered by competitive product offerings.

Our core values of focusing on our users first and acting for the long term may conflict with the short-term interests of our business.

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The substantial majority of our users access our Sportsbook, iGaming, DFS and digital lottery courier product offerings primarily on mobile devices, and we believe that this will continue to be increasingly important to our long-term success.

The substantial majority of our users access our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings primarily on mobile devices, and we believe that this will continue to be increasingly important to our long-term success.

Our business model depends upon the continued compatibility between our apps and the major mobile operating systems.

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In addition, we rely upon third-party platforms for distribution of our product offerings.

Our DFS product offering is delivered as a free application through both the Apple App Store and the Google Play Store and is also accessible via mobile and traditional websites.

Our DFS and prediction markets product offerings are delivered as a free application through both the Apple App Store and the Google Play Store and are also accessible via mobile and traditional websites.

Our Sportsbook and iGaming product offerings are primarily distributed through the Apple App Store and a traditional website.

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The Google Play Store and Apple App Store are global application distribution platforms and the main distribution channels for our apps.

As such, the promotion, distribution and operation of our apps are subject to the respective distribution platforms’ standard terms and policies for application developers, which are broad and subject to frequent changes and interpretation.

Such changes could limit, eliminate or otherwise interfere with our products, our ability to distribute our applications through the platforms, our ability to update our applications, including to make bug fixes or other feature updates or upgrades, the features we provide, the manner in which we market our products, our ability to access native functionality, or other aspects of mobile devices, and our ability to access information about our users that they collect.

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We are dependent on the interoperability of our technology with popular mobile operating systems, technologies, networks and standards that we do not control, such as the Android and iOS operating systems, and any changes, bugs, technical or regulatory issues in such systems, our relationships with mobile manufacturers and carriers, or in their terms of service or policies that degrade our product offerings' functionality, reduce or eliminate our ability to distribute our product offerings, give preferential treatment to competitive product offerings, limit our ability to deliver high quality product offerings, or impose fees or other charges related to delivering our product offerings, could adversely affect our product offering usage and monetization on mobile devices.

Moreover, our Sportsbook and DFS product offerings require high-bandwidth data capabilities in order to place time-sensitive bets.

Moreover, our Sportsbook, DFS and prediction markets product offerings require high-bandwidth data capabilities in order to place time-sensitive bets.

If the growth of high-bandwidth capabilities, particularly for mobile devices, is slower than we expect, our user growth, retention and engagement may be seriously harmed.

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In particular, any future changes to the iOS or Android operating systems may impact the accessibility, speed, functionality and other performance aspects of our product offerings, which issues are likely to occur in the future from time to time.

In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or

use of the Internet, including laws governing Internet neutrality, could decrease the demand for our product offerings and increase our cost of doing business.

In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or use of the internet, including laws governing internet neutrality, could decrease the demand for our product offerings and increase our cost of doing business.

Specifically, any laws that would allow mobile providers in the United States to impede access to content, or otherwise discriminate against content providers like us, such as providing for faster or better access to our competitors, over their data networks, could have a material adverse effect on our business, financial condition, results of operations and prospects.

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Also, technologies have been, and may continue to be, developed by companies, such as Apple and Google, that, among other things, block or limit the display of our advertisements and some or all third-party cookies on mobile and desktop devices, limit cross-site and cross-device attribution, prevent measurement outside a narrowly-defined attribution window and prevent advertisement re-targeting and optimization.

These developments could require us to make changes to how we collect information on, and track the actions of, our users and impact our marketing activities.

These developments could require us to make changes to how we collect information on, and track the

actions of, our users and impact our marketing activities.

While these changes have not had a material adverse impact on our business to date, they could materially impact the way we do business in the future, and if we or our advertising partners are unable to quickly and effectively adjust to new changes, there could be an adverse effect on our business, financial condition, results of operations or prospects.

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We intend to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new product offerings and features or enhance our existing product offerings and features, improve our operating infrastructure or acquire complementary businesses, personnel and technologies.

Accordingly, we may need to engage in equity or debt financings to secure additional funds, which may involve increased funding costs due to rising interest rates.

To the extent we use our available funds or borrow under our revolving credit facility, we may need to raise additional funds, and we cannot assure you that additional financing will be available to us on favorable terms, or at all.

In addition, our ability to borrow under our revolving credit facility relies on our lenders’ continued operation and ability to fund, as well as our compliance with the terms of the credit agreement.

Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, capital markets conditions and other factors.

Accordingly, we may need to engage in equity or debt financings to secure additional funds, which may involve increased funding costs due to rising interest rates, credit market volatility and other factors.

To the extent we use our available funds or borrow under our revolving credit facility or our Term B Facility, we may need to raise additional funds, and we cannot assure you that additional financing will be available to us on favorable terms, or at all.

In addition, our ability to borrow under our revolving credit facility or our Term B Facility relies on our lenders’ continued operation and ability to fund, as well as our compliance with the terms of, the credit agreement.

Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, capital markets conditions, credit ratings agency decisions and other factors.

If we raise additional funds by issuing equity, equity-linked or debt securities or borrowing loans, those securities or loans may have rights, preferences or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing stockholders may experience dilution.

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We may decide to pursue acquisitions with which our investors may not agree, and we cannot assure you that any acquisition or investment will be successful or otherwise provide a favorable return on investment.

In addition, acquisitions and the integration thereof, such as

the Jackpocket Transaction, require significant time and resources and place significant demands on our management, as well as on our operational and financial infrastructure.

In addition, acquisitions and the integration thereof, such as the Jackpocket Transaction (as defined below), require significant time and resources and place significant demands on our management, as well as on our operational and financial infrastructure.

In addition, if we fail to successfully complete transactions or integrate new teams, or integrate the products and technologies associated with these acquisitions into our Company, our business could be materially harmed.

Acquisitions have, and may continue to, expose us to operational challenges and risks, including:

Acquisitions have exposed, and may continue to, expose us to operational challenges and risks, including:

• the ability to profitably manage acquired businesses or successfully integrate the acquired businesses’ operations, personnel, financial reporting, accounting and internal controls, technologies and products into our business;

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We also may be required to use a substantial amount of our cash or issue debt or equity securities to complete an acquisition, which could deplete our cash reserves and/or dilute our existing stockholders.

In addition, there has been, and we expect there will continue to be, significant competition within the gaming industry for acquisitions of businesses, technologies and assets.

In addition, there has been, and we expect there will continue to be, significant competition within certain industries in which we operate for acquisitions of businesses, technologies and assets.

As such, even if we are able to identify an acquisition that we would like to pursue, the target may be acquired by another strategic buyer or we may otherwise not be able to complete the acquisition on commercially reasonable terms, or at all.

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In the past we have been party to, and we may in the future increasingly face the risk of, claims, lawsuits and other proceedings involving competition and antitrust, intellectual property, privacy, consumer protection, accessibility claims, securities, tax, labor and employment, commercial disputes, services and other matters.

See “Business — Legal Proceedings.” Litigation to defend us against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, results of operations and prospects.

See “Note 16, Leases, Commitments and Contingencies” to the consolidated financial statements.

Litigation to defend us against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, results of operations and prospects.

Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or in payments of substantial monetary damages or fines, the posting of bonds requiring significant collateral, letters of credit or similar instruments, or we may decide to settle lawsuits on similarly unfavorable terms.

These proceedings could also result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain product offerings

or requiring a change in our business practices in costly ways or requiring development of non-infringing or otherwise altered products or technologies.

These proceedings could also result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain product offerings or requiring a change in our business practices in costly ways or requiring development of non-infringing or otherwise altered products or technologies.

Litigation and other claims and regulatory proceedings against us could result in unexpected disciplinary actions, expenses and liabilities, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Marketplace, which we discontinued in 2024, facilitated the purchase and sale of nonfungible tokens (NFTs).

The Company is defending litigation claiming Marketplace NFTs were “securities” under federal and state securities laws.

While the Company believes that Marketplace NFTs were not securities, the determination by the court in which the litigation is pending, another court, or by the SEC or another state or foreign regulatory authority is subject to uncertainty and if determined or re-interpreted in the future to have been a security, we may be subject to damages in litigation, regulatory scrutiny, investigations, fines, and other penalties.

In developing, launching and operating Marketplace, the Company analyzed whether the NFTs created for, offered, sold, or traded on, Marketplace (before it was discontinued in 2024) would be deemed “securities” under applicable law.

The Company believes that such NFTs were not securities under the U.S.

federal securities laws based on the statutory definition of a security under the U.S.

federal securities laws, Supreme Court decisions applying the definition of security, other judicial decisions applying the definition of a security, and factors articulated in public communications by representatives of the SEC, no-action letters, and enforcement actions.

The Company is defending litigation filed in March 2023 in federal district court in Massachusetts alleging, among other things, that Marketplace NFTs were securities that were required to be, but were not, registered with the SEC in accordance with federal and Massachusetts law, and that Marketplace was a securities exchange that was not registered as required by federal and Massachusetts law.

In addition, beginning in July 2023, the Company received subpoenas from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts seeking information concerning, among other things, Marketplace and NFTs that were sold on Marketplace, and related matters, and from the SEC seeking documents concerning, among other things, the blockchain on which NFTs that were sold on Marketplace were minted and digital assets and validator nodes associated with that blockchain, and related matters.

Our belief that Marketplace NFTs were not securities is a risk-based assessment and not a legal standard nor is it binding on any regulatory authority or court and, notwithstanding our conclusions, we could be subject to legal or regulatory action in the event a court, the SEC or a state or foreign regulatory authority were to determine that a particular NFT offered, sold, or traded on Marketplace was a “security” under applicable law.

The legal test for determining whether a particular digital asset, such as Marketplace NFTs, is a security is a complex and fact-driven analysis and the SEC generally does not provide advance guidance or confirmation on the status of any particular digital asset as a security.

The classification of a digital asset as a security may have wide-ranging implications.

For example, a security may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in a transaction that is exempt from registration.

Persons that effect transactions in assets that are securities in the United States may be subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers to trade digital assets that are securities in the United States are generally subject to registration as securities exchanges, or must qualify for an exemption.

Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency.

Foreign jurisdictions may have similar licensing, registration, and qualification requirements.

If the court in which the litigation is pending, another court, the SEC or another state or foreign regulatory authority makes a determination that Marketplace NFTs were securities under applicable law, we could be subject to, among other things, damages in litigation, regulatory scrutiny, investigations, sanctions, civil monetary penalties, injunctions, fines, reputational harm and other penalties, which could negatively impact our business, operating results, and financial condition.

Our business is subject to a variety of U.S.

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Any change in existing regulations or their interpretation, or the regulatory climate applicable to our product offerings and services, or changes in tax rules and regulations or interpretation thereof related to our product offerings and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.

We are generally subject to laws and regulations relating to fantasy sports, sports betting and iGaming in the jurisdictions in which we conduct our business or in some circumstances, in those jurisdictions in which we offer our services or those are

available, as well as the general laws and regulations that apply to all e-commerce businesses, such as those related to privacy and personal information, tax and consumer protection.

We are generally subject to laws and regulations relating to fantasy sports, sports betting, iGaming, digital lottery courier services and prediction markets in the jurisdictions in which we conduct our business or, in some circumstances, in those jurisdictions in which we offer our services or in which our services are available, as well as the general laws and regulations that apply to all e-commerce businesses, such as those related to privacy and personal information, tax and consumer protection.

These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results.

In particular, some jurisdictions have introduced legislation or regulations attempting to restrict or prohibit online sport betting and online gaming, while others have taken the position that online sports betting and online gaming should be licensed and regulated and have adopted or are in the process of considering enabling legislation and regulations.

In particular, some jurisdictions have introduced legislation or regulations attempting to restrict or prohibit online sports betting and online gaming,

while others have taken the position that online sports betting and online gaming should be licensed and regulated and have adopted or are in the process of considering enabling legislation and regulations.

Additionally, some jurisdictions in which we may operate could presently be unregulated or partially regulated and therefore more susceptible to the enactment or change of laws and regulations.

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Since the repeal of PASPA, several states (and Washington D.C.) have legalized online sports betting.

To the extent new real money gaming or sports betting jurisdictions are established or expanded, we cannot guarantee that we will be successful in entering such new jurisdictions or expanding our business or user base in line with the growth of existing jurisdictions.

To the extent new real money gaming or sports betting jurisdictions are established or amended, we cannot guarantee that we will be successful in entering such new jurisdictions or expanding our business or user base in line with the growth of existing jurisdictions.

If we are unable to effectively develop and operate directly or indirectly within these new jurisdictions or if our competitors are able to successfully enter jurisdictions that we cannot access or where we face other restrictions, there could be a material adverse effect on our business, operating results and financial condition.

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Governmental authorities could view us as having violated local laws, despite our efforts to obtain all applicable licenses or approvals.

There is also a risk that civil and criminal proceedings, including class actions, brought by or on behalf of prosecutors or public entities or incumbent monopoly providers, or private individuals, could be initiated against us, Internet service providers, credit card and other payment processors, advertisers and others involved in the offering of Sportsbook, iGaming, DFS and digital lottery courier product offerings.

There is also a risk that civil and criminal proceedings, including class actions, brought by or on behalf of prosecutors or public entities or incumbent monopoly providers, or private individuals, could be initiated against us, internet service providers, credit card and other payment processors, advertisers and others involved in the offering of Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings.

Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon us or our licensees or other business counterparties, while diverting the attention of key executives.

Such proceedings could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as impact our reputation.

lottery courier product offerings (or that existing laws or regulations in those jurisdictions will not be changed or interpreted negatively).

We also operate our prediction markets product offering, which includes various event contracts, in 47 jurisdictions.

Event contracts, whether offered by us or others, have drawn scrutiny from federal and state regulators and resulted in litigation.

The outcome of these cases or new cases filed, or new laws or regulations applicable to prediction markets, changes in the interpretation of existing laws or regulations, or enhanced enforcement of these laws and regulations could prevent us from offering, or continuing to offer, some or all types of event contracts in the future, including in specific states.

In particular, federal or state courts, including appellate courts, among other things may conclude that state actions attempting to prevent the trading of CFTC-regulated event contracts are not preempted by the CEA, or that outcome-based event contracts are not “swaps” falling within the jurisdiction of the CFTC, which could require us to cease offering certain event contracts in one or

more states (or across all jurisdictions in which we operate) and could lead to adverse judicial decisions and regulatory action.

Any such judicial decisions could also result in us becoming subject to various new state-specific regulations relating to or implicating other event contracts, which could further limit our ability to offer access to event contracts within such state(s).

In addition, any such federal or state court decision or action by state or federal regulators could negatively impact or result in a suspension, revocation of, or any other adverse action against, our IB and DCM licenses and our gaming licenses in the states in which we operate our Sportsbook, or iGaming, DFS or digital lottery courier products, which would limit or suspend our ability to offer such products within such states.

Furthermore, changes in CFTC or other regulatory policy or future CFTC regulatory action regarding event contracts that seek to ban or more heavily regulate event contracts, particularly event contracts that we offer related to sporting events, could also require us to cease offering event contracts or materially impact our ability to offer event contracts and we may be required to cease offering such contracts in one or more jurisdictions in which we operate either immediately or with minimal advance notice to customers.

In June 2024, the CFTC proposed a rule amendment, which was withdrawn in February 2026 that would have prohibited us from offering election, sporting and award show event contracts in the future.

In connection with the withdrawal of the proposed rule amendment, the CFTC Chairman indicated the potential for new event contracts rulemaking in the future.

While the substance and outcome of such potential rulemaking is uncertain, the CFTC could take new regulatory action or impose broader and more expansive regulations with respect to these or other event contracts.

If our ability to offer event contracts (either entirely or in certain categories) in one or more jurisdictions in which we operate is impaired or our gaming licenses are impacted, the perception of our brand may suffer, we may be unable to retain customers, and we may incur significant costs, which could have an adverse effect on our business, financial condition, results of operations or prospects.

There can be no assurance that legally enforceable legislation will not be proposed and passed in jurisdictions relevant or potentially relevant to our business to prohibit, legislate or regulate various aspects of Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings (or that existing laws or regulations in those jurisdictions will not be changed or interpreted negatively).

Compliance with any such legislation may have a material adverse effect on our business, financial condition and results of operations, either as a result of our determination that a jurisdiction should be blocked, or because a local license or approval may be costly for us or our business counterparties to obtain and/or such licenses or approvals may contain other commercially undesirable conditions.

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Our future effective tax rates, financial condition and results from operations could be unfavorably affected by changes in the tax rates in jurisdictions where our income is earned, by changes in the tax rules and regulations or the interpretation of tax rules and regulations in the jurisdictions in which we do business or by changes in the valuation of our deferred tax assets.

For example, the Organization for Economic Cooperation and Development’s Base Erosion and Profit Sharing Plans, which implements a minimum global effective tax rate of 15%, has aspects that affect accounting periods within our group starting on or after January 1, 2024.

We continue to monitor potential impacts related to this legislation as countries implement it and the OECD provides additional guidance.

As additional jurisdictions enact such legislation, our effective tax rate and cash tax payments could increase.

For example, changes include the enactment of the One Big Beautiful Bill Act (“OBBBA”) and implementation by certain jurisdictions of the Base Erosion and Profit Shifting 2.0 Pillar Two global minimum tax (“GMT”) developed by the Organisation for Economic Co-operation and Development (“OECD”).

Further, on January 5, 2026, the OECD released administrative guidance detailing a side-by-side arrangement exempting U.S.-incorporated parent companies from certain aspects of the GMT following agreement on key elements by the OECD, which are effective beginning January 1, 2026, subject to country specific enactment.

As additional jurisdictions enact or change certain laws, our effective tax rate and cash tax payments could increase.

Compliance with data privacy and security laws and regulations could require us to incur significant expenses, and failure to comply with such laws and regulations could carry penalties and potential criminal sanctions, as well as risk of litigation.

In the context of our European Union ("EU") operations, we may be subject to specific compliance obligations under the General Data Protection Regulation (EU) 2016/679 (the “GDPR”) and associated laws and regulations in different EU Member States in which we operate.

In addition, portions of our business established outside the EU may be required to comply with the requirements of the GDPR and associated EU legislation with respect to the offering of products or services to, or the monitoring of, individuals in the EU.

We may also be subject to the local privacy and data protection laws of the EU Member States in which we offer products or services.

In the context of our European Union ("EU") operations, we may be subject to specific compliance obligations under the GDPR and associated laws and regulations in different EU member states in which we operate.

In addition, portions of our business established outside the EU may be required to comply with the requirements of the GDPR and associated EU legislation with respect to the monitoring of individuals in the EU.

We may also be subject to the local privacy and data protection laws of the EU member states.

Failure to comply with these EU data protection and privacy laws can carry penalties and potential criminal sanctions, as well as the risk of litigation.

In addition, Directive 2002/58/EC (as amended by Directive 2009/136/EC) (together, the “e-Privacy Directive”) governs, among other things, the use of cookies and the sending of electronic direct marketing within the EU and, as such, may apply to our marketing activities within the EU.

Following Brexit, the UK has adopted its own data protection and direct marketing laws (the “UK data protection laws”) which are currently based on the corresponding EU legislation.

Following Brexit, the United Kingdom (“UK”) has adopted its own data protection and direct marketing laws (the “UK data protection laws”) which are currently based on the corresponding EU legislation.

Our UK-facing operations may therefore be subject to specific compliance obligations under the UK data protection laws.

In our efforts to comply with the GDPR, the e-Privacy Directive and the UK data protection laws, we rely on positions and interpretations of the law that have yet to be fully tested before the relevant courts and regulators.

While the UK data protection laws are currently similar to the corresponding EU laws, it is possible that those laws will diverge in the future;

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There is also a risk that it may become more difficult to make cross-border transfers of personal data, as a result of diverging data protection regimes in the territories where our customers are located and the territories where our operations are based.

If a regulator or court of competent jurisdiction determined that one or more of our compliance efforts does not satisfy the applicable requirements of the GDPR or the e-Privacy Directive, or the UK data protection laws, or if any party brought a claim in this regard, there could be potential governmental or regulatory investigations, enforcement actions, regulatory fines, compliance orders, litigation or public statements against us by consumer advocacy groups or others, and that could cause customers to lose trust in us and damage our reputation.

If a regulator or court of competent jurisdiction determined that one or more of our compliance efforts does not satisfy

the applicable requirements of the GDPR or the e-Privacy Directive or the UK data protection laws, or if any party brought a claim in this regard, there could be potential governmental or regulatory investigations, enforcement actions, regulatory fines, compliance orders, litigation or public statements against us by consumer advocacy groups or others, and that could cause customers to lose trust in us and damage our reputation.

Likewise, a change in guidance could be costly and have an adverse effect on our business.

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States also impose substantial tax rates on online sports betting and iGaming revenue in addition to, in the case of online sports betting, the federal excise tax of 25 basis points on the amount of each wager.

As most state product taxes apply to various measures of modified gross profit, tax rates, whether federal- or state-based, that are higher than we expect will make it more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions may adversely impact our profitability.

Therefore, even in cases in which a jurisdiction licenses and regulates Sportsbook, iGaming, DFS or digital lottery couriers, the licensing and regulatory regimes can vary considerably in terms of their business-friendliness and at times may be intended to provide incumbent operators with advantages over new licensees.

As most state product taxes apply to various measures of modified gross profit, federal or state tax rates that are higher than we expect will make it more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions may adversely impact our profitability.

Therefore, even in cases in which a jurisdiction licenses and regulates Sportsbook, iGaming, DFS, digital lottery couriers or prediction markets, the licensing and regulatory regimes can vary considerably in terms of their business-friendliness and at times may be intended to provide incumbent operators with advantages over new licensees.

Therefore, certain “liberalized” regulatory regimes are considerably more commercially attractive than others.

Failure to comply with regulatory requirements in a particular jurisdiction, or the failure to successfully obtain a license or permit applied for in a particular jurisdiction, could impact our ability to comply with licensing and regulatory requirements in other jurisdictions, or could cause the rejection of license applications or cancellation of existing licenses in other jurisdictions, or could cause financial institutions, online and mobile platforms, advertisers and distributors to stop providing services to us which we rely upon to receive payments from, or distribute amounts to, our users, or otherwise to deliver and promote our product offerings and services.

Compliance with the various regulations applicable to fantasy sports and real money sports betting and iGaming is costly and time-consuming.

Compliance with the various regulations applicable to fantasy sports and real money sports betting, iGaming and prediction markets is costly and time-consuming.

Regulatory authorities at the non-U.S.

federal, state and local levels have broad powers with respect to the regulation and licensing of fantasy sports and real money gaming operations and may revoke, suspend, condition or limit our fantasy sports or real money gaming licenses, impose substantial fines on us and take other actions, any one of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

federal, state and local levels have broad

powers with respect to the regulation and licensing of fantasy sports, real money gaming operations and prediction markets and may revoke, suspend, condition or limit our fantasy sports or real money gaming licenses, access to prediction markets, impose substantial fines on us and take other actions, any one of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

These laws and regulations are dynamic and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current laws or regulations or enact new laws and regulations regarding these matters.

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Non-compliance with any such law or regulations could expose us to claims, proceedings, litigation and investigations by private parties and regulatory authorities, as well as substantial fines and negative publicity, each of which may materially and adversely affect our business.

Any fantasy sports or real money gaming license could be revoked, suspended or conditioned at any time.

The loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility for such a license in another jurisdiction, and

any of such losses, or potential for such loss, could cause us to cease offering some or all of our product offerings in the impacted jurisdictions.

Any fantasy sports or real money gaming license or access to prediction markets could be revoked, suspended or conditioned at any time.

The loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility for such a license in another jurisdiction, and any of such losses, or potential for such loss, could cause us to cease offering some or all of our product offerings in the impacted jurisdictions.

We may be unable to obtain or maintain all necessary registrations, licenses, permits or approvals and could incur fines or experience delays related to the licensing process, which could adversely affect our operations.

Our delay or failure to obtain or maintain licenses in any jurisdiction may prevent us from distributing our product offerings, increasing our customer base and/or generating revenues.

We cannot assure you that we will be able to obtain and maintain the licenses and related approvals necessary to conduct our Sportsbook, iGaming, DFS and digital lottery courier operations.

We cannot assure you that we will be able to obtain and maintain the licenses and related approvals necessary to conduct our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets operations.

Any failure to maintain or renew our existing licenses, registrations, permits or approvals could have a material adverse effect on our business, financial condition, results of operations and prospects.

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If we fail to obtain and maintain licenses in large jurisdictions or in a greater number of mid-market jurisdictions, this may prevent us from expanding the footprint of our product offerings, increasing our user base and/or generating revenues.

We cannot be certain that we will be able to obtain and maintain licenses and related approvals necessary to conduct our Sportsbook, iGaming, DFS and digital lottery courier operations in a timely manner or at all.

We cannot be certain that we will be able to obtain and maintain licenses and related approvals necessary to conduct our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets operations in a timely manner or at all.

Any failure to obtain and maintain licenses, registrations, permits or approvals could have a material adverse effect on our business, financial condition, results of operations and prospects.

We have been, and continue to be, the subject of governmental investigations and inquiries with respect to the operation of our businesses, and we could be subject to future governmental investigations and inquiries, legal proceedings and enforcement actions.

Any such investigation, inquiry, proceeding or action, could adversely affect our business.

Any such investigation, inquiry, legal proceeding or enforcement action could adversely affect our business.

We have received formal and informal inquiries, from time to time, from government authorities and regulators, including tax authorities and gaming regulators, regarding compliance with laws and other matters, and we may receive such inquiries in the future, particularly as we grow and expand our operations.

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In addition, it is possible that there may be such a high volume of trading during any particular period that even automated systems would be unable to address and mitigate all risks.

Any significant losses on a gross-win basis could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Any significant losses on a gross-win basis could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, if a jurisdiction where we hold or wish to apply for a license imposes a high turnover tax for betting (as opposed to a gross-win tax), this would also impact profitability, particularly with high value/low margin bets, and likewise have a material adverse effect on our business.

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It is generally commonplace worldwide for operators to void bets associated with such palpable errors, and, in most mature jurisdictions, these bets can be voided without regulatory approval at operator discretion.

In the U.S., it is unclear long term if state-by-state regulators will consistently approve the voiding of bets or re-setting odds to correct odds on such bets.

In some cases, we require regulatory approval to void palpable errors ahead of time.

If regulators were to not allow voiding of bets associated with large obvious errors in odds making, we could be subject to covering significant liabilities.

jurisdictions where DraftKings operates regulatory approval is required to void palpable errors.

State-by-state regulators may not consistently approve the voiding of bets or re-setting odds to correct odds on such bets.

If regulators do not allow voiding of bets associated with large obvious errors in odds making, we could be subject to covering significant liabilities.

We follow the industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise;

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We cannot assure you that all state legislation and regulators will always allow operators to execute limits at the individual customer level, or at their sole discretion.

Negative events or negative media coverage relating to, or a declining popularity of, sports betting, online sports betting, DFS, or the underlying sports or athletes, or iGaming in particular, or other negative coverage may adversely impact our ability to retain or attract users, which could have an adverse impact on our business.

Negative events or negative media coverage relating to, or a declining popularity of, sports betting, online sports betting, DFS, prediction markets, the underlying sports or athletes, or iGaming in particular, or other negative coverage may adversely impact our ability to retain or attract users, which could have an adverse impact on our business.

Public opinion can significantly influence our business.

Unfavorable publicity regarding us, for example, our product changes, product quality, litigation or regulatory activity or regarding the actions of third parties with whom we have relationships or the underlying sports (including declining popularity of the sports or athletes), could seriously harm our reputation.

In addition, a negative shift in the perception of sports betting and iGaming by the public or by politicians, lobbyists or others could affect future legislation of sports betting and iGaming, which could cause jurisdictions to abandon proposals to legalize sports betting and iGaming, thereby limiting the number of jurisdictions in which we are permitted to operate.

In addition, a negative shift in the perception of sports betting, iGaming and prediction markets by the public or by politicians, lobbyists or others could affect future legislation of sports betting, iGaming and prediction markets, which could cause jurisdictions to abandon proposals to legalize sports betting, iGaming and prediction markets, thereby limiting the number of jurisdictions in which we are permitted to operate.

Furthermore, illegal betting activity by athletes could result in negative publicity for our industry and could harm our brand reputation.

Negative public perception could also lead to new restrictions on, or the prohibition of, iGaming or sports betting in jurisdictions in which we currently operate.

Negative public perception could also lead to new restrictions on, or the prohibition of, sports betting, iGaming or prediction markets in jurisdictions in which we currently operate.

Such negative publicity could also adversely affect the size, demographics, engagement and loyalty of our customer base and result in decreased revenue or slower user growth rates, which could seriously harm our business.

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Although financial institutions and payment processors are permitted to provide services to us and others in our industry, banks, credit card issuers and payment processing service providers may be hesitant to offer banking and payment processing services to real money gaming and fantasy sports businesses.

Consequently, those businesses involved in our industry, including our own, may encounter difficulties in establishing and maintaining banking and payment processing relationships with a full scope of services and generating market rate interest.

If we are unable to maintain our bank accounts or our users are unable to use their credit cards, bank accounts or e-wallets to make deposits and withdrawals from our product offerings, it would make it difficult for us to operate our business, increase our operating costs, and pose additional operational, logistical and security challenges which could result in an inability to implement our business plan.

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As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls.

Section 404 of Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting.

Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting.

It also requires our independent registered public accounting firm to attest to our evaluation of our internal control over financial reporting with our Annual Report.

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Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of assessments by our independent registered public accounting firm and their attestation reports.

If we are unable to certify the effectiveness of our internal controls, or if our internal controls have a material weakness, we may not detect errors in a timely fashion, our consolidated financial statements could be misstated, we could be subject to regulatory scrutiny and a loss of confidence by stakeholders, which could harm our business and adversely affect the market price of our common stock.

Failure to comply with Section 404 of Sarbanes-Oxley could potentially subject us to sanctions or investigations by the SEC, FINRA or other regulatory authorities, as well as increase the risk of liability arising from litigation based on securities law.

If we are unable to certify the effectiveness of our internal controls, or if our internal controls have a material weakness, we may not detect errors in a timely fashion, our consolidated financial statements could be misstated or we could be subject to regulatory scrutiny and a loss of confidence by stakeholders, which could harm our business and adversely affect the market price of our common stock.

Failure to comply with Section 404 of Sarbanes-Oxley could potentially subject us to sanctions or investigations by the SEC, Financial Industry Regulatory Authority (FINRA) or other regulatory authorities, as well as increase the risk of liability arising from litigation based on securities law.

Continued growth and success will depend on the performance of our current and future employees, including certain key employees.

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We cannot provide assurance that we will be able to attract or retain such highly qualified personnel in the future.

In addition, the loss of employees or the inability to hire additional skilled employees as necessary could result in significant disruptions to our business, and the integration of replacement personnel could be time-consuming and expensive and cause additional disruptions to our business.

consuming and expensive and cause additional disruptions to our business.

If we do not succeed in attracting, hiring and integrating qualified personnel, or retaining and motivating existing personnel, we may be unable to grow effectively, and our business could be seriously harmed.

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As part of obtaining real money gaming licenses, the responsible gaming authority will generally determine suitability of certain directors, officers and employees and, in some instances, significant stockholders.

The criteria used by gaming authorities to make determinations as to who requires a finding of suitability or the suitability of an applicant to conduct gaming operations varies among jurisdictions but generally requires extensive and detailed application disclosures followed by a thorough investigation.

The criteria used by gaming authorities to make determinations as to who requires a finding of suitability or the suitability of an applicant to conduct gaming operations varies among jurisdictions but generally requires application disclosures followed by a thorough investigation.

If any gaming authority with jurisdiction over our business were to find an applicable officer, director, employee or significant stockholder of ours unsuitable for licensing or unsuitable to continue having a relationship with us, we would be required to sever our relationship with that person or entity.

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For example, compliance with the 2017 United States Tax Cuts and Jobs Act (the “TCJA”) required the collection of information not regularly produced within our Company, the use of estimates in our consolidated financial statements and the exercise of significant judgment in accounting for its provisions.

As of December 31, 2024, 54 countries in Europe, the Middle East, Africa, Asia, and the Americas have enacted various aspects of the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting (“BEPS”) 2.0 Pillar Two global minimum tax (“GMT”).

In 35 of those countries, the GMT is effective beginning in 2024.

Based on currently enacted law, the impact of GMT on our 2024 results was not material.

The gaming industry also represents a significant source of tax revenue to the jurisdictions in which we operate.

Gaming companies and business-to-business providers in the gaming industry (directly and/or indirectly by way of their commercial relationships with operators) are currently subject to significant taxes and fees in addition to normal corporate income taxes, and

such taxes and fees are subject to increase at any time.

From time to time, various legislators and other government officials have proposed and adopted changes in tax laws, or in the administration or interpretation of such laws, affecting the gaming industry.

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In addition, economic and political pressures to increase tax revenue in various jurisdictions may make resolving tax disputes favorably more difficult.

We are currently under IRS audit for prior tax years, with the primary unresolved issues relating to excise taxation of fantasy sports contests and informational reporting and withholding.

For example, we are currently under audit by the IRS for prior tax years, with the primary unresolved issues relating to excise taxation of fantasy sports contests and informational reporting and withholding.

These IRS examinations are premised, in whole or in part, on whether DFS contests constitute “wagering” for purposes of the Internal Revenue Code.

The IRS’s position in these examinations is informed by a Generic Legal Advice Memorandum released by the Office of the Chief Counsel of the IRS in 2020, which concluded that a DFS operator is liable for federal wagering excise taxes at a rate of 0.25% or 2% (depending on whether the wager is accepted in a state which authorizes such wager), as well as occupational excise taxes and related registration requirements.

Based on these positions, the IRS has asserted that our DFS entry fees are subject to a federal wagering excise tax at a rate of 0.25%, certain customer winnings should have been reported as wagering income on IRS Form W-2G, we are liable for related withholding obligations, including backup withholding in certain circumstances, and wagering winnings earned by non-U.S.

participants may constitute U.S.-source income subject to U.S.

withholding tax.

The final resolution of that audit, and other audits or litigation, may differ from the amounts recorded in our consolidated financial statements included herein and may materially affect our consolidated financial statements in the period or periods in which that determination is made.

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In the United States and internationally, we have filed various applications to protect aspects of our intellectual property, and currently hold a number of issued patents and registered trademarks in multiple jurisdictions.

In the future we may acquire additional patents or patent portfolios or trademarks, which could require significant cash expenditures.

However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us and pending and future trademark and patent applications may not be approved.

In the future we may obtain additional patents or patent portfolios, copyrights or trademarks, which could require significant cash expenditures.

In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business.

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Circumstances outside our control could pose a threat to our intellectual property rights.

For example, effective intellectual property protection may not be available in all jurisdictions in which our Sportsbook, iGaming, DFS and digital lottery courier product offerings are accessible.

For example, effective intellectual property protection may not be available in all jurisdictions in which our Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings are accessible.

Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective.

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Any unauthorized disclosure or use of our intellectual property could make it more expensive to do business, thereby harming our operating results.

Furthermore, if we are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished, and competitors may be able to more effectively mimic our product offerings and services.

Furthermore, if we are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third parties, the value of our

brand and other intangible assets may be diminished, and competitors may be able to more effectively mimic our product offerings and services.

Any of these events could have a material adverse impact on our business.

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We cannot assure you that these third-party licenses, or support for such licensed products and technologies, will continue to be available to us on commercially reasonable terms, if at all.

In the event that we cannot renew

and/or expand existing licenses, we may be required to discontinue or limit our use of the product offerings that include or incorporate the licensed intellectual property.

In the event that we cannot renew and/or expand existing licenses, we may be required to discontinue or limit our use of the product offerings that include or incorporate the licensed intellectual property.

Some of our license agreements contain minimum guaranteed royalty payments to the third party.

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The regulatory review process and licensing requirements also may preclude us from using technologies owned or developed by third parties if those parties are unwilling to subject themselves to regulatory review or do not meet regulatory requirements.

Certain gaming authorities require gaming manufacturers to obtain approval before engaging in certain transactions, such as acquisitions, mergers, reorganizations, financings, stock offerings and share repurchases.

Obtaining such approvals can be costly and time consuming, and we cannot assure you that such approvals will be granted or obtained on acceptable terms, or at all, or that the approval process will not result in delays or disruptions to our strategic objectives.

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However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure.

Moreover, we cannot be sure our existing insurance coverage – including errors and omissions coverage – will continue to be available on acceptable terms or that our insurers will not deny coverage as to all or part of any future claim or loss.

Moreover, we cannot be sure our existing insurance coverage – including coverage for errors and omissions – will continue to be available on acceptable terms or that our insurers will not deny coverage as to all or part of any future claim or loss.

Any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis.

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dollar, and as a result, we will be subject to foreign currency fluctuation due to operations by subsidiaries in non-U.S.

jurisdictions, including our SBTech operations and the offering of our Sportsbook and iGaming product offerings in Ontario, Canada, and the fact that certain of our revenues, operating expenses and assets and liabilities are non-U.S.

jurisdictions, including Canada, and the fact that certain of our revenues, operating expenses and assets and liabilities are non-U.S.

dollar denominated.

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In addition, we may incur substantial additional debt in the future.

The terms of the indenture governing our zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million, which includes proceeds from the full exercise of the over-allotment option (collectively, the “Convertible Notes”), and the credit agreement with various financial institutions as lenders and issuing banks, which provides the Company with a revolving line of credit of up to $500.0 million , under which $10.0 million in letters of credit were issued with $490.0 million available for borrowing as of December 31, 2024, permit us to incur additional debt, subject to certain limitations set forth therein.

The terms of the indenture governing our zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million, which includes proceeds from the full exercise of the over-allotment option (collectively, the “Convertible Notes”), and the credit agreement with various financial institutions as lenders and issuing banks, as amended by the first amendment, dated March 4, 2025, which provides the Company with a revolving line of credit of up to $500.0 million , under which $10.0 million in letters of credit were issued with $490.0 million available for borrowing as of December 31, 2025, and incremental term loans in an aggregate principal amount of $600.0 million, under which $595.5 million aggregate principal amount was outstanding as of December 31, 2025, permit us to incur additional debt, subject to certain limitations set forth therein.

If new debt is incurred in addition to our current debt levels, the foregoing risks may be augmented.

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This activity may increase (or reduce the size of any decrease in) the market price of our Class A common stock or the Convertible Notes at that time.

In addition, each Hedge Counterparty or an affiliate thereof may modify its hedge position by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of Convertible Notes).

A common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of Convertible Notes).

Any of these activities could cause or prevent an increase or decline in the market price of our Class A common stock or the Convertible Notes.

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We are subject to counterparty risk with respect to the Capped Call Transactions.

The Hedge Counterparties to the Capped Call Transactions are financial institutions, and we will be subject to the risk that the Hedge Counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations

under the Capped Call Transactions.

Our exposure to the credit risk of the Hedge Counterparties under the Capped Call Transactions will not be secured by any collateral.

In the past, economic conditions have resulted in the actual or perceived failure or financial difficulties of a number of financial institutions, including the bankruptcy of Lehman Brothers Holdings Inc.

and various of its affiliates.

In the past, economic conditions have resulted in the actual or perceived failure or financial difficulties of a number of financial institutions, including the bankruptcy of Silicon Valley Bank.

If a Hedge Counterparty becomes subject to insolvency proceedings, we will be an unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with them.

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• lack of adjacent competitors;

• our operating results failing to meet the expectation of securities analysts or investors in a particular period;

• our operating results failing to meet the expectations of securities analysts or investors in a particular period;

• changes in financial estimates and recommendations by securities analysts concerning DraftKings or the industries in which we operate in general;

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• sales of substantial amounts of our Class A common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur;

• general economic and political conditions such as recessions, inflation, rising interest rates, actual or perceived instability in the global banking sector, fuel prices, international currency fluctuations and acts of war or terrorism.

• general economic and political conditions such as recessions, volatile inflation and interest rates, actual or perceived instability in the global banking sector, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our Class A common stock irrespective of our operating performance.

The stock market in general, and securities traded on Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the affected companies.

The stock market in general, and securities traded on The Nasdaq Stock Market in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the affected companies.

The trading prices and valuations of these stocks, and of our Class A common stock, may not be predictable.

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Any shares of Class A common stock that we issue under our Incentive Plan, ESPP or other equity incentive plans that we may adopt in the future would dilute the percentage ownership held by holders of Class A common stock.

In connection with the completion of the Business Combination Agreement, dated December 22, 2019, as amended on April 7, 2020, the GNOG Transaction, and equity offerings by the Company, we, our executive officers and directors and selling stockholders entered into agreements restricting their ability to sell their shares of Class A common stock.

In connection with the completion of the Business Combination Agreement, dated December 22, 2019, as amended on April 7, 2020, the acquisition of GNOG pursuant to a definitive agreement and plan of merger, dated August 9, 2021, in an all stock transaction (the “GNOG Transaction”) and equity offerings by the Company, we, our executive officers and directors and selling stockholders entered into agreements restricting their ability to sell their shares of Class A common stock.

As restrictions on resale end or if these stockholders exercise their sale, exchange or registration rights and sell shares or are perceived by the market as intending to sell shares, the market price of our shares of Class A common stock could drop significantly.

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Any such issuance of additional securities in the future may result in additional dilution to you or may adversely impact the price of our Class A common stock.

We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations, prospects and stock price, which could cause you to lose some or all of your investment.

We may be forced to write down or write off assets, restructure our operations, or incur impairment or other charges that could result in losses.

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Analysts who publish information about our securities may have had relatively little experience with our Company given our limited history as a public company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates.

If analysts do cover us and one or more of them downgrade our securities, or if they issue other unfavorable commentary about us or our industry or inaccurate research, our stock price would likely decline.

If analysts that cover our securities cease coverage, downgrade our securities or if they issue other unfavorable commentary about us or our industry or inaccurate

research, our stock price would likely decline.

Furthermore, if one or more of these analysts cease coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets.

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In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public companies with dual or multi-class capital structures to be included in their indices.

Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices;

Beginning in 2017, MSCI Inc.

(“MSCI”), a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices;

however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria.

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The exclusive forum provision provides federal courts located in the State of Nevada as the forum for suits brought to enforce any duty or liability for which Section 27 of the Exchange Act establishes exclusive jurisdiction with the federal courts, or any other claim for which the federal courts have exclusive jurisdiction.

In addition, Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), provides that federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulations thereunder.

In addition, Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), provides that federal and state courts have concurrent jurisdiction over lawsuits brought

under the Securities Act or the rules and regulations thereunder.

To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision.

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Stock repurchases under our stock repurchase program are discretionary, and we cannot guarantee that our stock repurchase program will achieve the desired objectives.

Share repurchases diminish our cash reserves and could also increase the volatility of the trading price of our Class A common stock.

Stock repurchases diminish our cash reserves and could also increase the volatility of the trading price of our Class A common stock.

On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock.

On November 6, 2025, our Board of Directors approved a $1.0 billion increase to our existing stock repurchase authorization, which brings the aggregate stock repurchase authorization to $2.0 billion of our Class A common stock.

We may make repurchases of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws, subject to market conditions and other factors.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors