What changed in this filing

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Item 9A. Controls and Procedures

2026-02-13 compared with 2025-02-14 · 653 added, 599 removed, 1378 unchanged (48% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2024, which is the end of the period covered by this Annual Report.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2025, which is the end of the period covered by this Annual Report.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2025 to ensure that information required to be disclosed by the Company in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

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Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with U.S.

Consistent with published SEC guidance, management excluded from its

assessment of internal control over financial reporting Jackpocket, Inc., which was acquired on May 22, 2024, and Simplebet, Inc., which was acquired on December 3, 2024, as their respective assets and revenue constituted less than five percent of our consolidated total assets and revenue as of and for the year ended December 31, 2024.

Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.

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Certain of our directors and executive officers have made, and may from time to time enter into trading plans or make elections to have shares sold or withheld to cover withholding taxes or pay the exercise price of options, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

On November 14, 2024 , our President, DraftKings North America and a member of our Board of Directors , Matthew Kalish , entered into a prepaid variable forward sale contract with an unaffiliated third-party buyer, which may constitute a non-Rule 10b5-1 trading arrangement (the “Kalish PVF Contract”).

On November 10, 2025 , Erik Bradbury , our Chief Accounting Officer , entered into a trading arrangement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act (the “Bradbury 10b5-1 Plan”).

The Bradbury 10b5-1 Plan provides for (i) the sale of up to 10,561 shares of the Company’s Class A common stock pursuant to a limit order and (ii) additional sales, at market prices, of shares that may be acquired in the future pursuant to the vesting/settlement of certain Company equity awards and shares purchased under the Company’s employee stock purchase plan, in each case in accordance with the plan’s pre-established trading instructions (including instructions to sell specified percentages of “net shares” delivered upon vesting/settlement).

The number of shares to be withheld, and thus the exact number of shares to be sold pursuant to the Bradbury 10b5-1 Plan, can only be determined upon the occurrence of future vesting events.

The Bradbury 10b5-1 Plan will terminate on December 31, 2026 , or earlier upon completion of all sales under the plan (or upon earlier termination in accordance with its terms).

On November 24, 2025 , Matthew Kalish , our President, DraftKings North America and a member of our Board of Directors , terminated a trading arrangement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act (the “Kalish 10b5-1 Plan”), which had been adopted on September 9, 2025.

The Kalish 10b5-1 Plan previously provided for the sale of up to 1,260,000 shares of the Company’s Class A common stock and was scheduled to terminate on March 3, 2026, or earlier if all transactions under the Kalish 10b5-1 Plan were completed.

No shares of the Company’s Class A common stock were sold under the Kalish 10b5-1 Plan.

On November 24, 2025 , Matthew Kalish , our President, DraftKings North America and a member of our Board of Directors , entered into a prepaid variable forward sale contract with an unaffiliated third-party buyer, which may constitute a non-Rule 10b5-1 trading arrangement (the “Kalish PVF Contract”).

The Kalish PVF Contract obligates Mr.

Kalish to deliver to such unaffiliated third-party buyer up to an aggregate of 785,000 shares of the Company’s Class A common stock following the November 17, 2027 maturity date.

On November 20, 2024 , our Chief Financial Officer , Alan Ellingson , entered into a trading arrangement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act (the “Ellingson 10b5-1 Plan”).

The Ellingson 10b5-1 Plan provides for the sale of up to $1,000,000 of the Company’s Class A common stock and terminates on November 14, 2025 , or earlier if all transactions under such trading arrangement are completed.

On November 27, 2024 , Mr.

Kalish entered into a trading arrangement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act (the “Kalish 10b5-1 Plan”).

The Kalish 10b5-1 Plan provides for the sale of up to 1,680,000 shares of the Company’s Class A common stock and terminates on November 11, 2025 , or earlier if all transactions under such trading arrangement are completed.

Kalish to deliver to such unaffiliated third-party buyer 1,391,574 shares of our Class A common stock on the November 17, 2028 maturity date.

On December 12, 2025 , Jocelyn Moore , a member of our Board of Directors , entered into a trading arrangement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act (the “Moore 10b5-1 Plan”).

The Moore 10b5-1 Plan provides for the sale of up to 6,556 shares of the Company’s Class A common stock and terminates on November 28, 2025 , or earlier if all transactions under such trading arrangement are completed.

On December 9, 2024 , our Chief Legal Officer , R.

Stanton Dodge , entered into a prepaid variable forward sale contract with an unaffiliated third-party buyer, which may constitute a non-Rule 10b5-1 trading arrangement (the “Dodge PVF Contract”).

The Dodge PVF Contract obligates Mr.

Dodge to deliver to such unaffiliated third-party buyer up to an aggregate of 500,000 shares of the Company’s Class A common stock following the November 18, 2026 maturity date.

On December 13, 2024 , Mr.

Dodge entered into a trading arrangement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act (the “Dodge 10b5-1 Plan”).

The Dodge 10b5-1 Plan provides for the sale of

up to 1,899,972 shares of the Company’s Class A common stock and terminates on May 15, 2026 , or earlier if all transactions under such trading arrangement are completed.

Letter Agreements

On February 11, 2025, the Company entered into letter agreements with each of Messrs.

Jason Robins, the Company’s Chief Executive Officer;

Matthew Kalish, the Company’s President, DraftKings North America;

and Paul Liberman, the Company’s President, Global Technology and Product, pursuant to which each executive officer agreed to a voluntary reduction in their respective base salaries to $1 for fiscal year 2025 (the “Base Salary Reductions”).

The Base Salary Reductions do not modify any other rights under each of Messrs.

Robins’, Kalish’s and Liberman’s employment agreements that are determined by reference to such executive officer’s base salary (other than to the extent otherwise described in such letter agreements), and such provisions will continue to be applied based on the base salary rate in effect without giving effect to any Base Salary Reductions.

Furthermore, the Base Salary Reductions are not intended to reduce any Company employee benefit provided to Messrs.

Robins, Kalish and Liberman that is determined by reference to base salary, except that life and disability insurance will not be provided to Messrs.

Robins, Kalish and Liberman during the applicable Base Salary Reduction period.

For fiscal 2025, because no bonuses with respect to the 2024 performance period were awarded to Messrs.

Robins, Kalish and Liberman and each agreed to the Base Salary Reductions, the Company granted one-time cash distributions (each, a “One-Time Distribution”) of $52,061, $33,371 and $36,382, respectively, to cover applicable deductions with respect to annual employee contributions towards medical, dental and vision coverages and the Company’s 401(k) plan.

10b5-1 Plan provides for the sale of up to 2,150 shares of the Company’s Class A common stock and terminates on the earlier of (i) the completion of all sales under the Moore 10b5-1 Plan and (ii) June 30, 2026 .

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Business Combinations - Valuation of Customer Relationships

As described in Notes 2 and 3 to the consolidated financial statements, in May 2024, the Company acquired Jackpocket, Inc.

(“Jackpocket”) for total consideration of $773.1 million.

The Company accounted for the acquisition in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, which requires assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date.

The Company valued customer relationships acquired in connection with the Jackpocket acquisition by using the multi-period excess earnings method, which requires the use of significant estimates and assumptions, including revenue growth rates and attrition rates.

The Company recognized $174.0 million of customer relationships within intangible assets, net in connection with the Jackpocket acquisition.

We identified the valuation of customer relationships acquired in connection with the acquisition of Jackpocket as a critical audit matter.

Estimating the fair value of the acquired customer relationships using the multi-period excess earnings method required the use of revenue growth rate and attrition rate assumptions.

The estimate of fair value of the acquired customer relationships is sensitive to changes in these assumptions.

Auditing these elements involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Business Combinations - Valuation of Contingent Consideration

As described in Notes 2 and 3 to the consolidated financial statements, the Company acquired Railbird Technologies, Inc.

(“Railbird”) in October 2025 for total consideration of $84.8 million, including contingent consideration of $37.8 million.

The contingent consideration is included in other long-term liabilities on the consolidated balance sheet.

Contingent consideration liabilities are reported at their estimated fair values based on probability-adjusted present values of the consideration expected to be paid, using significant inputs and estimates.

Key inputs to the valuations include projections of future financial results related to the acquired business, including market-based assumptions.

We identified the estimated fair value of the contingent consideration recognized in connection with the acquisition of Railbird as a critical audit matter.

Estimating the fair value of the contingent consideration involved significant subjective judgment to determine certain market-based assumptions regarding future revenue of the acquired business in the initial year of the projected financial results.

Auditing these assumptions involved especially subjective auditor judgment due to the nature and extent of audit effort required to address this matter.

The primary procedures we performed to address this critical audit matter included:

• Evaluating the reasonableness of the revenue growth rate and attrition rate assumptions used in the estimate of the fair value of the acquired customer relationships by evaluating them on a combined basis for consistency with historical financial information.

• Testing the completeness and accuracy of a sample of the historical financial information used to determine the revenue growth rate and attrition rate on a combined basis by inspecting Jackpocket’s financial records.

• Testing the design and operating effectiveness of the control over the determination of the revenue growth rates and attrition rate assumptions on a combined basis.

Stock-based Compensation - Assessment of the probability of achieving the vesting performance criteria of performance-based stock compensation plan awards

As described in Notes 2 and 11 to the consolidated financial statements, the Company has historically issued performance-based stock compensation plan awards (“PSP Awards”).

PSP awards are performance-based equity awards which establish performance objectives related to a particular fiscal year.

The Company recognizes compensation cost for awards with performance-based vesting conditions on a tranche-by-tranche basis (the accelerated attribution method), based on the probability of achieving the performance criteria.

PSP Awards granted in 2024, 2023 and 2022 vest based on achievement of revenue targets and Adjusted EBITDA targets and have a range of payouts from 0% to 200%.

For the year ended December 31, 2024, stock-based compensation cost attributable to all PSP Awards was $169.8 million.

We identified the assessment of the probability of achieving the performance criteria related to a particular fiscal year for PSP Awards granted in 2023 and 2022 as a critical audit matter.

The revenue and Adjusted EBITDA projections used in the probability assessment related to a particular fiscal year for PSP Awards granted in 2023 and 2022 require significant judgment due to the subjectivity of the projected revenue growth rates and Adjusted EBITDA margins.

Auditing these elements required especially challenging and subjective auditor judgment due to the nature and extent of effort required to address these matters.

The primary procedures we performed to address this critical audit matter included evaluating the reasonableness of the revenue growth rates and Adjusted EBITDA margins by:

• Evaluating the consistency of the projected revenue growth rates and Adjusted EBITDA margins with analysts’ reports for the Company.

• Evaluating the consistency of the projected revenue growth rates with historical market data.

• Comparing the projected revenue growth rates and Adjusted EBITDA margins to historical results.

• Testing the design and operating effectiveness of the control over the review of the projected revenue growth rates and Adjusted EBITDA margins.

• Evaluating the reasonableness of certain market-based assumptions regarding future revenue of the acquired business in the initial year of the projected financial results by (i) assessing those assumptions for consistency with analyst reports and market information used by the Company and (ii) evaluating the market information used by the Company through comparison to other sources of information.

• Testing the design and operating effectiveness of the control over the determination of certain market-based assumptions regarding future revenue of the acquired business in the initial year of the projected financial results.

/s/ BDO USA, P.C.

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We believe that our audit provides a reasonable basis for our opinion.

As indicated in the accompanying “Item 9A, Management’s Report on Internal Control over Financial Reporting”, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Jackpocket, Inc.

(“Jackpocket”) and Simplebet, Inc.

(“Simplebet”), which were acquired on May 22, 2024 and December 3, 2024, respectively, and which are included in the consolidated balance sheet of the Company as of December 31, 2024, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year then ended.

Jackpocket constituted less than 5% of total assets and revenues as of December 31, 2024 and for the year then ended.

Simplebet constituted less than 5% of total assets and revenues as of and for the year ended December 31, 2024.

Management did not assess the effectiveness of internal control over financial reporting of Jackpocket and Simplebet because of the timing of the acquisitions which were completed on May 22, 2024 and December 3, 2024 respectively.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Jackpocket and Simplebet.

Definition and Limitations of Internal Control over Financial Reporting

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Cash reserved for users 469,449 525,407

Receivables reserved for users 62,542 301,770

Accounts receivable 105,577 57,839

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Convertible notes, net of issuance costs 1,259,096 1,256,429

Non-current operating lease liabilities 67,660 80,827

Term B Loan, net of issuance costs 576,544 —

Operating lease liabilities 44,391 67,660

Warrant liabilities — 22,033

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General and administrative 673,603 764,103 606,569

Loss from operations ( 608,999 ) ( 789,225 ) ( 1,511,756 )

Income (loss) from operations ( 15,817 ) ( 608,999 ) ( 789,225 )

Other income (expense):

Interest income 47,259 58,418 21,353

Interest expense ( 2,959 ) ( 2,679 ) ( 2,651 )

(Loss) gain on remeasurement of warrant liabilities ( 4,945 ) ( 57,543 ) 29,396

Other (loss) gain, net ( 23,514 ) ( 224 ) 20,700

Loss before income tax (benefit) provision and loss from equity method investment ( 593,158 ) ( 791,253 ) ( 1,442,958 )

Income tax (benefit) provision ( 86,341 ) 10,170 ( 67,866 )

Loss from equity method investment 468 719 2,895

Net loss attributable to common stockholders $ ( 507,285 ) $ ( 802,142 ) $ ( 1,377,987 )

Loss per share attributable to common stockholders:

Basic and diluted $ ( 1.05 ) $ ( 1.73 ) $ ( 3.16 )

Interest income (expense), net ( 19,941 ) 44,300 55,739

Gain (loss) on remeasurement of warrant liabilities 4,747 ( 4,945 ) ( 57,543 )

Other gain (loss), net 38,024 ( 23,514 ) ( 224 )

Income (loss) before income tax and equity method investments 7,013 ( 593,158 ) ( 791,253 )

Income tax provision (benefit) 4,274 ( 86,341 ) 10,170

(Gain) loss from equity method investments ( 971 ) 468 719

Net income (loss) attributable to common stockholders $ 3,710 $ ( 507,285 ) $ ( 802,142 )

Earnings (loss) per share attributable to common stockholders:

Basic $ 0.01 $ ( 1.05 ) $ ( 1.73 )

Diluted $ ( 0.01 ) $ ( 1.05 ) $ ( 1.73 )

See accompanying notes to consolidated financial statements.

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Purchase of treasury stock for RSU withholding ( 6,623 ) — — — — — — ( 257,759 ) ( 257,759 )

Shares issued under ESPP 556 — — — 15,243 — — — 15,243

Shares issued for contingent consideration 110 — — — 4,962 — — — 4,962

Restricted stock unit vesting 23,339 4 — — — — — — 4

Purchase of treasury stock under Stock Repurchase Program ( 15,969 ) — — — — — — ( 571,528 ) ( 571,528 )

Net loss — — — — — ( 507,285 ) — — ( 507,285 )

Net income (loss) — — — — — 3,710 — — 3,710

Balances at December 31, 2025 495,053 $ 52 393,014 $ 39 $ 8,424,833 $ ( 6,437,518 ) $ 36,488 $ ( 1,392,433 ) $ 631,461

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Stock-based compensation — — — — 396,217 — — — 396,217

Equity consideration issued for acquisitions 8,784 1 — — 376,701 — — — 376,702

Exercise of warrants 1,011 — — — 46,484 — — — 46,484

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Restricted stock unit vesting 8,102 1 — — — — — — 1

Net loss — — — — — ( 802,142 ) — — ( 802,142 )

Purchase of treasury stock under Stock Repurchase Program ( 1,142 ) — — — — — — ( 48,067 ) ( 48,067 )

Net income (loss) — — — — — ( 507,285 ) — — ( 507,285 )

Balances at December 31, 2024 489,071 $ 48 393,014 $ 39 $ 7,978,425 $ ( 6,441,228 ) $ 36,488 $ ( 563,146 ) $ 1,010,626

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Stock-based compensation — — — — 378,321 — — — 378,321

Equity consideration issued for acquisition 29,252 3 — — 460,125 — — — 460,128

Exercise of warrants 153 — — — 4,942 — — — 4,942

Purchase of treasury stock for RSU withholding ( 3,211 ) — — — — — — ( 80,049 ) ( 80,049 )

Restricted stock unit vesting 21,237 1 — — — — — — 1

Net loss — — — — — ( 1,377,987 ) — — ( 1,377,987 )

Net income (loss) — — — — — ( 802,142 ) — — ( 802,142 )

Balances at December 31, 2023 472,697 $ 46 393,014 $ 39 $ 7,149,858 $ ( 5,933,943 ) $ 36,488 $ ( 412,182 ) $ 840,306

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(Amounts in thousands)

Year Ended December 31,

Years Ended December 31,

2025 2024 2023

Cash Flows from Operating Activities:

Net loss attributable to common shareholders $ ( 507,285 ) $ ( 802,142 ) $ ( 1,377,987 )

Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:

Net income (loss) attributable to common stockholders $ 3,710 $ ( 507,285 ) $ ( 802,142 )

Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:

Depreciation and amortization 275,488 270,854 201,920

Non-cash interest (income) expense, net 2,300 ( 15 ) 386

Stock-based compensation 381,367 398,463 578,799

Loss (gain) on remeasurement of warrant liabilities 4,945 57,543 ( 29,396 )

Loss from equity method investment 468 719 2,895

Loss (gain) on marketable equity securities and other financial assets, net 12,940 75 ( 10,999 )

Stock-based compensation expense 339,311 381,367 398,463

(Gain) loss on remeasurement of warrant liabilities ( 4,747 ) 4,945 57,543

(Gain) loss from equity method investment ( 971 ) 468 719

(Gain) loss on marketable equity securities and other financial assets, net 4,406 12,940 75

Loss on sale of Vegas Sports Information Network, LLC — 5,865 —

Deferred income taxes ( 18,225 ) ( 92,733 ) 5,849

Other expenses (income), net 6,280 554 ( 7,268 )

Other non-cash (gain) loss, net ( 35,765 ) 6,280 554

Change in operating assets and liabilities, net of effect of acquisitions:

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Cash paid for internally developed software costs ( 131,154 ) ( 95,698 ) ( 80,378 )

Acquisition of gaming licenses ( 14,983 ) ( 12,105 ) ( 7,213 )

Cash paid for gaming market access and licenses ( 7,956 ) ( 14,983 ) ( 12,105 )

Proceeds from marketable equity securities and other financial assets — — 24,425

Cash paid for acquisitions, net of cash acquired ( 16,381 ) ( 441,487 ) —

Other investing activities, net ( 4,257 ) ( 1,400 ) ( 8,614 )

Net cash flows used in investing activities ( 566,601 ) ( 90,360 ) ( 208,766 )

Cash Flow from Financing Activities:

Collection of loan receivable 11,784 — —

Other investing activities ( 6,938 ) ( 4,257 ) ( 1,400 )

Net cash flows provided by (used in) investing activities ( 165,997 ) ( 566,601 ) ( 90,360 )

Cash Flows from Financing Activities:

Proceeds from Term B Loan, net 588,116 — —

Repayment of Term B Loan principal ( 4,500 ) — —

Proceeds from exercise of warrants — — 288

Purchase of treasury stock for RSU withholding ( 257,759 ) ( 102,897 ) ( 80,049 )

Purchase of treasury stock under Stock Repurchase Program ( 48,067 ) — —

Proceeds from exercise of stock options 10,573 9,165 16,540

Purchase of treasury stock under Stock Repurchase Program ( 571,528 ) ( 48,067 ) —

Proceeds from shares issued under Employee Stock Purchase Plan 15,243 — —

Other financing activities ( 2,601 ) ( 2,667 ) —

Net cash flows used in financing activities ( 144,466 ) ( 63,221 ) ( 16,732 )

Net decrease in cash and cash equivalents, restricted cash, and cash reserved for users ( 293,300 ) ( 155,332 ) ( 851,017 )

Net cash flows provided by (used in) financing activities ( 222,456 ) ( 144,466 ) ( 63,221 )

Net increase (decrease) in cash and cash equivalents, restricted cash, and cash reserved for users 274,402 ( 293,300 ) ( 155,332 )

Cash and cash equivalents, restricted cash, and cash reserved for users at the beginning of period 1,330,193 1,623,493 1,778,825

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Equity consideration issued in connection with acquisitions 28,708 376,702 —

Shares issued for contingent consideration 4,962 — —

Fair value of contingent consideration in connection with acquisitions 37,785 77,965 —

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Increase (decrease) in cash reserved for users ( 55,958 ) 184,117 ( 128,363 )

Cash paid for interest 27,881 — —

Cash paid for income taxes 8,236 5,268 8,341

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We are a digital sports entertainment and gaming company.

We provide users with online and retail sports betting (together, “Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as digital lottery courier, media, and other product offerings.

We provide users with online and retail sports betting (together, “Sportsbook”), online casino (“iGaming”), daily fantasy sports (“DFS”), digital lottery courier, prediction markets and other product offerings.

In May 2018, the Supreme Court (the “Court”) struck down on constitutional grounds the Professional and Amateur Sports Protection Act of 1992, a law that prohibited most states from authorizing and regulating sports betting.

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Of those 41 jurisdictions, 33 have legalized online sports betting.

32 of those 33 jurisdictions are live, and DraftKings operates in 26 of them.

As of December 31, 2024, the U.S jurisdictions with statutes legalizing iGaming are Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.

As of December 31, 2024, we operate our Sportsbook product offering in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington, D.C., West Virginia, Wyoming and Ontario, Canada and we operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, Washington and Wisconsin.

All 33 jurisdictions are live, and DraftKings operates in 27 of them.

As of December 31, 2025, the U.S.

jurisdictions with statutes legalizing iGaming are Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.

As of December 31, 2025, we operate our Sportsbook product offering in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington, D.C., West Virginia, Wyoming and Ontario, Canada and we operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, Washington, Wisconsin and Puerto Rico.

As of December 31, 2025, the Company offers its iGaming product offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

The Company also has arrangements in place with land-based casinos to expand operations into additional states upon the passing of relevant legislation, the issuance of related regulations and the receipt of required licenses.

As further discussed in Note 3 hereof entitled “Acquisition of Golden Nugget Online Gaming, Inc.,” on May 5, 2022 (the “GNOG Closing Date”), DraftKings Inc.

(formerly New Duke Holdco, Inc.) consummated the acquisition of Golden Nugget Online Gaming, Inc., a Delaware corporation (together with its subsidiaries unless the context requires otherwise, “GNOG”), pursuant to a definitive agreement and plan of merger, dated August 9, 2021 (the “GNOG Merger Agreement”), in an all-stock transaction (the “GNOG Transaction”).

In connection with the GNOG Transaction, DraftKings Inc.

undertook a holding company reorganization whereby (i) each share of DraftKings Holdings Inc.

(formerly DraftKings Inc.), a Nevada corporation (“Old DraftKings”), Class A common stock and Class B common stock was converted on a one -for-one basis into a share of DraftKings Inc.

Class A common stock and Class B common stock, respectively, and (ii) DraftKings Inc.

became the going-forward public company and the direct parent company of both Old DraftKings and GNOG.

DraftKings Inc.

is the registrant filing this Annual Report on Form 10-K as the successor registrant for Old DraftKings.

Unless otherwise indicated or the context otherwise requires, the terms “DraftKings”, the “Company”, “we”, “us” and “our” refer to DraftKings Inc.

(or, in respect of periods prior to the GNOG Closing Date, Old DraftKings), together with its consolidated subsidiaries.

Summary of Significant Accounting Policies and Practices

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Actual results could differ from those estimates.

purchase price allocations, including fair value estimates of intangible assets, the estimated useful lives of fixed assets and intangible assets, internally developed software costs and accrued expenses.

Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, the valuation and expensing of equity awards, accounting for contingencies and uncertainties, purchase price allocations, including fair value estimates of intangible assets and contingent consideration, the estimated useful lives of fixed assets and intangible assets, internally developed software costs, including judgments related to capitalization eligibility, capitalization periods and useful lives, accrued expenses and income tax related estimates and judgments, including the realizability of deferred tax assets, valuation allowances and uncertain tax positions.

Concentration Risks and Uncertainties

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, cash reserved for users, and loans receivable.

The Company maintains separate accounts for cash and cash reserved for users primarily across several financial institutions.

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The Company relies on a limited number of vendors to support operations.

In particular, a single vendor is currently the primary provider of web services that allow the Company to host its Sportsbook, iGaming, DFS and digital lottery courier product offerings.

Any interruption in the services provided by this supplier could have a material adverse effect on its business, financial condition and results of operations.

In particular, a single vendor is currently the primary provider of web services that allow the Company to host its Sportsbook, iGaming, DFS, digital lottery courier and prediction markets product offerings.

Any interruption in the services provided by this supplier could have a material adverse effect on its business, financial condition, results of operations and prospects.

The Company’s growth prospects and market potential will depend on its ability to obtain and maintain licenses to operate in a number of jurisdictions, and if the Company fails to obtain and maintain such licenses, its business, financial condition, results of operations and prospects could be impaired.

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.

Business Combinations

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Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid, unrestricted savings, checking, money market funds with original maturities of less than three months and other bank accounts.

We maintain cash in bank accounts at financial institutions that exceed federally insured limits.

We also maintain cash in money market funds which are not insured by the Federal Deposit Insurance Corporation (FDIC).

We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf.

As we have not experienced any material losses in such accounts and we believe that we have placed our cash on deposit with financial institutions which are financially stable, we do not have an expectation of credit losses for these arrangements.

Restricted Cash

Restricted cash refers to cash that is held by the Company but cannot be used for continuing operations.

Restricted cash as of December 31, 2024, primarily relates to collateral for a letter of credit in connection with a cyber-security insurance policy.

Cash Reserved for Users

The Company maintains separate bank accounts to segregate users’ funds from operational funds.

Cash reserved for users represents cash deposited by players in order to engage in our revenue-generating offerings and is maintained in separate bank accounts to segregate users’ funds from operational funds.

In certain regulated jurisdictions, user funds are held by DK Player Reserve LLC, a Delaware limited liability company and wholly owned subsidiary of DraftKings Inc., which was organized for the purpose of protecting users’ funds in the event of creditor claims and complying with certain regulatory requirements of gaming authorities in certain jurisdictions.

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These receivables arise, primarily, due to process timing between when a user deposits and when the Company receives that deposit from the payment processor.

These receivables are presented within prepaid and other current assets.

Accounts Receivable

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The allowance for credit losses is determined based on the Company’s assessment of the probability of non-payment of the receivable after all means of collection have been exhausted and the potential for recovery is considered remote.

Accounts receivable are written off against the allowance for credit losses when collection efforts have been exhausted and recovery is deemed remote.

This provision is netted against the receivable balance with the loss being recognized within general and administrative expenses in the consolidated statements of operations.

As of and for the years ending December 31, 2025 and 2024, the provision did not have a material impact on the Company’s consolidated financial statements.

Digital Assets and Liabilities

In accordance with Staff Accounting Bulletin No.

121 (“SAB 121”), the Company recognized a liability for the obligation to safeguard its users’ assets and recognized an associated asset for non-fungible tokens (“NFTs”) held for its users.

Both the liability and the associated asset are measured at the fair value of the NFTs being safeguarded.

Refer to “ Note 8 – Fair Value Measurements” hereof for disclosures required in accordance with ASC 820, Fair Value Measurement .

On January 23, 2025, the SEC published SAB No.

122 (“SAB 122”) to rescind SAB 121.

Full retrospective application of SAB 122 is required for annual periods beginning after December 15, 2024, but entities are permitted to early adopt SAB 122 in any interim or annual financial statement period included in filings with the SEC on or after January 30, 2025.

The new guidance requires removal of the safeguarding obligation and corresponding asset from the balance sheet unless a loss contingency exists.

The Company does not anticipate this having a material impact upon adoption.

Property and Equipment, Net

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Intangible Assets, Net

The Company’s intangible assets primarily consist of developed technology, customer relationships, internally-developed software, gaming market access and licenses, trademarks and tradenames and digital assets.

The Company’s intangible assets primarily consist of developed technology, customer relationships, internally-developed software, gaming market access and licenses, and trademarks and tradenames.

The related amortization expense is classified as cost of revenue in the consolidated statements of operations.

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Internally Developed Software

Software that is developed for internal use is accounted for pursuant to ASC 350-40, Intangibles, Goodwill and Other—Internal-Use Software .

Software that is developed for internal use is accounted for pursuant to ASC Topic 350-40, Intangibles, Goodwill and Other—Internal-Use Software (“ASC 350-40”).

Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended.

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All other expenditures, including those incurred in order to maintain an intangible asset’s current level of performance, are expensed as incurred.

When intangible assets are retired or disposed of, the cost and accumulated amortization thereon are removed, and any resulting gain or losses are included in the consolidated statements of operations.

Gaming Market Access and Licenses

When intangible assets are retired or disposed of, the cost and accumulated amortization thereon are removed, and any resulting gains or losses are included in the consolidated statements of operations.

Market Access and Licenses

The Company incurs fees in connection with applying for and maintaining good standing in jurisdictions via business licenses.

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Customer Relationships

Customer (or “user”) relationships are finite-lived intangible assets, which are amortized over their estimated economic lives.

Customer (or “user”) relationships are finite-lived intangible assets, which are amortized on a straight-line basis over their estimated economic lives.

Customer relationships are generally recognized as the result of business combinations.

Trademarks and Tradenames

The Company incurs fees in connection with applying for and maintaining trademarks and tradenames as well as trademarks and tradenames resulting from acquisitions.

Trademarks, Tradenames, and Copyrights

The Company incurs fees in connection with applying for and maintaining trademarks, tradenames, and copyrights, as well as trademarks and tradenames resulting from acquisitions.

Fees incurred in connection with the application and subsequent renewals are capitalized and amortized using the straight-line method over an estimated useful life.

Digital Assets

The Company has purchased certain digital assets, including crypto currencies, with cash that is not required to currently support its operations.

The Company accounts for digital assets in accordance with ASC 350, Intangibles—Goodwill and Other.

Accordingly, if the fair market value at any point during the reporting period is lower than the carrying value an impairment loss equal to the difference will be recognized in the consolidated statement of operations.

We have not recorded any significant impairments.

Impairment of Long-Lived Assets

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The Company reviews its reporting unit structure each year, or more frequently based on changes in our organization.

The Company concluded that it has one reporting unit.

In 2024 and 2023, the annual goodwill impairment assessment was performed on the Company’s one reporting unit, while in 2022, the Company performed its annual assessment on the historic three reporting units that were then in effect.

Prior to the fourth quarter of 2025, the Company operated as a single reporting unit for purposes of goodwill allocation and impairment assessment.

Upon the acquisition of Railbird and launch of our prediction markets product offering, the Company has now concluded that it has two reporting units, with prediction markets being a standalone reporting unit.

In 2025, the annual goodwill impairment assessment was performed on the Company’s two reporting units.

In 2024 and 2023, the annual goodwill impairment assessment was performed on the Company’s one consolidated reporting unit.

In the fourth quarter of 2025, 2024 and 2023, as part of its annual evaluations, the Company utilized the option to first assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment assessment.

As part of these assessments, the

Company reviews qualitative factors, which include, but are not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base.

As part of these assessments, the Company reviews qualitative factors, which include, but are not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base.

In accordance with applicable guidance, an entity is not required to calculate the fair value of a reporting unit if, after assessing these qualitative factors, the Company determines that it is more likely than not that the fair value of each of its reporting units is greater than its respective carrying amount.

As of October 1, 2024, 2023 and 2022, the Company determined that it was more likely than not that the fair value of each of its reporting unit exceeded its respective carrying amount and, therefore, a quantitative assessment was not required.

As of October 1, 2025, 2024 and 2023, the Company determined that it was more likely than not that the fair value of each of its reporting units exceeded its respective carrying amount and, therefore, a quantitative assessment was not required.

As a result, no goodwill impairment resulted from the assessments as of October 1, 2025, 2024 and 2023.

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Key inputs to the valuations are the projections of future financial results in relation to the business, revenue volatility, equity volatility, and operational leverage ratio as well as management judgment regarding the probability of achieving a future performance target.

Key inputs to the valuations are the projections of future financial results in relation to the business, including market based assumptions, revenue volatility, equity volatility and operational leverage ratio as well as management judgment regarding the probability of achieving a future performance target.

The fair value of contingent consideration liabilities is remeasured each reporting period, with changes in the fair value included in current operations.

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Equity Method Investments

The Company has equity method investments in DKFS, LLC, DBDK Venture Fund I, L.P.

and DBDK Venture Fund II, L.P.

The Company uses the equity method to account for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but it does not exercise control and is not the primary beneficiary.

The Company’s judgment regarding its level of influence over the equity method investee includes considering key factors, such as ownership interest, representation on the board of directors, and participation in policy-making decisions.

The Company’s carrying value in the equity method investee is reflected in the caption “Equity method investments” on the consolidated balance sheets.

Changes in value of DKFS, LLC, DBDK Venture Fund I, L.P.

and DBDK Venture Fund II, L.P.

are recorded in “Loss (income) from equity method investment” on the consolidated statements of operations.

The Company has equity method investments, including in DKFS, LLC, DBDK Venture Fund I, L.P., DBDK Venture Fund II, L.P.

The Company uses the equity method to account for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but the Company does not exercise control and is not the primary beneficiary.

The Company’s carrying value in the equity method investee is reflected in Equity method investments on the consolidated balance sheets.

Changes in value of DKFS, LLC, DBDK Venture Fund I, L.P., and DBDK Venture Fund II, L.P.

are recorded in (Gain) loss from equity method investments on the consolidated statements of operations.

Refer to “Note 15 — Related-Party Transactions” in the consolidated financial statements.

Under the equity method, the Company’s investment is initially measured at cost and subsequently increased or decreased to recognize the Company’s share of income and losses of the investee, capital contributions and distributions and impairment losses.

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There was no such impairment recorded during 2025, 2024 or 2023.

The Company determines if an arrangement is a lease at inception and categorizes it as either operating or finance based on the criteria of ASC 842, Leases .

The Company determines if an arrangement is a lease at inception and categorizes it as either operating or finance based on the criteria of ASC Topic 842, Leases .

An arrangement contains a lease when the arrangement conveys the right to control the use of an identified asset over the lease term.

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Revenue Recognition

The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

ASC 606 requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

The Company, in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), recognizes revenue when a performance obligation is satisfied by transferring the control of promised goods or services to a customer, in an amount that reflects the consideration that the Company expects to be entitled for those goods or services using a five-step process.

See “Note 9 – Revenue Recognition” for further information.

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The Company also provides online sportsbook and casino operators with technical infrastructure as well as related services with respect to its direct customers and distributors.

The Company has also entered prediction markets in which the Company acts as an introducing broker, and therefore revenue is generated from introducing fees paid by futures commission merchants.

The following is a description of the Company’s revenue streams:

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Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users.

iGaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines.

iGaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette, baccarat and slot machines.

For these product offerings, the Company functions similarly to land-based casinos, generating revenue through hold, as users play against the house.

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Sportsbook, iGaming, and DFS create a single performance obligation for the Company to operate contests or games and award prizes or payouts to users based on results.

Revenue is recognized at the conclusion of each wager, wagering game hand, and contest.

Revenue is recognized at the conclusion of each wager, wagering game hand or contest.

Incentives can be used across online gaming product offerings.

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User incentives in certain cases create liabilities when awarded to players and in those cases are generally recognized as revenue upon redemption.

Prediction Markets

Prediction markets allows customers to trade event-based contracts listed on regulated exchanges.

During the reporting period, the Company acted solely as an introducing broker, earning fees for onboarding traders and routing orders to a futures commission merchant for execution.

Revenue is generated from introducing fees, paid by futures commission merchants, and is recognized when customer trades occur.

The Company does not execute trades, hold customer funds, or assume risk related to event-based contract outcomes.

Digital Lottery Courier

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Revenue is not recognized from the face value of lottery tickets or customer prize winnings, as the service acts solely as a courier and assumes no risk from game outcomes.

Media and advertising revenue

The Company enters contracts with businesses where it receives consideration in exchange for advertisement activities over the related campaign periods.

These services are grouped into advertising promises and sponsored game promises.

The advertising packages range from standard ad placements and background ad placements to more high-touch integrations, such as sponsored DFS contest series or custom site takeovers.

Media and advertising revenue is generated from business users and recognized ratably over the respective ad periods.

Non-fungible token (“NFT”) content

The Company launched DraftKings Marketplace (“Marketplace”) during the third quarter of 2021.

Marketplace is a digital collectibles (non-fungible token or “NFT”) ecosystem designed for mainstream accessibility that offers curated initial NFT drops (“Primary Sales”).

In addition to Primary Sales, owners of NFTs on Marketplace can list their NFTs for sale to other Marketplace customers (“Secondary Sales”).

The revenue that the Company earns from Marketplace is primarily based on a specific percentage of the gross value of each Primary Sale or Secondary Sale.

The revenue is recognized for each sale when the NFT transfers to the end user.

The Company discontinued operations of Marketplace during the third quarter of 2024.

Transaction Price Considerations

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In addition, in the event of a multi-stage contest, the Company will allocate transaction price ratably from contest start to the contest’s final stage.

For prediction markets, the Company identifies a single performance obligation to introduce traders to futures commission merchants for the execution of trades, and accordingly the transaction price is not further allocated.

Certain costs to obtain or fulfill contracts

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In addition to these incentive programs, the Company’s deferred revenue balance also consists of wagered amounts that relate to unsettled or pending outcomes.

Beginning in 2025, revenue also includes interest income on customer deposits.

Although such income does not directly arise from contracts with customers, it is presented within revenue as these funds are critical components of providing our product offerings to customers, and therefore the cash inflows from interest are directly associated with the Company’s ongoing revenue-generating activities.

Cost of Revenue

Cost of revenue consists primarily of variable costs.

These include mainly (i) product taxes, (ii) payment processing fees and chargebacks, (iii) platform costs directly associated with revenue-generating activities, including those costs that were originally capitalized for internally developed software, (iv) revenue share / market access arrangements, and (v) feed / provider services.

These include mainly (i) product taxes;

(ii) payment processing fees and chargebacks;

(iii) platform costs directly associated with revenue-generating activities, including those costs that were originally capitalized for internally developed software;

(iv) revenue share / market access arrangements and (v) feed / provider services.

The Company incurs payment processing fees on user deposits, withdrawals and deposit reversals from payment processors.

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Stock-based Compensation

The Company measures compensation cost for stock options and other stock awards in accordance with ASC 718, Compensation—Stock Compensation .

The Company measures compensation cost for stock options and other stock awards in accordance with ASC Topic 718, Compensation—Stock Compensation .

Stock-based compensation is measured at fair value on grant date and recognized as compensation cost over the requisite service period.

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For awards with performance-based vesting conditions, the Company recognizes compensation cost on a tranche-by-tranche basis (the accelerated attribution method), based on the probability of achieving the performance criteria.

Under the provisions of ASC 505-50, Equity-Based Payments to Non-Employees , the Company measures stock-based awards granted to non-employees at the earlier of:

Under the provisions of ASC Topic 505-50, Equity-Based Payments to Non-Employees , the Company measures stock-based awards granted to non-employees at the earlier of:

(i) the performance commitment date or (ii) the date the services required under the arrangement have been completed.

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The income tax (benefit) provision includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

Loss per share

Earnings (Loss) per share

Basic loss per share is calculated using the two-class method.

Under the two-class method, basic loss is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period excluding the effects of any potentially dilutive instruments.

Under the two-class method, basic loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period excluding the effects of any potentially dilutive instruments.

The weighted-average number of common shares outstanding during the period includes Class A common stock but is exclusive of Class B common stock as these shares have no economic or participating rights.

Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potential common shares had been issued if such additional common shares were dilutive.

Since the Company had net losses for all the periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded, as their effect would be anti-dilutive.

For certain contracts that may be settled in shares and are accounted for as assets or liabilities, the numerator is also adjusted for changes in income or loss that would have resulted if such contracts had been classified as equity, when dilutive.

For periods presented with net losses, basic and diluted loss per share are the same, and additional potential common shares have been excluded, as their effect would be anti-dilutive.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The main provisions of ASU 2023-07 requires (i) enhanced disclosures about significant segment expenses, (ii) extension of certain annual disclosures to interim periods and (iii) certain qualitative information on the chief operating decision maker.

We adopted the annual reporting requirement under ASU 2023-07 on January 1, 2024 and will implement the interim disclosure requirements in fiscal year 2025.

The adoption did not have a material impact on our consolidated financial statements.

See “Note 13 – Segment Information” for additional information.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-08, Accounting for and Disclosure of Crypto Assets (Topic 820) .

ASU 2023-08 addresses the accounting and disclosure requirements for certain crypto assets.

The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period.

The guidance also requires to provide additional disclosures about the holdings of certain crypto assets.

ASU 2023-08 is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of this standard on our digital assets’ accounting and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 modifies the rules on income tax disclosures to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid.

The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities.

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted.

All entities are required to apply the guidance prospectively but have the option to apply it retrospectively.

We are currently evaluating the impact of this standard on our income tax disclosure.

The Company adopted ASU 2023-09 prospectively for the year ending December 31, 2025.

Refer to “Note 12 — Income Taxes” in the consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires disaggregated disclosure of income statement expenses.

Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregated disclosure of income statement expenses.

ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement;

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We are currently evaluating the impact of this standard on our disclosure of income statement expenses.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

ASU 2025-06 changes the accounting for internal-use software under ASC 350-40.

ASU 2025-06 clarifies when to begin capitalizing costs.

ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact of this standard on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements (“ASU 2025-11”).

ASU 2025-11 clarifies the applicability of interim reporting guidance and reorganizes and clarifies interim disclosure requirements under ASC Topic 270, including the addition of a disclosure principle requiring disclosure of material events occurring since the most recent annual reporting period.

ASU 2025-11 is effective for interim reporting periods within annual periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact of this standard on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”).

ASU 2025-12 makes targeted amendments to various topics within the Accounting Standards Codification intended to clarify existing guidance and correct minor inconsistencies.

ASU 2025-12 is effective for interim and annual reporting periods beginning after December 15, 2026, with early adoption permitted.

Certain amendments require retrospective application.

We are currently evaluating the impact of this standard on our consolidated financial statements.

Business Combinations

2025 Business Combinations

Acquisition of Railbird Technologies Inc.

On October 21, 2025 (“Railbird Acquisition Date”), the Company entered into a definitive agreement (the “Railbird Merger Agreement”) to acquire Railbird and its wholly owned subsidiary Railbird Exchange, LLC, a federally licensed exchange designated by the Commodity Futures Trading Commission (the “Railbird Transaction”).

The acquisition provides a foundation that will allow the Company to enter prediction markets through regulated event contracts.

Under the terms of the Railbird Merger Agreement and subject to certain exclusions contained therein, Railbird equityholders received closing consideration of approximately $ 18.3 million of cash consideration and approximately $ 28.7 million of equity consideration on the Railbird Acquisition Date, excluding contingent consideration.

The present value of the contingent consideration of $ 37.8 million at the Railbird Acquisition Date, which is payable upon, and subject to, the achievement of certain performance targets, is included in Other long-term liabilities on the consolidated balance sheet.

Operating results for Railbird on and after the Railbird Acquisition Date are included in the Company’s consolidated statements of operations for the year ended December 31, 2025.

The amount of revenue and earnings attributable to the Railbird business from the Railbird Closing Date through December 31, 2025, which is included within revenue and loss attributable to common stockholders in the Company’s consolidated statements of operations, is not material.

Pro forma financial information for the acquisition has not been presented because the impact of this acquisition was immaterial to our consolidated financial statements.

Preliminary Purchase Price Accounting for the Railbird Transaction

On the Railbird Acquisition Date, the Company acquired 100 % of the equity interests of Railbird pursuant to the Railbird Merger Agreement.

The following is a summary of the consideration issued or paid on the Railbird Acquisition Date:

Cash consideration $ 18,296

Equity consideration (1)

Contingent consideration (2)

Total consideration $ 84,789

(1) Includes the issuance of approximately 0.9 million shares of DraftKings Inc.’s Class A common stock issued at $ 33.62 per share.

(2) The Company recorded a fair value estimate of the contingent consideration, as disclosed in “Note 8 – Fair Value Measurement”.

Contingent payments have a maximum value of up to $ 200 million, 47.5 % of which will be contingent consideration and 52.5 % of which will be recorded as compensation under ASC 805.

The payments will be settled, at the Company’s option, in shares of the Company’s Class A common stock or in a combination of shares of the Company’s Class A common stock and cash;

provided that, for each Railbird equityholder that is an accredited investor, shares of the Company’s Class A common stock will represent at least 70 % of the contingent consideration such equityholder receives.

The Company’s Class A common stock to be issued as contingent payment will be valued on the basis of a 30 -day volume-weighted average price of the Company’s Class A common stock determined at or around the issuance thereof based on certain post-closing performance metrics.

The purchase price allocation for Railbird set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Railbird Acquisition Date.

Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined and may include adjustments pertaining to intangible assets acquired and tax liabilities assumed, including the calculation of deferred tax assets and liabilities.

Any such adjustments may be material.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the consummation of the Railbird Transaction on the Railbird Acquisition Date.

The values set forth below are preliminary, pending finalization of valuation analyses:

Cash and cash equivalents $ 181

Restricted Cash 1,734

Intangible assets 58,090

Deposits and other non-current assets 6

Total identifiable assets acquired 60,011

Liabilities assumed:

Accounts payable and accrued expenses 52

Other long-term liabilities 15,365

Total liabilities assumed 15,417

Net assets acquired (a) 44,594

Purchase consideration (b) $ 84,789

Goodwill (b) – (a) $ 40,195

Goodwill represents the excess of the gross consideration transferred over the difference between the fair value of the underlying net assets acquired and the underlying liabilities assumed.

Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill.

Intangible assets not recognized apart from goodwill consist primarily of benefits from securing buyer-specific synergies that increase revenue and profits and are not otherwise available to a market participant, as well as acquiring a talented workforce and cost savings opportunities.

Goodwill recognized is not deductible for tax purposes.

Goodwill associated with the Railbird Transaction is assigned as of the Railbird Acquisition Date to the Company’s prediction markets reporting unit which is new in 2025 as a result of the launch of our new prediction markets product offering.

The Company recorded an intangible asset for an operating license of $ 58.1 million that will be amortized over four years .

We valued the operating license by using the income approach, specifically the with-and-without method, which isolates the cash flows attributable to the asset.

The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including revenue growth rates and discount rates.

We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

Transaction Costs

For the year ended December 31, 2025, the Company incurred $ 5.5 million in advisory, legal, accounting and management fees in connection with the Railbird Transaction, which are included in general and administrative expenses on the Company’s consolidated statements of operations.

2024 Business Combinations

Acquisition of Jackpocket Inc.

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The acquisition of Jackpocket allows DraftKings to participate in the U.S.

digital lottery courier product offering with expected ancillary benefits to its Sportsbook and iGaming product offerings by enhancing customer lifetime value and customer acquisition capabilities.

Operating results for Jackpocket on and after the Jackpocket Closing Date are included in the Company’s consolidated statements of operations for the year ended December 31, 2024.

Because the Company is integrating Jackpocket ’ s operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Jackpocket business from the Jackpocket Closing Date through December 31, 2024, which is included within revenue and loss attributable to common stockholders in the Company’s consolidated statements of operations, is impracticable to determine.

Preliminary Purchase Price Accounting for the Jackpocket Transaction

digital lottery courier product offering with expected ancillary benefits to its Sportsbook and iGaming product offerings by enhancing user lifetime value and customer acquisition capabilities.

Operating results for Jackpocket on and after the Jackpocket Closing Date are included in the Company’s consolidated statements of operations for the years ended December 31, 2025 and 2024.

Because the Company was integrating Jackpocket’s operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Jackpocket business from the Jackpocket Closing Date through December 31, 2024, which is included within revenue and loss attributable to common stockholders in the Company’s consolidated statements of operations, is impracticable to determine.

Pro forma financial information for the acquisition has not been presented because the impact of this acquisition was immaterial to our consolidated financial statements.

Purchase Price Accounting for the Jackpocket Transaction

On the Jackpocket Closing Date, the Company acquired 100 % of the equity interests of Jackpocket pursuant to the Jackpocket Merger Agreement.

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’ s Class A common stock, which were issued to certain Jackpocket employee option holders in exchange for their Jackpocket options.

The purchase price allocation for Jackpocket set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Jackpocket Closing Date.

Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined and may include adjustments pertaining to tax liabilities assumed, including the calculation of deferred tax assets and liabilities, which remain preliminary as of December 31, 2024.

Any such adjustments may be material.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the consummation of the Jackpocket Transaction on the Jackpocket Closing Date.

The values set forth below are preliminary, pending finalization of valuation analyses:

The following table summarizes the fair value of the assets acquired and liabilities assumed in connection with the consummation of the Jackpocket Transaction on the Jackpocket Closing Date:

Cash and cash equivalents $ 45,999

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Goodwill recognized is not deductible for tax purposes.

Goodwill associated with the Jackpocket Transaction is assigned as of the Jackpocket Closing Date to the Company’s consolidated reporting unit.

Goodwill associated with the Jackpocket Transaction was assigned as of the Jackpocket Closing Date to the Company’s consolidated reporting unit at the time of acquisition.

As Jackpocket ’ s financial results prior to the acquisition are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

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Transaction Costs

For each of the years ended December 31, 2024 and 2023, the Company incurred $ 11.3 million and $ 1.5 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, respectively, which are included in general and administrative expenses on the Company’s consolidated statements of operations.

For the year ended December 31, 2024, the Company incurred $ 11.3 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, which are included in general and administrative expenses on the Company’s consolidated statements of operations.

There were no such costs for the year ended December 31, 2025

Acquisition of Simplebet, Inc.

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On December 3, 2024 (the “Simplebet Closing Date”), DraftKings consummated the Simplebet Transaction, and, under the terms of the Simplebet Merger Agreement and subject to certain exclusions contained therein, Simplebet stockholders received approximately $ 36.0 million of cash consideration and approximately $ 45.1 million of equity consideration.

The present value of the contingent consideration of $ 53.5 million at the acquisition date, which is payable upon, and subject to, the achievement of certain performance targets, is included in other long term liabilities on the consolidated balance sheet.

Operating results for Simplebet on and after the Simplebet Closing Date are included in the Company’s consolidated statements of operations for the year ended December 31, 2024.

The present value of the contingent consideration of $ 53.5 million at the acquisition date, which is payable upon, and subject to, the achievement of certain performance targets, is included in Other long-term liabilities at fair value on the consolidated balance sheet.

Operating results for Simplebet on and after the Simplebet Closing Date are included in the Company’s consolidated statements of operations for the years ended December 31, 2025 and 2024.

Because the Company is integrating Simplebet’s operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Simplebet business from the Simplebet Closing Date through December 31, 2024, which is included within revenue and loss attributable to common stockholders in the Company’s consolidated statements of operations, is impracticable to determine.

Preliminary Purchase Price Accounting for the Simplebet Transaction

Pro forma financial information for the acquisition has not been presented because the impact of this acquisition was immaterial to our consolidated financial statements.

Purchase Price Accounting for the Simplebet Transaction

On the Simplebet Closing Date, the Company acquired 100 % of the equity interests of Simplebet pursuant to the Simplebet Merger Agreement.

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(1) Includes the issuance of approximately 1.0 million shares of DraftKings Inc.’s Class A common stock issued at $ 43.97 per share.

(2) Contingent consideration of up to 3.5 million shares of DraftKings Inc.’s Class A common stock may be payable over the next two years , subject to the achievement of certain future performance targets for the Company as a whole.

(2) Contingent consideration of up to 3.5 million shares of DraftKings Inc.’s Class A common stock may be payable through December 31, 2026, subject to the achievement of certain future performance targets for the Company as a whole.

The Company recorded a fair value estimate of the contingent consideration, as disclosed in “Note 8 – Fair Value Measurement”.

The purchase price allocation for Simplebet set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Simplebet Closing Date.

Any such adjustments may be material.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the consummation of the Simplebet Transaction on the Simplebet Closing Date.

The values set forth below are preliminary, pending finalization of valuation analyses:

The following table summarizes the fair value of the assets acquired and liabilities assumed in connection with the consummation of the Simplebet Transaction on the Simplebet Closing Date:

Cash and cash equivalents $ 5,002

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Net assets acquired (a) 49,159

Estimated purchase consideration (b) 134,645

Estimated goodwill (b) - (a) $ 83,152

Purchase consideration (b) 134,645

Goodwill (b) - (a) $ 85,486

Goodwill represents the excess of the gross consideration transferred over the difference between the fair value of the underlying net assets acquired and the underlying liabilities assumed.

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Goodwill recognized is not deductible for tax purposes.

Goodwill associated with the Simplebet Transaction is assigned as of the Simplebet Closing Date to the Company’s consolidated reporting unit.

Goodwill associated with the Simplebet Transaction was assigned as of the Simplebet Closing Date to the Company’s consolidated reporting unit at the time of acquisition.

As Simplebet’s financial results are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

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For the year ended December 31, 2024, the Company incurred $ 4.5 million in advisory, legal, accounting and management fees in connection with the Simplebet Transaction, which are included in general and administrative expenses on the Company’s consolidated statements of operations.

There were no such costs for the year ended December 31, 2025.

Other 2024 Acquisitions

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SIQ and Dijon were acquired for aggregate cash payments of $ 28.2 million and aggregate equity consideration of $ 10.8 million on the respective closing dates of such acquisitions.

In addition, the Company is subject to contingent consideration payments of up to $ 33.3 million for both of their acquisitions, subject to the achievement of certain performance targets, with a preliminary fair value estimate of $ 24.4 million included in other current liabilities and other long term liabilities on the consolidated balance sheet.

In addition, the Company is subject to contingent consideration payments of up to $ 33.3 million for both of their acquisitions, subject to the achievement of certain performance targets, with a fair value estimate of $ 24.4 million included in Other current liabilities and Other long-term liabilities on the consolidated balance sheet.

The Company recorded goodwill of $ 35.2 million, of which none will be deductible for tax purposes.

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For the year ended December 31, 2024, the Company incurred $ 1.7 million in advisory, legal, accounting and management fees in connection with these acquisitions, which are included in general and administrative expenses on the Company’s consolidated statements of operations.

There were no such costs for the year ended December 31, 2025.

As financial results of SIQ and Dijon are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

2022 Business Combinations

Acquisition of Golden Nugget Online Gaming, Inc.

On May 5, 2022, DraftKings consummated the GNOG Transaction, and, under the terms of the GNOG Merger Agreement and subject to certain exclusions contained therein, GNOG stockholders received a fixed ratio of 0.365 shares of DraftKings Inc.’s Class A common stock for each share of GNOG that they held on the GNOG Closing Date.

DraftKings Inc.

issued approximately 29.3 million shares of its Class A common stock in connection with the consummation of the GNOG Transaction.

Operating results for GNOG on and after the GNOG Closing Date are included in the Company’s consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022.

Because the Company was integrating GNOG’s operations into its consolidated operating activities, the amount of revenue and earnings attributable to the GNOG business for 2022, which is included within revenue and net loss attributable to common stockholders in the Company’s consolidated statements of operations , was impracticable to determine.

Purchase Price Accounting for the GNOG Transaction

On the GNOG Closing Date, the Company acquired 100 % of the equity interests of GNOG pursuant to the GNOG Merger Agreement.

The following is a summary of the consideration issued on the GNOG Closing Date:

Share consideration (1)

Other consideration (2)

Total consideration $ 603,465

(1) Includes the issuance of approximately 29.3 million shares of DraftKings Inc.’s Class A common stock issued at a price of $ 15.73 .

(2) Includes (i) $ 170.9 million of payments made by the Company on behalf of GNOG, including repayment of the outstanding portion of GNOG’s term loan (including the associated prepayment premium) and payment of certain of GNOG’s transaction expenses incurred in connection with the GNOG Transaction and (ii) warrants that were exercisable for shares of GNOG Class A common stock prior to the GNOG Closing Date, which were assumed by DraftKings in connection with the GNOG Transaction and became eligible to be converted into approximately 2.1 million shares of DraftKings Inc.’s Class A common stock in the aggregate.

These payments were partially offset by commercial credits received by the Company from Fertitta Entertainment, Inc.

(“FEI”), which can be applied by the Company from time to time to offset future amounts otherwise owed by it to FEI or its affiliates under commercial arrangements among such parties, subject to certain limited exceptions.

The following table summarizes the consideration issued or paid in connection with the GNOG Transaction and the fair value of the assets acquired and liabilities assumed in connection with the consummation of the GNOG Transaction on the GNOG Closing Date:

Cash and cash equivalents $ 66,709

Cash reserved for users 7,633

Receivables reserved for users 2,814

Accounts receivables 7,783

Prepaid expenses and other current assets 64

Property and equipment, net 1,433

Intangible assets, net 315,000

Operating lease right-of-use assets 1,185

Deposits and other non-current assets 47,395

Total identifiable assets acquired 450,016

Liabilities assumed:

Accounts payable and accrued expenses 32,989

Liabilities to users 4,314

Operating lease liabilities 1,185

Other long-term liabilities 78,781

Total liabilities assumed 117,269

Net assets acquired (a) 332,747

Purchase consideration (b) 603,465

Goodwill (b) – (a) $ 270,718

Goodwill represents the excess of the gross consideration transferred over the difference between the fair value of the underlying net assets acquired and the underlying liabilities assumed.

Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill.

Goodwill recognized is partially deductible for tax purposes, and the amount of deductible goodwill was determined to be $ 160.7 million.

Intangible Assets

Fair Value Weighted-

Gaming licenses $ 145,000 12.2 years

Customer relationships 170,000 5.9 years

Total $ 315,000

Loan Receivable

The Company acquired a long-term receivable in the amount of $ 30.1 million in connection with the GNOG Transaction, which originally resulted from a $ 30.0 million mezzanine loan (the “Danville GN Casino Loan”) by GNOG to certain parties before the GNOG Closing Date to develop and construct a “Golden Nugget”-branded casino in Danville, Illinois, pending regulatory approvals, that would enable GNOG to obtain market access to the State of Illinois.

There has been no significant deterioration of credit quality since the origination date of the Danville GN Casino Loan.

The receivable related to the Danville GN Casino Loan is classified within deposits and other non-current assets on the Company’s consolidated balance sheet.

Transaction Costs

For the year ended December 31, 2022, the Company incurred $ 14.9 million in advisory, legal, accounting and management fees in connection with the GNOG Transaction, which are included in general and administrative expenses on the Company’s consolidated statements of operations.

Unaudited Pro-Forma Information

The financial information in the table below summarizes the combined results of operations of Old DraftKings and GNOG, on an actual and a pro forma basis, as applicable, as though the companies had been combined as of January 1, 2022.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the GNOG Transaction had been consummated as of the beginning of the periods presented or of results that may occur in the future.

Year Ended December 31, 2022

Revenue $ 2,284,596

Net loss $ ( 1,375,161 )

The foregoing pro forma financial information is based on estimates and assumptions, which the Company believes are reasonable.

The pro forma financial information includes adjustments primarily related to purchase accounting adjustments.

Property and Equipment

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During the years ended December 31, 2025, 2024 and 2023 the Company recorded depreciation expense on property and equipment of $ 19.2 million , $ 21.1 million and $ 20.4 million, respectively.

The value of property and equipment, net in foreign countries is $ 2.9 million and $ 4.0 million as of December 31, 2024 and 2023, respectively.

No other country or region represents greater than 10% of our total property and equipment, net as of the dates presented, other than the United States.

No country or region, other than the United States, represents greater than 10% of our total property and equipment, net as of the dates presented.

Intangible Assets and Goodwill

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Trademarks, tradenames and other 5.1 years 43,120 ( 19,122 ) 23,998

1,633,928 ( 702,594 ) 931,334

Indefinite-lived intangible assets:

Digital assets, net of impairment Indefinite-lived 1,787 N/A 1,787

Intangible assets, net $ 1,736,867 $ ( 847,666 ) $ 889,201

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The changes in the carrying value of goodwill were as follows:

Balance as of December 31, 2022 $ 886,373

Balance at December 31, 2023 $ 886,373

Goodwill resulting from acquisitions 668,743

Balance as of December 31, 2023 $ 886,373

Balance at December 31, 2024 $ 1,555,116

Goodwill resulting from acquisitions 40,197

Balance as of December 31, 2024 $ 1,555,116

Goodwill change from measurement period adjustment 2,334

Balance at December 31, 2025 $ 1,597,647

Accounts Payable and Accrued Expenses

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Accounts payable $ 67,860 $ 53,662

Accrued compensation and related expenses 87,192 94,830

Accrued compensation and related benefits 101,849 87,192

Accrued gaming taxes 171,196 130,401

Accrued marketing 139,454 94,136

Accrued partnership fees 113,299 136,338

Accrued processor fees 28,985 21,357

Accrued product taxes 130,401 116,501

Accrued professional fees and litigation 68,835 53,870

Accrued software and license fees 21,747 25,829

Accrued revenue share 155,212 113,299

Deferred revenue 56,433 46,390

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Current and Long-term Liabilities

Revolving Line of Credit

On December 20, 2022, the Company entered into a loan and security agreement with Pacific Western Bank and Citizens Bank, as lenders (as amended, the “Old Credit Agreement”), which provides the Company with a revolving line of credit of up to $ 125.0 million (the “Old Revolving Line of Credit”).

The Old Credit Agreement maturity date was extended from December 20, 2024 to December 31, 2025, effective July 31, 2024.

On November 7, 2024, the Company entered into a credit agreement (the “New Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $ 500.0 million (the “New Revolving Credit Facility”).

The New Revolving Credit Facility has a maturity date of November 7, 2029.

In conjunction with the New Credit Agreement and New Revolving Credit Facility, the Old Credit Agreement and Old Revolving Line of Credit were terminated.

Revolving loans under the New Revolving Credit Facility bear interest at the Company’s election at either (i) Term SOFR (as defined in the New Credit Agreement), plus an applicable margin ranging from 1.75 % to 2.25 % depending on the Company’s Net First Lien Leverage Ratio (as defined in the New Credit Agreement) or (ii) a base rate that is equal to the greatest of (a) the federal funds rate plus 0.50 %, (b) the prime rate and (c) Term SOFR for a one month interest period plus 1.00 %, in each case plus an additional applicable margin ranging from 0.75 % to 1.25 % depending on the Company’s Net First Lien Leverage Ratio.

In addition, the Company is required to pay a commitment fee quarterly in arrear ranging from 0.25 % to 0.375 % per annum of the unused portion of the New Revolving Credit Facility depending on the Company’s Net First Lien Leverage Ratio.

As of December 31, 2024, the New Credit Agreement provided a revolving line of credit of up to $ 500.0 million, and there was no principal outstanding under the New Credit Agreement.

As of December 31, 2024, $ 10.0 million in letters of credit were issued under the New Credit Agreement, with $ 490.0 million available for borrowing.

The performance of the Company’s obligations under the New Credit Agreement is secured by a first-priority security interest on substantially all of its assets.

The New Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including dividend restrictions and a financial covenant that the Company is required to maintain a Net First Lien Leverage Ratio not to exceed 4.50 :1.00, which is tested only if the aggregate amount of (i) revolving loans outstanding and (ii) letters of credit outstanding under the New Revolving Credit Facility in excess of a specified threshold (unless cash collateralized) is in excess of 40 % of the total amount under the New Revolving Credit Facility.

Credit Agreement

On November 7, 2024, the Company entered into a credit agreement (as amended, the “Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $ 500.0 million (the “Revolving Credit Facility”).

The Revolving Credit Facility has a maturity date of November 7, 2029.

Revolving loans under the Revolving Credit Facility bear interest at the Company’s election at either (i) Term SOFR (as defined in the Credit Agreement), plus an applicable margin ranging from 1.75 % to 2.25 % depending on the Company’s Net First Lien Leverage Ratio (as defined in the Credit Agreement) or (ii) a base rate that is equal to the greatest of (a) the federal funds rate plus 0.50 %, (b) the prime rate and (c) Term SOFR for a one month interest period plus 1.00 %, in each case plus an additional applicable margin ranging from 0.75 % to 1.25 % depending on the Company’s Net First Lien Leverage Ratio.

In addition, the Company is required to pay a commitment fee quarterly in arrear ranging from 0.25 % to 0.375 % per annum of the unused portion of the Revolving Credit Facility depending on the Company’s Net First Lien Leverage Ratio.

As of December 31, 2025 and 2024, the Credit Agreement provided a Revolving Credit Facility of up to $ 500.0 million, and there was no principal outstanding thereunder.

As of December 31, 2025 and 2024, $ 10.0 million in letters of credit were issued under the Revolving Credit Facility, with $ 490.0 million available for borrowing.

On March 4, 2025, the Company entered into a first amendment to the Credit Agreement, providing for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $ 600.0 million (the “Term B Facility” and, such term loans, the “Term B Loan”).

The Term B Facility matures on March 4, 2032, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on such date (unless extended in accordance with the terms of the Credit Agreement).

In addition, 1.00 % of the aggregate principal amount of the Term B Loan borrowed on March 4, 2025 is payable per annum in quarterly installments.

In connection with the borrowing of the Term B Loan, the Company incurred $ 11.9 million of lender fees and $ 3.1 million of debt financing costs, which are being amortized through the maturity date.

The amortization of debt issuance costs was $ 1.8 million for the year ended December 31, 2025, which is included in Interest income (expense), net on the Company’s consolidated statements of operations.

The Term B Loan under the Term B Facility bears interest at the Company’s election at either (i) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75 % per annum, or (ii) in the case of ABR Term Loans, ABR plus an applicable margin of 0.75 % per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement).

As of December 31, 2025, the aggregate principal amount of Term B Loan outstanding was $ 595.5 million which bore interest at a weighted-average rate of 5.64 %.

As of December 31, 2025, the fair value of the Term B Loan approximates the carrying value, which was calculated using the estimated or actual bids and offers of the Term B Loan in an over-the-counter market on the last business day of the period, which is a Level 2 fair value measurement.

The performance of the Company’s obligations under the Credit Agreement is secured by a first-priority security interest on substantially all of its assets.

The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including dividend restrictions, a public corporate credit rating requirement for so long as any Term B Loan are outstanding, and, with respect to the Revolving Credit Facility only, a financial covenant that the Company is required to maintain a Net First Lien Leverage Ratio not to exceed 4.50 :1.00, which is tested only if the aggregate amount of (i) revolving loans outstanding and (ii) letters of credit outstanding under the Revolving Credit Facility in excess of a specified threshold

(unless cash collateralized) is in excess of 40 % of the total commitments under the Revolving Credit Facility.

As of December 31, 2025, the Company was not required to test the covenant as the aggregate amount of the revolving loans outstanding and the letters of credit outstanding did not exceed 40 % of the total commitments under the Revolving Credit Facility.

Convertible Notes and Capped Call

In March 2021, Old DraftKings issued 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”).

In March 2021, DraftKings Holdings Inc.

(formerly DraftKings Inc.), a Nevada corporation (“Old DraftKings”), issued 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”).

The Convertible Notes will mature on March 15, 2028 (the “Notes Maturity Date”), subject to earlier conversion, redemption or repurchase.

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As the transaction qualifies for equity classification, the net cost of $ 124.0 million incurred in connection with the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company's consolidated balance sheet.

As of December 31, 2024, the Company’s convertible debt balance was $ 1,256.4 million, net of unamortized debt issuance costs of $ 8.6 million.

The amortization of debt issuance costs were $ 2.7 million, $ 2.7 million and $ 2.7 million in 2024, 2023 and 2022, respectively, and these costs are included in the interest expense line-item on the Company's consolidated statements of operations.

As of December 31, 2025 and 2024, the Company’s convertible debt balance was $ 1,259.1 million and $ 1,256.4 million, net of unamortized debt issuance costs of $ 5.9 million and $ 8.6 million, respectively.

The amortization of debt issuance costs was $ 2.7 million in each of 2025, 2024 and 2023, and these costs are included in the Interest income (expense) line-item on the Company's consolidated statements of operations.

Although recorded at amortized cost on the Company’s consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,158.7 million and $ 1,076.9 million as of December 31, 2025 and 2024, respectively, which was calculated using the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last business day of the period, which is a Level 1 fair value measurement.

As of December 31, 2025, the future principal payments for the Term B Loan and Convertible Notes were as follows:

Years Ending December 31, Payments

($, millions)

2028 1,270,815

Thereafter 566,432

Total $ 1,860,511

Indirect Taxes

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Simultaneously with the closing of the IPO, DEAC completed the private sale of 6.3 million warrants to DEAC’s sponsor (the “Private Warrants”) where each whole warrant entitles the holder to purchase one share of DraftKings Inc.’s Class A common stock at an exercise price of $ 11.50 per share.

As of December 31, 2024, there were no Public Warrants outstanding and 0.4 million Private Warrants outstanding.

As of December 31, 2025, there were no Public Warrants outstanding and no Private Warrants outstanding.

As of December 31, 2024, there were no Public Warrants outstanding and 0.4 million Private Warrants outstanding.

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Effective as of the consummation of the GNOG Transaction, each of the outstanding GNOG Private Warrants became exercisable, at a price of $ 31.50 , for 0.365 of a share of DraftKings Inc.’s Class A common stock, or approximately 2.1 million shares of DraftKings Inc.’s Class A common stock in the aggregate, on the existing terms and conditions of such GNOG Private Warrants, except as otherwise described in the assignment and assumption agreement relating to the GNOG Private Warrants entered into on the GNOG Closing Date.

As of December 31, 2024 and 2023, there were 3.0 million and 5.9 million GNOG Private Warrants outstanding, respectively.

The Company classified its Public Warrants, Private Warrants and GNOG Private Warrants pursuant to ASC 815 as derivative liabilities with subsequent changes in their respective fair values recognized in its consolidated statement of operations at each reporting date.

As of December 31, 2024, and 2023 the fair value of the Company’s warrant liability was $ 22.0 million and $ 63.6 million, respectively.

Due to fair value changes the Company recorded a loss on remeasurement of warrant liabilities of $ 4.9 million, and $ 57.5 million, in 2024 and 2023, respectively, and a gain on remeasurement of warrant liabilities of $ 29.4 million in 2022.

As of December 31, 2025 and 2024, there were no and 3.0 million GNOG Private Warrants outstanding, respectively.

The Company classified its Public Warrants, Private Warrants and GNOG Private Warrants pursuant to ASC Topic 815 as derivative liabilities with subsequent changes in their respective fair values recognized in its consolidated statement of operations at each reporting date.

As of December 31, 2025 and 2024, the fair value of the Company’s warrant liability was zero and $ 22.0 million, respectively.

Due to fair value changes the Company recorded a loss on remeasurement of warrant liabilities of $ 4.7 million, $ 4.9 million, and $ 57.5 million in 2025, 2024, and 2023, respectively.

In 2025, 0.3 million Private Warrants and 3.0 million GNOG Private Warrants were exercised, resulting in a reclassification to additional paid-in-capital in the amount of $ 11.2 million and $ 6.1 million, respectively.

These exercises resulted in the issuance of approximately 1.0 million shares of DraftKings Inc.

Class A common stock as all were exercised on a cashless basis.

The GNOG Private

Warrants exercised converted into 1.1 million shares of DraftKings Inc.’s Class A common stock.

Exercises of Private Warrants and GNOG Private Warrants in 2025 resulted in the issuance of approximately 0.6 million shares of DraftKings Inc.

Class A common stock, as a portion were exercised on a cashless basis.

In 2024, 1.0 million Private Warrants were exercised resulting in a reclassification to additional paid-in-capital in the amount of $ 32.8 million, and 2.9 million GNOG Private Warrants were exercised resulting in a reclassification to additional paid-in-capital in the amount of $ 13.7 million.

In 2023, 0.2 million Private Warrants were exercised resulting in a reclassification to additional paid-in-capital in the amount of $ 4.6 million, and no GNOG Private Warrants were exercised.

In 2022, a de minimis number of Private Warrants and no GNOG Private Warrants were exercised.

See “Note 8 – Fair Value Measurements” and “Note 14 – Loss Per Share” for further information on the Company’s warrant liabilities.

See “Note 8 – Fair Value Measurements” and “Note 14 – Earnings (Loss) Per Share” for further information on the Company’s warrant liabilities.

Fair Value Measurements

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Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 184,212 $ — $ — $ 184,212

Other non-current assets:

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Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 250,055 (1)

$ — $ — $ 250,055

Other current assets:

Digital assets held for users — 46,624 (2)

Other non-current assets:

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Other current liabilities 3,300 (4)

Digital assets held for users $ — $ 46,624 (2)

Warrant liabilities $ — $ 22,033 (3)

Other long-term liabilities — 74,665 (4)

Total $ — $ 22,033 $ 77,965 $ 99,998

(1) Represents the Company’s money market funds, which are classified as Level 1 because the Company measures these assets to fair value using quoted market prices.

(2) Represents the asset and liability balance for the digital assets held by the Company for its users, which are classified as Level 2 because the Company measures these digital assets to fair value using latest transaction price for similar transactions.

(1) Represents the Company’s non-marketable equity securities, which are classified as Level 2 because the Company measures these assets to fair value using observable inputs for similar investments of the same issuer.

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A change in these significant unobservable inputs might result in a significantly higher or lower fair value measurement at the reporting date.

Changes to fair value of these instruments are recorded in Other income, net on the consolidated statements of operations and Loss on marketable equity securities and other financial assets, net in the consolidated statement of cash flows.

Changes to fair value of these instruments are recorded in Other gain (loss), net on the consolidated statements of operations and (Gain) loss on marketable equity securities and other financial assets, net in the consolidated statement of cash flows.

(3) The Company measures its Private Warrants and the GNOG Private Warrants to fair value using a binomial lattice model or a Black-Scholes model, where appropriate, with the significant assumptions being observable inputs and, accordingly, classifies these liabilities as Level 2.

Key assumptions used in the valuation of the Private Warrants and GNOG Private Warrants include term, risk free rate and volatility.

See “Note 7 – Current and Long-term Liabilities” and “Note 14 – Loss Per Share” for further information on the Company’s warrant liabilities.

(6) Represents the contingent consideration issuable to former SIQ, Dijon and Simplebet securityholders in connection with the SIQ Transaction, Dijon Transaction and Simplebet Transaction upon the achievement of certain performance targets.

See “Note 7 – Current and Long-term Liabilities” and “Note 14 – Earnings (Loss) Per Share” for further information on the Company’s warrant liabilities.

(4) Represents the contingent consideration issuable to former SIQ, Dijon, Simplebet and Railbird securityholders in connection with the acquisitions of SIQ, acquisition of Dijon, Simplebet Transaction and Railbird Transaction, respectively, upon the achievement of certain performance targets.

The fair value of contingent consideration was generally calculated using customary valuation models based on probability-weighted outcomes of meeting certain future performance targets and forecasted results.

The Company classified the contingent consideration liabilities as a Level 3 fair value measurement due to the lack of observable inputs used in the model.

The Company classified the contingent consideration liabilities as a Level 3 fair

value measurement due to the lack of observable inputs used in the model.

The key inputs to the valuations are the projections of future financial results in relation to the business, revenue risk premium, revenue volatility, and operational leverage ratio as well as management judgment regarding the probability of achieving a future performance target.

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A change in these significant unobservable inputs might result in a significantly higher or lower fair value measurement at the reporting date.

Changes to fair value of these instruments are recorded in Other income, net on the consolidated statements of operations.

December 31, 2024

Significant Unobservable Input of Level 3 Investments Range (Weighted Average)

Changes to fair value of these instruments are recorded in Other gain (loss), net on the consolidated statements of operations.

December 31, 2025 December 31, 2024

Significant Unobservable Input of Level 3 Investments Range (Weighted Average) Range (Weighted Average)

Revenue volatility 10.6 % - 17.3 % ( 15.3 %)

17.3 % - 17.7 % ( 17.6 %)

Equity volatility 45.0 % - 54.2 % ( 51.0 %)

53.4 % - 60.0 % ( 55.3 %)

Operational leverage ratio 61.0 % - 75.0 % ( 65.4 %)

During 2024, the Company recorded an unrealized loss of $ 12.9 million in the aggregate for its Level 3 financial assets.

The Company did not record any unrealized gains or losses for its Level 3 financial assets dur ing 2023, and recorded an unrealized gain of $ 19.9 million in the aggregate for its Level 3 financial assets during 2022.

65.0 % - 70.0 % ( 66.4 %)

The following table provides a roll forward of the recurring Level 3 fair value liability measurements:

Balance at December 31, 2023 $ —

Contingent consideration issued for acquisitions 77,965

Balance at December 31, 2024 $ 77,965

Contingent consideration issued for acquisitions 37,818

Payment of contingent consideration liabilities ( 3,300 )

Fair value adjustment to contingent consideration liabilities ( 38,049 )

Balance at December 31, 2025 $ 74,434

During 2025, the Company did not record any unrealized gains or losses for its Level 3 financial assets.

The Company recorded an unrealized loss of $ 12.9 million in the aggregate for its Level 3 financial assets during 2024 and did not record any unrealized gains or losses for its Level 3 financial assets dur ing 2023.

Revenue Recognition

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Total Revenue $ 6,054,525 $ 4,767,699 $ 3,665,393

Sportsbook revenue includes Online Sportsbook and Retail Sportsbook.

Other revenue primarily includes DFS, digital lottery courier, gaming software, media and advertising revenue and Marketplace.

Sportsbook revenue includes online and retail sportsbook.

Other revenue primarily includes DFS and digital lottery courier, prediction markets and, beginning in 2025, interest income of $ 25.6 million on customer deposits.

P rior period amounts were not material .

The opening and closing balances of the Company’s accounts receivable from contracts with customers were $ 57.8 million and $ 105.6 million, respectively, for the year ended December 31, 2025 and $ 47.5 million and $ 57.8 million, respectively, for the year ended December 31, 2024 .

The following table presents the Company’s revenue by geographic region for the periods indicated:

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Total Revenue $ 6,054,525 $ 4,767,699 $ 3,665,393

(1) No other country or region represents greater than 10% of our total revenue as of the dates presented, other than the United States as presented above.

(1) No country or region represents greater than 10% of our total revenue as of the dates presented, other than the United States as presented above.

Stockholders’ Equity (Deficit)

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As of December 31, 2025, the Company had 300.0 million shares authorized of preferred stock, $ 0.0001 par value, of which none were issued and outstanding as of December 31, 2025 or December 31, 2024.

Share Repurchase Program

On July 30, 2024, the Company’s Board of Directors authorized the repurchase of an aggregate of up to $ 1.0 billion of DraftKings Inc.’s Class A common stock (the “Stock Repurchase Program”).

Stock Repurchase Program

On July 30, 2024, the Company’s Board of Directors authorized the repurchase of an aggregate of up to $ 1.0 billion of DraftKings Inc.’s Class A common stock.

On November 6, 2025, the Company’s Board of Directors approved a $ 1.0 billion increase to its previous stock repurchase authorization, which brings the aggregate stock repurchase authorization to $ 2.0 billion of DraftKings Inc.’s Class A common stock (together with the July 30, 2024 authorization, the “Stock Repurchase Program”).

DraftKings may make repurchases of its 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.

The Company’s Stock Repurchase Program does not

require it to acquire any specific number or amount of Class A common stock and may be terminated at any time.

The Company’s Stock Repurchase Program does not require it to acquire any specific number or amount of Class A common stock and may be terminated at any time.

The Company may enter into Rule 10b5-1 plans from time to time to facilitate repurchases of its Class A common stock in connection with its Stock Repurchase Program.

The Company repurchased 1.1 million shares for $ 48.1 million during the year ended December 31, 2024 under the Stock Repurchase Program.

The purchases of the shares occurred in the month of December.

The Company repurchased 16.0 million and 1.1 million shares for $ 571.5 million and $ 48.1 million during the years ended December 31, 2025 and December 31, 2024, respectively, under the Stock Repurchase Program.

Stock-Based Compensation

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As of December 31, 2025, the total number of shares available for issuance under the 2020 Plan was 51.1 million shares.

There are 10.4 million shares available for issuance under the 2017 Plan, however, we no longer issue awards under the 2017 Plan.

There are 10.4 million shares available for issuance under the 2017 Plan;

however, we no longer issue awards under the 2017 Plan.

There are no securities remaining available for future issuance under the 2012 Plan as this plan has expired pursuant to the terms.

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The ESPP permits eligible employees to purchase a number of shares of the Company’s Class A common stock at a price per share that is 85 % of the lesser of the fair market value of the shares on the first or last day of the offering period, during offerings periods each year.

Employees started contributing to the ESPP in 2024 and no shares have been issued under the plan as of December 31, 2024.

Employees started contributing to the ESPP in 2024 and 0.6 million shares have been issued under the plan as of December 31, 2025.

As of December 31, 2025, a share reserve established that the aggregate number of shares may not exceed 163.3 million shares under the 2020 Plan and the ESPP.

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The fair value of time-based RSUs is estimated on the grant date using the underlying share price.

LTIP awards that were granted as RSUs subsequent to 2020 vest based on long-term revenue targets and used the underlying share price on the grant date to estimate their fair value.

On and after November 2, 2022, certain DraftKings executives agreed to delay vesting of the third tranche of their restricted stock units granted under a long-term incentive plan and to add a service condition through an extended vesting date.

This modification impacts the issuance of approximately 4 million shares of DraftKings Inc.’s Class A common stock, which vested approximately ten months after the performance condition was met.

PSP awards granted in 2025, 2024, 2023 and 2022 vest based on achievement of revenue and Adjusted EBITDA targets and have a range of payouts from 0 % to 200 %.

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Stock options are generally granted with an exercise price equal to the fair value of the common stock at the grant date with a 10 -year contractual term.

The expected term represents the period of time that the options are expected to be outstanding.

The Company uses the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No.

107, Share-Based Payment , to calculate the expected term for options granted, whereby, the expected term equals the average of the vesting term and the original contractual term of the options.

The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term.

The risk-free interest rate is estimated using the rate of return on U.S.

treasury notes with a life that approximates the expected life of the option.

The fair value of the stock options issued was measured using the following assumptions:

Year Ended December 31,

2024 2023 2022

Weighted average risk free interest rate 4.6 % 4.1 % 3.1 %

Weighted average expected term (in years) 3.6 5.9 5.6

Weighted average expected volatility 45.1 % 55.7 % 53.0 %

Weighted average expected dividend yield 0.0 % 0.0 % 0.0 %

The following table shows stock award activity for the years ended December 31, 2025 and 2024:

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(2) PSP and LTIP awards vest based on defined performance criteria and are expensed based on the probability of achieving such criteria.

(3) Total expenses includes $ 17.3 million and $ 20.2 million of liability-classified awards recorded within accounts payable and accrued liabilities in the consolidated balance sheet as of December 31, 2024 and 2023, respectively.

During the year ended December 31, 2024, we capitalized stock-based compensation primarily associated with the development of software for internal-use of $ 17.8 million.

The weighted-average grant-date fair values of options granted during the years ended December 31, 2024, 2023 and 2022 were $ 22.86 , $ 8.59 and $ 7.46 per share, respectively.

(3) Total expenses includes $ 10.7 million, $ 17.3 million and $ 20.2 million of liability-classified awards recorded within accounts payable and accrued liabilities in the consolidated balance sheet as of December 31, 2025, 2024 and 2023, respectively.

During the years ended December 31, 2025 and 2024, we capitalized stock-based compensation primarily associated with the development of software of $ 23.5 million and $ 17.8 million, respectively.

During the years ended December 31, 2025, 2024 and 2023 the Company received proceeds from the exercise of stock options of $ 10.6 million, $ 9.2 million and $ 16.5 million, respectively, and the aggregate intrinsic value of those stock options exercised was $ 118.5 million, $ 78.3 million and $ 101.7 million, respectively.

The total grant date fair value of stock options that vested during the years ended December 31, 2024, 2023 and 2022 were $ 13.4 million, $ 11.1 million and $ 15.3 million, respectively.

The total grant date fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 were $ 484.1 million, $ 212.7 million and $ 893.2 million, respectively.

Loss before income tax (benefit) provision for the years ended December 31, 2024, 2023 and 2022 consists of the following:

The total fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023, based on the closing price at vesting dates, were $ 981.1 million, $ 318.1 million and $ 532.1 million, respectively.

Income (loss) before income tax (benefit) provision for the years ended December 31, 2025, 2024 and 2023 consists of the following:

Year Ended December 31,

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Foreign 36,368 ( 7,154 ) ( 38,148 )

Loss before income tax (benefit) provision $ ( 593,158 ) $ ( 791,253 ) $ ( 1,442,958 )

The components of the provision (benefit) for income taxes consists of the following:

Income (loss) before income tax (benefit) provision $ 7,013 $ ( 593,158 ) $ ( 791,253 )

The components of the income tax (benefit) provision consists of the following:

Year Ended December 31,

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Foreign ( 597 ) 485 3,001

Total deferred provision ( 92,733 ) 5,849 ( 73,407 )

Total deferred (benefit) provision ( 18,225 ) ( 92,733 ) 5,849

Total income tax (benefit) provision $ 4,274 $ ( 86,341 ) $ 10,170

The reconciliation between income taxes computed at the U.S.

statutory income tax rate to our provision for income taxes for the years ended December 31, 2024, 2023 and 2022 is as follows:

statutory income tax rate to our (benefit) provision for income taxes for the years ended December 31, 2025, 2024 and 2023 is as follows:

Year ended December 31, 2025

2024 2023 2022

Federal Statutory Tax Rate 1,473 21.0 %

State and Local Income Taxes (1)

Effect of Cross-Border Tax Laws 991 14.1 %

R&D Credit Generation ( 31,275 ) ( 446.0 ) %

Changes in Valuation Allowance 50,856 725.2 %

Nontaxable or Nondeductible Items

Stock based compensation (benefit) expense ( 121,405 ) ( 1731.1 ) %

Non-deductible executive compensation 81,305 1159.3 %

Non-deductible lobbying expenses 6,831 97.4 %

Mark-to-market earn-out gain ( 7,957 ) ( 113.5 ) %

Other 9,327 133.0 %

Other Adjustments 1,021 14.6 %

Other Foreign Jurisdictions ( 2,187 ) ( 31.2 ) %

Changes in Unrecognized Tax Benefits 15,241 217.3 %

Income Tax Expense $ 4,274 61.0 %

(1) State taxes attributable to New Jersey, New York State, New York City, and Michigan made up the majority (greater than 50 percent) of the tax effect in this category.

Years Ended December 31,

Benefit for income taxes at 21% rate $ ( 124,563 ) $ ( 166,217 )

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Net operating loss carryforwards $ 1,190,449 $ 1,100,214

R&D credit carryforwards 38,992 15

Intangible assets 13,867 13,770

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Deferred tax liabilities:

Capitalized software costs $ — $ ( 4,535 )

Fixed assets $ ( 139 ) $ ( 108 )

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For the years ended December 31, 2025 and 2024, the U.S.

valuation allowance increased by $ 94.8 million (of which $ 76.5 million was established through goodwill and $ 18.3 million was established through the consolidated statement of operations), and $ 130.8 million, respectively primarily due to the operating losses.

valuation allowance increased by $ 74.7 million and $ 98.4 million, respectively, which primarily related to the current year operating losses.

As of December 31, 2025, the Company had U.S.

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Of the state NOL carryforward, $ 4.1 billion expires at various dates beginning in 2025 through 2045 and $ 0.3 billion does not expire.

As of December 31, 2025, we had federal research tax credit carryforwards of $ 45.0 million, before the impact of uncertain tax positions, that will begin to expire in 2040.

We have state research tax credit carryforwards of $ 13.9 million, before the impact of uncertain tax positions, that will begin to expire in 2035.

Utilization of the NOL carryforwards may be subject to limitation under Section 382 of the Internal Revenue Code of 1986 based on ownership changes that could occur in the future.

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deferred tax assets.

As of December 31, 2024, foreign earnings of $ 9.7 million have been retained by the Company’s foreign subsidiaries for indefinite reinvestment.

As of December 31, 2025, foreign earnings have been retained by the Company’s foreign subsidiaries for indefinite reinvestment.

Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to withholding taxes payable to the various foreign countries.

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As of December 31, 2025, 2024 and 2023, the Company had $ 64.3 million, $ 54.2 million and $ 55.9 million, respectively, of net unrecognized tax benefits, which would affect the Company’s tax rate if recognized.

The Company does not anticipate any material changes to its unrecognized tax benefits within the next twelve months.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits as income tax expense.

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If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessment is determined.

A reconciliation of income taxes paid (refunded) by jurisdictions is as follows:

Year Ended December 31,

US Federal $ 617

Pennsylvania 1,974

Illinois 1,541

Other States 2,490

Israel ( 1,868 )

Other Foreign Jurisdictions 813

Total $ 8,236

Segment Information

The Company has one consolidated reportable segment.

This segment provides users with Sportsbook, iGaming, DFS and digital lottery courier product offerings, media, and other online product offerings as well as the design, development and licensing of sports betting and casino gaming software for its Sportsbook and iGaming product offerings.

This segment provides users with Sportsbook, iGaming, DFS, digital lottery courier, prediction markets product offerings, and other online product offerings as well as the design, development and licensing of sports betting and casino gaming software for its Sportsbook and iGaming product offerings.

The Company drives revenue primarily in North America and manages the business activities on a consolidated basis.

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The Company's CODM is its Co-founder and Chief Executive Officer.

The CODM uses net income (loss) to allocate resources and assess the performance of the Company by comparing actual results to historical results and previously forecasted financial information and the allocation of budget between cost of revenues, sales and marketing, product and technology, and general and administrative expenses.

The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets.

The accounting policies of the Company’s consolidated segment are the same as those described in “Note 2 – Summary of Significant Accounting Polices and Practices.” Any intercompany revenues or expenses are eliminated in consolidation.

The CODM uses net income (loss) to allocate resources and assess the performance of the Company by comparing actual results to historical results and previously forecasted financial information and the allocation of budget among cost of revenues, sales and marketing, product and technology, and general and administrative expenses.

The measure of segment assets is reported on the consolidated balance sheet as Total assets.

The accounting policies of the Company’s consolidated segment are the same as those described in “Note 2 – Summary of Significant Accounting Policies and Practices.” Any intercompany revenues or expenses are eliminated in consolidation.

The following table presents revenue, significant expenses, and net income (loss) for our consolidated segment:

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Total revenue $ 6,054,525 $ 4,767,699 $ 3,665,393

Gaming tax 1,658,114 1,235,272 716,451

Other adjusted cost of revenue (1)

1,061,992 872,178 612,331

Total Adjusted Cost of Revenue 2,720,106 2,107,450 1,328,782

Cost of revenue:

Gaming taxes 2,110,590 1,658,114 1,235,272

Cost of revenue:

Other 1,189,909 1,061,992 872,178

Adjusted sales and marketing expenses (2)

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Depreciation and amortization 275,488 270,854 201,920

Interest income ( 47,259 ) ( 58,418 ) ( 21,353 )

Interest expense 2,959 2,679 2,651

Interest (income) expense, net 19,941 ( 44,300 ) ( 55,739 )

Stock-based compensation 339,311 381,367 398,463

Transaction-related costs (3)

26,386 3,060 17,315

Litigation, settlement and related costs (4)

81,246 34,500 7,010

Advocacy and other related legal expenses (5)

16,049 — 16,558

Loss (gain) on remeasurement of warrant liabilities 4,945 57,543 ( 29,396 )

Loss on equity method investment 468 719 2,895

Income tax (benefit) provision 4,274 ( 86,341 ) 10,170

Other expenses (6)

Other segment items (3)

( 22,737 ) 167,012 96,293

Consolidated net income (loss) $ 3,710 $ ( 507,285 ) $ ( 802,142 )

(1) Other adjusted cost of revenue includes all cost of revenue, other than gaming tax, presented in the statement of operations, adjusted for the impact of depreciation and amortization and stock-based compensation.

(2) These items represent the respective line items in the statement of operations, adjusted for the impact of depreciation and amortization;

(1) Cost of revenue:

Other includes all cost of revenue, other than gaming tax, presented in the consolidated statements of operations, adjusted for the impact of depreciation and amortization and stock-based compensation.

(2) These items represent the respective line items in the consolidated statements of operations, adjusted for the impact of depreciation and amortization;

stock-based compensation;

transaction-related costs;

litigation, settlement and related costs;

advocacy and other related legal expenses;

certain litigation, settlement and related costs;

certain advocacy and other related legal expenses;

and other expenses, as further described below.

(3) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions under consideration, pending, or completed transactions and offerings, including costs relating to our completed acquisitions of Jackpocket, SIQ, Dijon and Simplebet.

(4) Primarily includes certain external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.

(5) Reflects certain costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings.

This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate.

(6) Other expenses are defined other certain costs that were not included in the above categories including any gain or loss on the disposal of a business and termination expenses.

Loss Per Share

The computation of loss per share and weighted-average shares of the Company’s Class A common stock outstanding for the periods presented are as follows:

(3) Other segment items include:

(i) transaction-related costs;

(ii) certain external legal costs related to litigation and litigation settlement costs deemed unrelated to our ordinary-course business operations;

(iii) certain costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings, excluding costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate;

(iv) (gain) loss on remeasurement of warrant liabilities;

(v) (gain) loss from equity method investments and (vi) other items not associated with our primary offerings, such as gains or losses on contingent consideration, gain or losses on business disposals and termination-related expenses.

Earnings (Loss) Per Share

The computation of Earnings (loss) per share and weighted-average shares of the Company’s Class A common stock outstanding for the periods presented are as follows:

Year ended December 31,

2025 2024 2023

Net loss $ ( 507,285 ) $ ( 802,142 ) $ ( 1,377,987 )

Basic and diluted weighted-average common shares outstanding 481,954 462,599 436,513

Loss per share attributable to common stockholders:

Basic and diluted $ ( 1.05 ) $ ( 1.73 ) $ ( 3.16 )

Net income (loss) attributable to common stockholders – basic $ 3,710 $ ( 507,285 ) $ ( 802,142 )

(Gain) loss on remeasurement of warrant liabilities ( 6,152 ) — —

(Gain) loss on remeasurement of contingent consideration ( 1,591 ) — —

Net income (loss) attributable to common stockholders – diluted $ ( 4,033 ) $ ( 507,285 ) $ ( 802,142 )

Weighted-average Class A common stock outstanding – basic 495,638 481,954 462,599

Weighted-average diluted impact of warrant liabilities (1)

Weighted-average diluted impact of contingent consideration (1)

Diluted weighted-average common shares outstanding 495,903 481,954 462,599

Basic earnings (loss) per share attributable to common stockholders:

$ 0.01 $ ( 1.05 ) $ ( 1.73 )

Diluted earnings (loss) per share attributable to common stockholders:

$ ( 0.01 ) $ ( 1.05 ) $ ( 1.73 )

(1) Calculated using the treasury stock method

For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding:

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Related-Party Transactions

Financial Advisor

On May 7, 2021, DraftKings entered into a master engagement letter (as amended, the “Master Engagement Letter”), with Raine Securities LLC (the “Financial Advisor”), an affiliate of Raine.

John Salter, who served as a member of our Board of Directors until April 2022, is a partner of Raine.

Pursuant to the Master Engagement Letter, Raine Securities will act as a financial advisor to DraftKings in connection with certain proposed transactions, and DraftKings will pay Raine Securities certain fees and expenses from time to time on the terms and conditions described in the related statements of work.

During 2022, when Raine was a related party, the Company incurred $ 8.5 million of professional fees in connection with certain business combination transactions and offerings undertaken by the Company, which are recorded within general and administrative expenses on the consolidated statement of operations.

Receivables from Equity Method Investments

Equity Method Investments

The Company has committed to invest up to $ 17.5 million into DBDK Venture Fund I, LP and $ 21.0 million in DBDK Fund II, L.P.

Both funds are Delaware limited partnerships and are both managed by Drive by DraftKings, LLC (“DBDK”) .

As of December 31, 2024, the Company had invested a total of $ 11.0 million and $ 0.0 million of the total commitment in DBDK Venture Fund I, L.P.

As of December 31, 2025, the Company had invested a total of $ 12.8 million and none of the total commitment in DBDK Venture Fund I, L.P.

and DBDK Fund II, L.P., respectively.

The Company also provides office space and general operational support to DBDK, which is partially owned by DKFS, LLC, an equity-method affiliate in which the Company has a 49.9 % membership interest, in exchange for services-in-kind.

The Company also provides office space and general operational support to

DBDK, which is partially owned by DKFS, LLC, an equity-method affiliate in which the Company has a 49.9 % membership interest, in exchange for services-in-kind.

The operational support is primarily general and administrative services.

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The Company previously had sales to entities related to an immediate family member of a former director who ceased being a director in May 2023.

During 2023 and 2022, the Company had $ 1.4 million and $ 2.3 million, respectively, in sales to those entities.

Starting in 2022, from time to time, the Company has chartered, without mark-up, the private plane owned by Jason Robins, the Company’s Chief Executive Officer, utilizing aircraft services from Jet Aviation Flight Services, Inc.

for the business and personal travel of Mr.

Robins and his family.

The Company had no direct or indirect interest in such private plane.

During 2024 and 2023, the Company incurred no expenses and during 2022, the Company incurred $ 0.7 million of expense, for use of the aircraft under these chartering services, which was superseded by the lease referred to below.

On March 30, 2022, the Company entered into a one-year lease of an aircraft from an entity controlled by Mr.

During 2023, the Company had $ 1.4 million in sales to those entities.

On each of March 30, 2025, 2024 and 2023, the Company entered into a one-year lease of an aircraft from an entity controlled by Mr.

Robins, pursuant to which Mr.

Robins’ entity leased the aircraft to the Company for $ 0.6 million for a one-year period (the “Original Aircraft Lease”).

Robins’ entity leased the aircraft to the Company for $ 0.6 million for a one-year period (the “Aircraft Leases”).

The Company covered all operating, maintenance and other expenses associated with the aircraft.

The Original Aircraft Lease expired in accordance with its terms on March 30, 2023, and on each of March 30, 2024 and 2023 DraftKings entered into a new one-year lease of such aircraft from an entity controlled by Mr.

Robins for $ 0.6 million and otherwise on terms and conditions substantially the same as the Original Aircraft Lease, effective upon the expiration of the Original Aircraft Lease (collectively with the Original Aircraft Lease, the “Aircraft Leases”).

The audit and compensation committees of the Company’s Board of Directors approved this arrangement, as well as the Aircraft Leases, based on, among other things, the requirements of the overall security program that Mr.

Robins and his family fly private and the committees’ assessment that such an arrangement is more efficient and flexible and better ensures safety, confidentiality and privacy.

During 2024, 2023 and 2022, the Company incurred $ 0.6 million, $ 0.6 million and $ 0.4 million of expense, respectively, under the Aircraft Lease as well as $ 0.9 million during 2024 for upgrades related to the aircraft.

During 2025, 2024 and 2023, the Company incurred $ 0.6 million, $ 0.6 million and $ 0.6 million of expense, respectively, under the Aircraft Lease as well as $ 2.9 million and $ 0.9 million during 2025 and 2024, respectively, for upgrades related to the aircraft.

Leases, Commitments and Contingencies

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The components of lease expense are as follows:

December 31, 2024 December 31, 2023 December 31, 2022

Year Ended December 31,

2025 2024 2023

Operating lease cost $ 16,295 $ 20,206 $ 19,175

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Supplemental cash flow and other information for 2025, 2024 and 2023 related to operating leases was as follows:

December 31, 2024 December 31, 2023

Year Ended December 31,

2025 2024 2023

Cash paid for amounts included in the measurement of lease liabilities:

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The weighted-average remaining lease term and weighted-average discount rate were as follows:

December 31, 2024 December 31, 2023

2025 2024 2023

Weighted-average remaining lease term (in years) 5.5 6.4 7.3

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Total $ 2,272,008

As of December 31, 2024, the Company has been issued $ 400.0 million in surety bonds at a combined annual premium cost of 0.4 % which are held for certain regulators’ use and benefit in order for the Company to satisfy state license requirements.

The above commitments include $ 1.3 billion of expected contractual obligations over the next five years as part of multi-year content integration agreements signed with three media distribution counterparties in the third quarter of 2025.

As of December 31, 2025, the Company has been issued $ 500.0 million in surety bonds at a weighted average annual premium cost of 0.5 % which are held for certain regulators’ use and benefit in order for the Company to satisfy state license requirements.

There have been no claims against such bonds and the likelihood of future claims is remote.

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We cannot predict with any degree of certainty the outcome of these matters or determine the extent of any potential liabilities.

On July 7, 2021, Winview Inc., a Delaware corporation (“Winview”) filed suit against the Company in the U.S.

District Court for the District of New Jersey.

On July 7, 2021, Winview Inc., a Delaware corporation (“Winview”) filed suit against the Company in the United States District Court for the District of New Jersey.

In the complaint, Winview alleges that the Company infringes two patents:

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The SAC, among other allegations, repeats the allegations of the first amended complaint that the defendants infringe the ’243 Patent, the ’543 Patent, the ’730 Patent, and the ’988 Patent.

On December 15, 2021, the Company filed its motion to dismiss the SAC, arguing that Winview failed to state a claim for direct infringement of the ’543 Patent and the ’730 Patent, and for willful, induced, and contributory infringement for all four asserted patents.

On August 3, 2022, we filed a petition for inter partes review with the PTAB challenging the validity of the ‘243 Patent.

On December 15, 2021, the Company filed a motion to dismiss the

SAC, arguing that Winview failed to state a claim for direct infringement of the ’543 Patent and the ’730 Patent, and for willful, induced, and contributory infringement for all four asserted patents.

On August 3, 2022, we filed a petition for inter partes review with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the ‘243 Patent.

On July 25, 2022, FanDuel filed petitions for inter partes review with the PTAB challenging the validity of the '543 and '730 Patents.

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10,721,543 as well as Winview’s claim for willful, induced, and contributory infringement for the two remaining patents-in-suit.

The case remains stayed and administratively terminated pending the outcome of the motion to dismiss.

On July 11, 2025, the court granted the Company’s motion to dismiss without prejudice.

On August 11, 2025, WinView filed an amended complaint alleging infringement of different claims of the ’543 and ’988 Patents, and alleging infringement by DK Sportsbook, DFS, DK Casino, Pick6, and DK Horse.

On September 26, 2025, DraftKings filed a motion to dismiss WinView’s direct infringement claims for the ’543 Patent and WinView’s claim for willful, induced, and contributory infringement for the two remaining patents-in-suit.

We intend to vigorously defend this case.

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In the Counterclaims we seek, among other things, a declaratory judgment that the Arrow Gaming Patents are invalid.

On December 1, 2021, Arrow

Gaming answered our Counterclaims.

On December 20, 2021, Arrow Gaming filed a second amended complaint adding new allegations with respect to the alleged willful infringement.

On December 1, 2021, Arrow Gaming answered our Counterclaims.

On December 20, 2021, Arrow Gaming filed a second amended complaint adding new allegations with respect to alleged willful infringement.

On January 21, 2022, the Company filed a motion to dismiss plaintiff’s second amended complaint.

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10,997,822 (“the ’822 patent”).

On January 24, 2022, the Company filed its motion to dismiss the original complaint.

On January 24, 2022, the Company filed a motion to dismiss the original complaint.

On February 7, 2022, Colossus filed an amended complaint (the “Amended Complaint”) to, among other things, assert one additional patent against the Company, U.S.

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The patents asserted by Colossus are collectively referred to as the “Colossus Patents.”

The Company filed its motion to dismiss the Amended Complaint on February 22, 2022.

The Company filed a motion to dismiss the Amended Complaint on February 22, 2022.

On July 18, 2022, Magistrate Judge Burke issued a report and recommendation (the “Report and Recommendation”) that the motion to dismiss be granted-in-part and denied-in-part.

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On November 7, 2023, the Director of the U.S.

Patent and Trademark Office delegated Director Review of the PTAB’s institution decision in the IPR for the ’779 Patent to the Delegated Review Panel (“DRP”) to determine whether to grant rehearing.

Patent and Trademark Office delegated Director

Review of the PTAB’s institution decision in the IPR for the ’779 Patent to the Delegated Review Panel (“DRP”) to determine whether to grant rehearing.

On February 21, 2024, the DRP issued a decision vacating the PTAB’s denial of institution of the IPR directed to the ’779 Patent and instructing the PTAB to reconsider institution.

On May 15, 2024, the PTAB instituted the IPR directed to the ‘779 Patent.

Colossus filed its Patent Owner Response on August 9, 2024.

The Company filed its reply on November 8, 2024.

Colossus’ filed its sur-reply on December 20, 2024.

Oral argument is schedule for February 20, 2025.

On May 9, 2025, the PTAB issued a final written decision finding all claims of the ’779 Patent that were asserted in the litigation unpatentable.

On July 7, 2025, Colossus filed a Notice of Appeal in the United States Court of Appeals for the Federal Circuit, challenging the PTAB’s final written decision in the IPR directed to the ’779 Patent.

On October 17, 2025, Colossus filed its opening brief in the appeal, and on January 26, 2026, the Company filed its responsive brief in the appeal.

On March 15, 2024, the parties entered into a partial settlement agreement, in which the parties agreed to, among other things:

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Steiner’s action, and the court officially closed the MDL docket on July 8, 2022.

Steiner brings this action as a concerned citizen of the state of Florida alleging that, among other things, defendants’ daily fantasy sports contests are illegal gambling under the state laws of Florida and seeks disgorgement of “gambling losses” purportedly suffered by Florida citizens on behalf of the state.

Steiner brought this action as a concerned citizen of the state of Florida alleging that, among other things, defendants’ daily fantasy sports contests are illegal gambling under the state laws of Florida and sought disgorgement of “gambling losses” purportedly suffered by Florida citizens on behalf of the state.

On June 23, 2022, the MDL court remanded Mr.

Steiner’s action to the Circuit Court for Pinellas County, Florida.

Plaintiff has not yet filed an amended pleading.

The Company intends to vigorously defend this suit.

Any adverse outcome in this matter could subject the Company to substantial damages and it could be restricted from offering DFS contests in Florida.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Securities Matters Arising From Marketplace and Related Matters

On March 9, 2023, a putative class action was filed in Massachusetts federal court by an alleged purchaser of non-fungible tokens (“NFTs”) on the Marketplace.

The complaint asserts claims for violations of federal and state securities laws against the Company and three of its officers on the grounds that, among other things, the NFTs that are sold and traded on Marketplace allegedly constitute securities that were not registered with the SEC in accordance with federal and Massachusetts law, and that Marketplace is a securities exchange that is not registered in accordance with federal and Massachusetts law.

Based on these allegations, the plaintiff brings claims seeking rescissory damages and other relief on behalf of himself and a putative class of persons who purchased NFTs on Marketplace between August 11, 2021 and the present.

On September 25, 2023, defendants

filed a motion seeking dismissal of this action.

On July 2, 2024, the district court denied the motion to dismiss.

We intend to vigorously defend this case.

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 United States Securities and Exchange Commission 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.

We intend to comply with these requests.

Any adverse outcome in the subpoena matters could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of the subpoena matters.

The Company cannot predict with any degree of certainty the outcome of the subpoena matters or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in the subpoena matters could expose the Company to substantial damages, penalties and/or require alterations to the Company that may have a material adverse impact on the Company’s operations and cash flows.

On September 9, 2025, DraftKings and FanDuel jointly moved to dismiss Steiner’s amended complaint.

On November 19, 2025, the Court granted the motion to dismiss the amended complaint with prejudice.

Shareholder Derivative Litigation Related to Marketplace

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On December 23, 2024, the plaintiffs filed a consolidated amended complaint.

The complaint purports to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company for breach of fiduciary duty, aiding-and-abetting breach of fiduciary duty, unjust enrichment, and corporate waste based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law and/or operate the Company as an unregistered broker-dealer or securities exchange in violation of applicable law.

The complaint also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The actions seek unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

The defendants have not yet answered or otherwise responded to the complaint.

The Company cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

The Company also cannot provide an estimate of the possible loss or range of loss.

Because this action alleges claims on behalf of the Company and purports to seek a judgment in favor of the Company, the Company does not believe, based on currently available information, that the outcome of the proceedings will have a material adverse effect on the Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

The amended complaint purports to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law.

The amended complaint also alleges that certain individuals are liable for trading in Company stock based on non-public information about its NFT business.

The amended complaint seeks unspecified compensatory damages on the Company's behalf, changes to corporate governance and internal procedures, costs and attorney’s fees, and other unspecified relief.

On February 21, 2025, the defendants moved to dismiss the amended complaint.

On September 12, 2025, the court entered an order granting in part and denying in part the defendants’ motion to dismiss on the merits pursuant to Rule 12(b)(5).

The court dismissed without prejudice the plaintiffs’ first, second, and fifth causes of action—asserting breach of fiduciary duty,

corporate waste, and insider trading—under Rule 12(b)(5).

The court denied without prejudice the defendants’ motion under Rule 12(b)(5) as to the plaintiffs’ third and fourth causes of action—alleging the sale of unregistered securities and transacting business as an unlicensed broker-dealer.

The court deferred consideration of the defendants’ separate motion to dismiss for failure to plead demand futility under Rule 23.1, and granted the plaintiffs leave to file an amended complaint within thirty days of entry of the order.

After plaintiffs declined to replead the previously dismissed claims, on November 17, 2025, the defendants renewed their motion to dismiss for failure to plead demand futility under Rule 23.1.

On February 3, 2026, the court issued an oral ruling, to be confirmed in a subsequent written order, dismissing the remaining claims with prejudice.

On December 8, 2023, plaintiffs Melissa Scanlon and Shane Harris, individually and on behalf of others similarly situated, filed a purported class action lawsuit against DraftKings in Middlesex County Superior Court of Massachusetts.

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On March 26, 2024, the case was transferred to the Business Litigation Session (“BLS”) of the Massachusetts Superior Court.

On January 29, 2024, DraftKings served its Motion to Dismiss all of Plaintiffs’ claims.

On January 29, 2024, DraftKings filed a motion to dismiss all of plaintiffs’ claims.

On August 19, 2024, the court denied the motion to dismiss.

On October 10, 2025, DraftKings served its motion for summary judgment, which remains pending.

The Company intends to vigorously defend this case.

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The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome

in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On June 10, 2024, plaintiff Matthew McAfee, individually and on behalf of all others similarly situated, filed a purported class action lawsuit against DraftKings in the Hamilton County Superior Court, State of Indiana.

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On February 12, 2025, McAfee filed a motion for leave to file a first amended complaint.

On November 20, 2024, Plaintiff filed a motion for class certification.

On December 16, 2024, DraftKings filed its opposition, and on December 24, 2024, Plaintiff filed his reply.

The class certification motion remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On September 30, 2024, plaintiff Nerye Aminov, individually and on behalf of others similarly situated, filed a purported class action lawsuit against DraftKings in the Supreme Court of the State of New York, County of Queens.

Among other things, Plaintiff alleges that the Company’s promotion that offered new customers an opportunity to earn up to 1,000 in site credits, and related advertisements were unfair or deceptive practices in violation of New York General Business Law §§ 349-350.Plaintiff also asserts claims for intentional misrepresentation, fraudulent inducement, and quasi-contract/unjust enrichment.

Plaintiff seeks, among other things, injunctive relief, actual damages, punitive damages, and attorneys’ fees.

Plaintiff seeks to certify a nationwide class, with a New York subclass.

On December 11, 2024, DraftKings removed this matter to the United States District Court for the Eastern District of New York.

DraftKings filed its motion to dismiss on February 3, 2025.

That motion remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

National Football League Players Association

On August 20, 2024, the plaintiffs, National Football League Players Association and National Football League Players Incorporated, filed a complaint against DraftKings in the United States District Court for the Southern District of New York alleging, among other things, that DraftKings breached its Licensing Agreement (the “Agreement”) with the plaintiffs.

The plaintiffs are seeking, among other things, payment of all purported unpaid sums due under the Agreement On November 25,

2024, DraftKings filed its partial motion to dismiss the complaint;

on December 16, 2024, NFLPA filed its opposition;

and on January 3, 2025, DraftKings filed its reply.

On January 27, 2025, the parties filed a joint motion to stay the action until March 28, 2025 on the basis that the parties had reached a non-binding settlement in principle, subject to the mutual execution of a definitive settlement agreement.

On January 28, 2025, the court ordered a dismissal of the action without prejudice to the right to reopen the action within thirty days of the date of the order if the settlement is not consummated.

We have established an accrual for this matter as of December 31, 2024.

On December 13, 2024, Plaintiff Jeffrey Wan, individually and on behalf of all others similarly situated, filed a purported class action complaint against the Company in the United States District Court for the Southern District of New York.

Plaintiff alleges, among other things, that the Company violated the Video Privacy Protection Act (“VPPA”) through the use of pixels and other tracking technologies on the Company’s website and mobile application in connection with the Company’s online casino games.

Plaintiff seeks, among other things, compensatory, punitive and statutory damages, and declaratory relief.

DraftKings response to the complaint is due on February 21, 2025.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On December 23, 2024, Plaintiff Eric Avila, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and DK Player Reserve LLC in the United States District Court, District of Massachusetts.

Plaintiff alleges that DraftKings has interfered or prevented customers from withdrawing balances from closed accounts.

Plaintiff asserts claims for breach of contract, violation of Texas Deceptive Trade Practices Act, fraud, unjust enrichment, and conversion.

Plaintiff seeks, on behalf of himself and the purported class, damages, punitive damages and attorney fees.

Plaintiff seeks a nationwide class of (i) all persons whose DraftKings’ accounts were terminated by DraftKings and who were denied access to their account balances by DraftKings;

and (ii) a Texas subclass of all persons in Texas whose DraftKings accounts were terminated by DraftKings and who were denied access to their account balances by DraftKings.

DraftKings’ response to the complaint is currently due on April 1, 2025.

On May 9, 2025, the court denied the motion to amend.

On November 20, 2024, plaintiff filed a motion for class certification, and on June 11, 2025, plaintiff filed an amended motion for class certification.

On December 9, 2025, the Court granted the class certification motion.

On October 21, 2025, plaintiff filed a motion for summary judgment.

On November 17, 2025, DraftKings’ filed an opposition to plaintiffs’ summary judgment motion and its own summary judgment motion.

Both motions remain pending.

The Company intends to vigorously defend this case.

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Among other things, plaintiff alleges that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered new customers an opportunity to earn up to 1,000 site credits as a sportsbook deposit match, as well as promotions that offered site credits in connection with a casino deposit match, were unfair, unconscionable, and misleading.

Plaintiff asserts claims for violation of the New Jersey Consumer Fraud Act, intentional misrepresentation, negligence, unjust enrichment, and conversion.

The plaintiff's complaint, as amended, asserts claims for violation of the New Jersey Consumer Fraud Act (“CFA”), intentional misrepresentation, unjust enrichment, and conversion.

Plaintiff seeks compensatory damages, punitive damages, attorney fees and costs.

Plaintiff seeks to certify a nationwide class of anyone who participated in the casino deposit match promotion and lost part of all of their initial deposit (with subclasses for New Jersey, Connecticut, Pennsylvania,

Michigan, and West Virginia).

Plaintiff seeks to certify a nationwide class of anyone who participated in the casino deposit match promotion and lost part or all of their initial deposit (with subclasses for New Jersey, Connecticut, Pennsylvania, Michigan, and West Virginia).

Plaintiff also seeks a statewide class of (i) anyone in New Jersey who allegedly opted into the “risk free” or “no sweat” promotion and lost a bet;

and (ii) anyone in New Jersey who opened an account and deposited money while in New Jersey in response to the 1,000 new customer sportsbook deposit match promotion.

DraftKings’ response to the Complaint is due on March 27, 2025.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

James Beyer and Wyatt Robertson

On January 7, 2025, Plaintiffs James Beyer and Wyatt Robertson, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and Crown KY Gaming LLC in the United States District Court, Western District of Kentucky.

Among other things, Plaintiffs allege that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered new customers an opportunity to earn up to 1,000 site credits as a deposit match, were unfair and misleading.

Plaintiffs also allege that DraftKings targets underage users with its advertising and by allowing them to participate in daily fantasy sports contests in order to inculcate gaming habits.

Plaintiffs bring claims for violation of the Kentucky Consumer Protection Act, intentional misrepresentation, fraudulent inducement, unjust enrichment, and declaratory relief.

Plaintiffs seek, among other things, compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class of (i) anyone who opted into a DraftKings promotion advertising a “risk-free” or “no sweat” bet and lost their bet (with a Kentucky subclass);

(ii) anyone who opened an account and deposited money in response to the new customer 1,000 site credit promotion (with a Kentucky subclass);

and (iii) anyone who opened an account and entered free promotions on DraftKings’ platform before reaching their legal gaming age and then placed paid bets on DraftKings after reaching the legal gaming age (with a Kentucky subclass).

Plaintiffs also seek a declaration that DraftKings has breached agreements with Apple and Google relating to their respective app stores.

DraftKings’ response to the Complaint is due on March 31, 2025.

On March 27, 2025, DraftKings filed a motion to dismiss the complaint.

In response to the motion to dismiss, on April 17, 2025, plaintiff Matthew Youngs and a second plaintiff (Jason Lombardozzi), individually and on behalf of all others similarly situated, filed a first amended purported class action complaint against DraftKings Inc.

and Crown NJ Gaming Inc.

dba DraftKings.

In the amended complaint, the plaintiffs removed DGMB Casino and Resorts Atlantic as defendants and removed claims of negligence.

In the amended complaint, the plaintiffs added new CFA claims alleging that (i) the casino deposit match was unconscionable because it inculcated gaming addiction and (ii) the Company engaged in unconscionable conduct by targeting customers with casino deposit match promotions after such customers had become addicted to gaming.

The court terminated the Defendants’ motion to dismiss as moot due to the plaintiffs filing an amended complaint.

On May 22, 2025, DraftKings filed a motion to dismiss the amended complaint.

On July 23, 2025, the court granted the motion to dismiss with prejudice regarding the unjust enrichment claim and dismissing without prejudice all other claims.

On August 13, 2025, plaintiffs filed a second amended complaint:

dismissing Lombardozzi as a plaintiff and added a new plaintiff (Charles Thompson);

dismissing their CFA claims alleging that the casino deposit match promotions allegedly inculcated gaming or were otherwise unconscionable;

and added two new intentional misrepresentation claims related to the “risk free” and “no sweat promotions,” and new customer sportsbook deposit match promotion.

Plaintiffs seek to certify nationwide classes of persons who opted into each of the promotions at issue, as well as a New Jersey subclass.

On September 10, 2025, DraftKings filed a motion to dismiss the second amended complaint.

On November 19, 2025, the Court granted the motion in part and denied it in part, allowing plaintiffs’ CFA and common law fraud claims as to the “risk free” promotion to proceed, as well as an equitable fraud claim concerning the casino deposit match promotion.

DraftKings filed its answer to the second amended complaint on December 17, 2025

The Company intends to vigorously defend this case.

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in the Circuit Court of Cook County, Illinois Law Division.

Among other things, plaintiffs allege that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered

new customers an opportunity to earn up to 1,000 site credits as a deposit match, were unfair and misleading.

Plaintiffs also allege that DraftKings targets underage users with its advertising and by allowing them to participate in daily fantasy sports contests in order to inculcate gaming habits.

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On February 7, 2025, DraftKings removed the complaint to the United States District Court, Northern District of Illinois, Eastern Division.

DraftKings response to the complaint is due on April 4, 2025.

On April 4, 2025, DraftKings filed a motion to dismiss.

In response, on May 9, 2025, plaintiffs filed their First Amended Complaint.

On June 12, 2025, DraftKings filed a motion to dismiss the First Amended Complaint.

Plaintiffs filed their Opposition to the Motion to Dismiss on July 9, 2025, and DraftKings’ filed its reply on July 28, 2025.

The motion remains pending.

On August 8, 2025, the court ordered the parties to provide a supplemental brief setting forth the basis for the court’s subject matter jurisdiction under the Class Action Fairness Act in light of the mandatory “local controversy exception” contained in 28 U.S.C.

§1332(d)(4)(A).

On November 20, 2025, the Court ruled that it had jurisdiction under the Class Action Fairness Act.

On November 25, 2025, the Court denied DraftKings’ motion to dismiss the First Amended Complaint.

On December 23, 2025, DraftKings filed a motion to certify an interlocutory appeal pursuant to 28 U.S.C.

§ 1292(b) on the issue of whether a mobile app, or its specific features (e.g., the app interface), can be a “product” for purposes of Illinois product liability law.

The motion to certify remains pending.

The Company intends to vigorously defend this case.

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Clara De Leon and Eric Mirsberger Jr.

On January 22, 2025, Plaintiffs Clara De Leon and Eric Mirsberger Jr., individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

On January 22, 2025, plaintiffs Clara De Leon and Eric Mirsberger Jr., individually and on behalf of all others similarly situated, filed a purported class action complaint (the “Original Complaint”) against DraftKings Inc.

and Crown NY Gaming Inc.

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Plaintiffs also seek a declaration that DraftKings has breached agreements with Apple and Google relating to their respective app stores.

The action has not yet been served on DraftKings.

On April 8, 2025, DraftKings filed a motion to dismiss.

On April 9, 2025, the court ordered plaintiffs to file an amended complaint, if any, and on May 16, 2025, plaintiffs filed an amended putative class action complaint on behalf of Clara De Leon, Eric Mirsberger Jr., Joseph Mitchell, and Edward Mendez (the “First Amended Complaint”).

In addition to the claims and theories set forth in the Original Complaint, the First Amended Complaint asserts additional causes of action, including alleged breaches of fiduciary duty and product liability claims based on theories of design defect and failure to warn.

On June 20, 2025,

DraftKings filed a motion to dismiss.

The Court granted the motion to dismiss on December 11, 2025, and entered judgment on February 2, 2026.

The Company intends to vigorously defend this case.

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On February 10, 2025, Winview IP Holdings, LLC (“Winview IP”) filed suit against DraftKings Inc., a Nevada corporation, DK Crown Holdings Inc., Crown Gaming Inc., SBTech US Inc., and SBTech (Global) Ltd.

District Court for the District of New Jersey.

in the United States District Court for the District of New Jersey.

In the complaint, Winview IP alleges that the Defendants infringe nine patents:

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and the ’349 Patent are directed to DK Sportsbook, DK Horse, and DK Casino.

On August 18, 2025, DraftKings filed its motion to dismiss WinView’s direct infringement claims of the ’883 patent, all claims against DK Casino and DK Horse, as well as WinView’s claims for willful, induced, and contributory infringement for all nine patents-in-suit.

On January 16, 2026, DraftKings filed petitions for inter partes review (“IPR”) with the PTAB challenging the validity of the ’883 Patent and the ’189 Patent.

On January 20, 2026, DraftKings informed the District Court of the filing of the IPR petitions, and on January 21, 2026, the Court entered an order staying DraftKings’ motion to dismiss pending the final resolution of the IPRs through final written decision of the PTAB.

We intend to vigorously defend this case.

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Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

DC Gambling Recovery LLC v.

Caesars et al.

On February 28, 2025, DC Gambling Recovery LLC filed a lawsuit against DraftKings, Caesars, FanDuel, BetMGM, and Fanatics in state court in the District of Columbia.

On April 4, 2025, the defendants removed the lawsuit to the United States District Court for the District of Columbia.

Plaintiff alleges that the Defendants violated the Statute of Anne (D.C.

Code § 16-1702), a statute which purportedly allows an individual to recover their betting losses greater than twenty-five dollars from each sportsbook, and should such party fail to sue within three months, the statute purportedly authorizes any person to file suit against the sportsbook to recover the losses (including treble damages).

Plaintiff also alleges that the U.S.

Supreme Court’s 2018 decision striking down the Professional and Amateur Sports Protection Act (“PASPA”) does not apply to the District of Columbia and, therefore, the Sports Wagering Lottery Amendment Act (“SWLAA”), a 2019 law that legalized sports betting in the District of Columbia, is without any legal force or effect.

Plaintiff also alleges that the Statute of Anne permits recovery of betting losses greater than twenty-five dollars even if the SWLAA has legal force or effect.

Plaintiff seeks to recover on behalf of all individuals within the District of Columbia that (i) have lost more than $25 at any single time or sitting by sports betting with DraftKings and (ii) not sued to recover those losses within three months of payment to DraftKings.

On May 5, 2025, DraftKings filed a motion to dismiss the complaint, which motion remains pending.

On May 14, 2025, the court granted the District of Columbia’s motion to intervene.

On June 16, 2025, plaintiff filed its opposition to Defendants’ motions to dismiss;

on June 23, 2025, the District of Columbia filed a brief in support of Defendants motion to dismiss;

on July 7, 2025, DraftKings filed its reply in support of its motion to dismiss and plaintiff filed its response to the District of Columbia’s brief;

and on July 14, 2025, the District of Columbia filed its reply.

On September 24, 2025, the District of Columbia notified the court that the D.C.

Council had amended D.C.

Code § 16-1702 to clarify that it does not apply to sports betting authorized under the SWLAA, and that the amendment would become permanent after review by Congress.

On September 29, 2025, plaintiff filed a response arguing that the amendment violated PASPA.

The court heard argument on the motions to dismiss on January 9, 2026, and the motion remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

City of Baltimore

On April 3, 2025, the City of Baltimore filed a lawsuit against DraftKings and FanDuel seeking civil penalties and injunctive relief under Baltimore City Code Art.

2, Section 4.

The City alleges that DraftKings violated Baltimore City Code Art.

2, section 4 by committing unfair, abusive and deceptive trade practices by allegedly (i) using data to allegedly target vulnerable Baltimore users;

(ii) using misleading promotions such as “bonus bets” or “no-sweat bets;” (iii) concealing or misrepresenting the terms and conditions of those promotions;

(iv) using data to identify Baltimore users with an alleged gaming disorder and then directing promotions at them;

(v) directing messages with misleading urgency to those who allegedly may have gaming disorders;

(vi) using the VIP program to allegedly exploit people with alleged gaming disorders;

(vii) offering escalating rewards through its VIP program to target alleged users with gaming disorders;

and (viii) failing to implement responsible gaming measures.

The City of Baltimore seeks injunctive relief and statutory penalties for each violation of Baltimore City Code Art.

2, section 4.

On May 7, 2025, the defendants removed the lawsuit from state court to the United States District Court for the District of Maryland (Northern Division).

On June 6, 2025, the City filed a motion to remand the case to state court.

On November 10, 2025, the Court granted the plaintiff’s motion to remand.

On November 12, 2025, Defendants filed a notice of appeal of the remand order, and on November 13, 2025, the state court stayed and administratively closed the case, subject to reopening once the appeal has been adjudicated.

On January 28, 2026, the defendants filed their opening appellate brief.

The appeal remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On April 18, 2025, plaintiffs Kenneth Macek, Matthew Harner, Avi Setton, Lionel Alicea, and Robert Walker, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc., Crown PA Gaming Inc.

dba DraftKings, and Golden Nugget Online Gaming LLC in the United States District Court, Eastern District of Pennsylvania.

Among other things, plaintiffs allege that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered new customers an opportunity to earn up to 1,000 site credits as a sportsbook deposit match, as well as promotions that offered site credits in connection with a casino deposit match, were unfair, unconscionable, and misleading (collectively, the “Promotions Claims”).

Plaintiffs also allege that DraftKings targets players with gaming addiction issues, including by assigning certain players with VIP hosts.

Plaintiffs assert causes of action for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, negligence, intentional misrepresentation, failure to warn, fraudulent inducement, unjust enrichment, intentional infliction of emotional distress and conversion.

Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class relating to the Promotions Claims, of:

(i) anyone who participated in the casino deposit match promotion and lost part or all of their initial deposit (with a Pennsylvania subclass);

(ii) anyone who allegedly opted into the “risk free” or “no sweat” promotion (with a Pennsylvania subclass);

and (iii) anyone who allegedly deposited money in response to the 1,000 new customer sportsbook deposit match promotion (with a Pennsylvania subclass).

Plaintiffs also seek to certify a class relating to alleged addiction claims, of (i) anyone who developed or displayed problem gaming behavior and was allegedly targeted by DraftKings’ VIP hosts or promotions or otherwise induced to game or continue to game (with a Pennsylvania subclass);

and (ii) anyone who was allegedly permitted to continue gaming after self-excluding or who asked DraftKings to suspend or close their account (with a Pennsylvania subclass).

On June 24, 2025, Defendants filed a motion to dismiss.

In response, on July 15, 2025, plaintiffs filed a first amended complaint (the “First Amended Complaint”), removing plaintiff Walker and adding new plaintiffs Shane Spencer and Rangaraj Sadagopan.

The First Amended Complaint removed all of the allegations, purported classes, and causes of actions relating to the Promotions Claims.

The First Amended Complaint only alleges claims and causes of action relating to alleged addiction matters, as follows:

negligence, breach of fiduciary duty, unjust enrichment, intentional infliction of emotional distress, and strict and negligent products liability.

The First Amended Complaint also contains individual claims for breach of contract and conversion based on the closure of plaintiff Setton’s account.

In the First Amended Complaint, plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class of (i) anyone who developed or displayed problem gaming behavior and was allegedly targeted by DraftKings’ VIP hosts or otherwise induced to game or continue to game (with a Pennsylvania subclass);

(ii) anyone who was allegedly permitted to continue gaming after asking DraftKings to suspend or close their account (with a Pennsylvania subclass);

and (iii) anyone who was exposed to the allegedly dangerous design of features of DraftKings’ app and could not control their compulsive gaming (with a Pennsylvania subclass).

On July 29, 2025, DraftKings filed a motion to dismiss.

On August 12, 2025, plaintiffs filed their response, and on August 19, 2025, DraftKings filed its reply.

The motion remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On July 15, 2025 plaintiffs Kenneth Macek, Matthew Harner, Avi Setton, Lionel Alicea, and Robert Walker, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc., Crown PA Gaming Inc.

dba DraftKings, and Golden Nugget Online Gaming LLC in the United States District Court, Eastern District of Pennsylvania.

Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class of (i) anyone who participated in DraftKings or Golden Nugget’s casino deposit match promotion and lost part or all of their initial deposit (with a Pennsylvania subclass);

(ii) anyone who allegedly opted into DraftKings’ “risk free” or “no sweat” promotion and lost their bet (with a Pennsylvania subclass);

and (iii) anyone who allegedly deposited money in response to DraftKings’ $1,000 new customer sportsbook deposit match promotion (with a Pennsylvania subclass).

Plaintiffs bring consumer protection, fraud, and unjust enrichment claims.

On September 16, 2025, DraftKings filed its motion to dismiss.

On September 30, 2025, plaintiffs filed their response, in which they withdrew two of their three fraud claims and their request for injunctive relief.

On October 7, 2025, DraftKings filed its reply.

The motion to dismiss remains pending.

Also on September 16, 2025, DraftKings filed a motion to consolidate Macek I and Macek II for all purposes.

On September 23, 2025, plaintiffs filed their response, and on September 30, 2025, DraftKings filed its reply.

The motion to consolidate also remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Moore (now Zhen v.

DraftKings Inc.)

On June 1, 2025, plaintiffs Brandon Moore, Zhicheng Zhen, and Jonathan Smith, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and Doe defendants in the United States District Court, Northern District of California.

Among other things, plaintiffs allege that DraftKings has been operating illegal online gambling platforms in California through its “Daily Fantasy Sports” and “Pick6” contests in violation of California law.

Plaintiffs claim that these contests amount to unlawful lotteries, games of chance, or sports betting and that DraftKings falsely represents these services as lawful in California, including through misleading public statements and platform disclosures.

Plaintiffs bring claims under California’s Unfair Competition Law and Consumer Legal Remedies Act, and seek, among other things, injunctive relief, restitution, disgorgement, and attorneys’ fees and costs.

Plaintiffs seek to represent a purported class of all California residents who allegedly placed a bet or wager on DraftKings’ alleged Daily Fantasy Sports and Pick6 gambling websites while physically located in California.

On July 11, 2025, plaintiffs filed a Notice Regarding Legal Opinion Issued By The California Attorney General enclosing an opinion from the California Attorney General (Opinion No.

23-1001) in which the California Attorney General opined that “California law prohibits the operation of daily fantasy sports games with players physically located within California.” On July 14, 2025, two other actions pending in the Northern District of California were referred sua sponte by the court to the Judge assigned to Moore for determination on whether such actions should be related under Civil Local Rule 3-12(e) (Beltran v.

FanDuel, Inc., Case No.

25-cv-5586-JSC;

Underdog Sports, LLC, Case No.

25-cv-5542-JST).

On July 16, the court referred sua sponte a third pending action for the same determination (Franks v.

Prize Picks, Case No.

25-cv-4916-JD).

On July 24, 2025, the court assigned to Moore held that those three actions were related to Moore and assigned all three cases to that court.

On August 1, 2025, plaintiff Moore voluntarily dismissed his case without prejudice;

and upon motion by the plaintiff, the Court ordered that the case is now entitled Zhen v.

On August 11, 2025, DraftKings filed its motion to dismiss, and on December 19, 2025, the court granted the motion to dismiss without prejudice.

On January 20, 2026, plaintiffs filed a First Amended Complaint that adds four new defendants:

Crown Gaming, Inc.

and three individuals (Jason Robins, Matthew Kalish, and Paul Liberman), in addition to DraftKings.

Plaintiffs’ First Amended Complaint asserts nine causes of action arising from DraftKings’ alleged operation and marketing of its Daily Fantasy Sports and Pick6 offerings to users located in California.

Plaintiffs bring claims under California’s Unfair Competition Law and the

Consumer Legal Remedies Act, and they added federal civil RICO claims under 18 U.S.C.

§§ 1962(c) and 1962(d) (with civil remedies under § 1964(c)) asserted both against the three individual defendants and separately against all defendants (DraftKings Inc., Crown Gaming, Inc., and those individuals).

Plaintiffs also assert a gambling-loss recovery claim based on Cal.

Code § 22.2 and the “Statute of Anne,” a claim under Cal.

Penal Code § 496 (receipt of stolen property), and a claim for declaratory relief (28 U.S.C.

Plaintiffs seek injunctive and declaratory relief, restitution and other equitable relief, and, as pleaded, damages.

DraftKings’ current deadline to respond to the First Amended Complaint is February 19, 2026, and the other defendants’ deadline to respond is March 30, 2026.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On May 9, 2025, Micro-Gaming Ventures, LLC (“Micro-Gaming”) filed suit against DraftKings Inc.

in the United States District Court for the District of New Jersey.

In the complaint, Micro-Gaming alleges that the Company infringes five patents:

8,545,311 (“the ’311 patent”), entitled “Systems and methods for enabling remote device users to wager on micro events of games in a data network accessible gaming environment”;

8,632,392 (“the ’392 patent”), entitled “Systems and methods for enabling remote device users to wager on micro events of games in a data network accessible gaming environment”;

8,734,231 (“the ’231 patent”), entitled “Systems and methods for enabling remote device users to wager on micro events of games in a data network accessible gaming environment”;

11,783,679 (“the ’679 patent”), entitled “Location-based wagering via remote devices”;

12,266,244 (“the ’244 patent”), entitled “Location-based wagering via remote devices” (collectively, the “Micro-Gaming Patents”).

The allegations for all of the Micro-Gaming Patents are directed to the “DraftKings Sportsbook.”

On August 8, 2025, the Company filed its motion to dismiss.

Micro-Gaming filed its brief in opposition to the motion to dismiss on September 2, 2025, and the Company filed its reply brief on September 15, 2025.

The motion remains pending.

We intend to vigorously defend this case.

In the event that a court ultimately determines that we are infringing the asserted patents, we may be subject to substantial damages, which may include treble damages and/or an injunction that could require us to modify certain features that we currently offer.

We cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

We also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Other Litigation

3 unchanged sentences

The Company is currently under Internal Revenue Service audit for prior tax years, with the primary unresolved issues relating to excise taxation of fantasy sports contests and informational reporting and withholding.

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

Certain examinations have progressed further in the administrative process.

The Company continues to dispute the assessments and is actively pursuing administrative remedies and intends to vigorously defend its positions.

The Company is unable to predict the outcome of these proceedings at this time and cannot reasonably estimate the potential loss or range of loss, if any.

The final resolution of these

audits, and any related proceedings, may differ from the amounts recorded in these consolidated financial statements and may materially affect the Company’s results of operations in the period or periods in which that determination is made.

Exhibit Index

20 unchanged sentences

Specimen Class A Common Stock Certificate of DraftKings (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 16, 2024).

Form of Warrant Certificate of DraftKings Inc.

(incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

Warrant Agreement, dated May 10, 2019, by and between Diamond Eagle Acquisition Corp.

and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of Diamond Eagle Acquisition Corp.’s Current Report on Form 8-K filed on May 14, 2019).

Assignment and Assumption Agreement, dated April 23, 2020, by and among DraftKings Inc., DEAC, Continental Stock Transfer & Trust Company, Computershare Trust Company, N.A.

and Computershare Inc.

(incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

Indenture, dated as of March 18, 2021, between the Company and Computershare Trust Company, N.A., as trustee (including Form of 0% Convertible Senior Notes due 2028) (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, filed with the SEC on March 18, 2021).

First Supplemental Indenture, dated as of May 5, 2022, between DraftKings Inc., Old DraftKings and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.6 of the Company's Current Report on Form 8-K, filed with the SEC on May 5, 2022).

Description of DraftKings Inc.'s Capital Stock .

Assignment and Assumption Agreement, dated May 5, 2022, by and among DraftKings Inc., GNOG, Continental and Computershare (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K, filed with the SEC on May 5, 2022).

Assignment and Assumption Agreement, dated May 5, 2022, by and among DraftKings Inc., Old DraftKings and Computershare (incorporated by reference to Exhibit 4.5 of the Company’s Current Report on Form 8-K, filed with the SEC on May 5, 2022).

Warrant Agreement, dated as of May 6, 2019, by and between Landcadia Holdings II, Inc.

and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 of Golden Nugget Online Gaming, Inc.’s Current Report on Form 8-K, filed with the SEC on May 9, 2019).

Description of DraftKings Inc.'s Capital Stock (incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 14, 2025).

DraftKings Inc.

5 unchanged sentences

and Matt Kalish (incorporated by reference to Exhibit 10.2 the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

Transition Agreement, dated as of November 6, 2025, by and between DraftKings Inc.

and Matthew Kalish (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 7, 2025).

Executive Employment Agreement, dated April 23, 2020, between DraftKings Inc.

2 unchanged sentences

and Jason Robins (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

Amended and Restated DraftKings Inc.

Employee Stock Purchase Plan, Effective October 25, 2024.

DraftKings Inc.

Employee Stock Purchase Plan, Amended and Restated February 11, 2025 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on May 23, 2025).

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on May 5, 2022).

Earnout Escrow Agreement, dated April 23, 2020, by and among DraftKings Inc., Shalom Meckenzie, in his capacity as SBT Sellers’ Representative, Eagle Equity Partners LLC, Jeff Sagansky, Eli Baker, Harry Sloan, I.B.I.

Trust Management, the trustee, and Computershare Trust Company, N.A., as escrow agent (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

First Amendment, dated as of March 4, 2025, to the Credit Agreement, dated as of November 7, 2024, among DraftKings Inc., DK Crown Holdings Inc., Golden Nugget Online Gaming, Inc., JackPocket LLC, the Lenders and Issuing Banks party thereto and Morgan Stanley Senior Funding, Inc., as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on March 4, 2025).

Stockholders Agreement, dated April 23, 2020, by and among DraftKings Inc., the DK Stockholder Group, the SBT Stockholder Group and the DEAC Stockholder Group (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

2 unchanged sentences

(incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2020).

Agreement for the Provision of a Sports Betting Solution (“License Agreement”), between Sports Information Services Limited and Crown Gaming Inc., dated as of June 19, 2018 (incorporated by reference to Exhibit 10.5 of DEAC NV Merger Corp.’s Registration Statement on Form S-4 (Reg.

333-235805), filed with the SEC on April 14, 2020).

Addendum to License Agreement, between Sports Information Services Limited and Crown Gaming Inc., dated as of August 22, 2019 (incorporated by reference to Exhibit 10.6 of DEAC NV Merger Corp.’s Registration Statement on Form S-4 (Reg.

333-235805), filed with the SEC on April 14, 2020).

Addendum, dated as of July 23, 2020 to the Agreement for the Provision of a Sports Betting Solution between Sports Information Services Limited and Crown Gaming Inc., dated as of June 19, 2018 (incorporated by reference to Exhibit 10.1 to DraftKings Inc.’s Current Report on Form 8-K (File No.

001-38908), filed with the SEC on July 23, 2020).

DraftKings Inc.

7 unchanged sentences

Stanton Dodge (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q, filed with the SEC on August 6, 2021).

Amended and Restated Executive Employment Agreement, dated August 5, 2021, between DraftKings Inc.

and Jason Park (incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q, filed with the SEC on August 6, 2021).

Support Agreement, by and among DraftKings Inc., Tilman J.

2 unchanged sentences

and Alan Ellingson (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on March 18, 2024).

Letter Agreement, dated as of July 31, 2024, by and between DraftKings Inc.

and Jason Park (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 2, 2024).

Letter Agreement, dated as of February 11, 2025, by and between DraftKings Inc.

and Jason Robins

Letter Agreement, dated as of February 11, 2025, by and between DraftKings Inc.

and Matthew Kalish

Letter Agreement, dated as of February 11, 2025, by and between DraftKings Inc.

and Paul Liberman

Credit Agreement, dated as of November 7, 2024, among DraftKings Inc., as Parent and a Borrower, DK Crown Holdings Inc., Golden Nugget Online Gaming, Inc., Jackpocket LLC, as Borrowers, the Lenders and Issuing Banks party thereto and Morgan Stanley Senior Funding, Inc.

as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 8, 2024).

Code of Business Ethics of the Company, dated April 23, 2020 (incorporated by reference to Exhibit 14.1 of the Company's Amended Annual Report on Form 10-K/A, filed with the SEC on May 3, 2021).

1 unchanged sentence

Insider Trading Policy.

(incorporated by reference to Exhibit 19.1 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 14, 2025).

List of Subsidiaries.

54 unchanged sentences

Walden Director February 13, 2026

/s/ Gregory W.

Wendt Director February 13, 2026

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 9A. Controls and Procedures