What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-08 compared with 2025-11-07 · 333 added, 472 removed, 804 unchanged (50% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value)

September 30, 2025

March 31, 2026

(Unaudited) December 31, 2025

3 unchanged sentences

Cash reserved for users 378,670 469,449

Receivables reserved for users 55,917 62,542

Accounts receivable 86,119 105,577

18 unchanged sentences

Operating lease liabilities 71,597 44,391

Warrant liabilities 7,367 22,033

Long-term income tax liabilities 92,903 91,618

4 unchanged sentences

Class A common stock, $ 0.0001 par value;

900,000 shares authorized as of September 30, 2025 and December 31, 2024;

523,310 and 504,722 shares issued and 496,503 and 489,071 outstanding as of September 30, 2025 and December 31, 2024, respectively

900,000 shares authorized as of March 31, 2026 and December 31, 2025;

538,297 and 533,296 shares issued and 495,764 and 495,053 outstanding as of March 31, 2026 and December 31, 2025, respectively

Class B common stock, $ 0.0001 par value;

900,000 shares authorized as of September 30, 2025 and December 31, 2024;

393,014 shares issued and outstanding as of September 30, 2025 and December 31, 2024

900,000 shares authorized as of March 31, 2026 and December 31, 2025;

393,014 shares issued and outstanding as of March 31, 2026 and December 31, 2025

Treasury stock, at cost;

26,807 and 15,651 shares as of September 30, 2025 and December 31, 2024, respectively

42,533 and 38,243 shares as of March 31, 2026 and December 31, 2025, respectively

( 1,515,376 ) ( 1,392,433 )

8 unchanged sentences

(Amounts in thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Revenue $ 1,646,076 $ 1,408,806

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Earnings (loss) per share attributable to common stockholders:

Basic and diluted $ ( 0.52 ) $ ( 0.60 ) $ ( 0.27 ) $ ( 0.78 )

Basic $ 0.04 $ ( 0.07 )

Diluted $ 0.03 $ ( 0.07 )

See accompanying notes to unaudited condensed consolidated financial statements.

11 unchanged sentences

Stock-based compensation — — — — 72,144 — — — 72,144

Exercise of warrants 182 — — — 8,973 — — — 8,973

Purchase of treasury stock for RSU withholding ( 1,002 ) — — — — — — ( 24,303 ) ( 24,303 )

3 unchanged sentences

Balances at March 31, 2026 495,764 $ 53 393,014 $ 39 $ 8,500,292 $ ( 6,416,448 ) $ 36,488 $ ( 1,515,376 ) $ 605,048

Exercise of stock options 736 — — — 2,908 — — — 2,908

Stock-based compensation — — — — 89,792 — — — 89,792

Exercise of warrants 74 — — — 2,212 — — — 2,212

Purchase of treasury stock for RSU withholding ( 780 ) — — — — — — ( 27,534 ) ( 27,534 )

Shares issued under Employee Stock Purchase Plan 218 — — — 6,900 — — — 6,900

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

Restricted stock unit vesting 2,226 — — — — — — — —

Purchase of treasury stock under Stock Repurchase Program ( 2,872 ) — — — — — — ( 100,463 ) ( 100,463 )

Net income (loss) — — — — — 157,936 — — 157,936

Balances at June 30, 2025 496,051 $ 48 393,014 $ 39 $ 8,197,948 $ ( 6,317,156 ) $ 36,488 $ ( 907,739 ) $ 1,009,628

Exercise of stock options 786 — — — 2,927 — — — 2,927

Stock-based compensation — — — — 76,754 — — — 76,754

Exercise of warrants 72 — — — 2,605 — — — 2,605

Purchase of treasury stock for RSU withholding ( 681 ) — — — — — — ( 31,628 ) ( 31,628 )

Restricted stock unit vesting 1,915 — — — — — — — —

Purchase of treasury stock under Stock Repurchase Program ( 1,640 ) — — — — — — ( 71,212 ) ( 71,212 )

Net income (loss) — — — — — ( 256,788 ) — — ( 256,788 )

Balances at September 30, 2025 496,503 $ 48 393,014 $ 39 $ 8,280,234 $ ( 6,573,944 ) $ 36,488 $ ( 1,010,579 ) $ 732,286

See accompanying notes to unaudited condensed consolidated financial statements.

DRAFTKINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands)

Class A Common Stock Class B Common Stock Additional

10 unchanged sentences

Restricted stock unit vesting 11,001 — — — — — — — —

Net income (loss) — — — — — ( 142,568 ) — — ( 142,568 )

Balances at March 31, 2024 476,067 $ 46 393,014 $ 39 $ 7,316,598 $ ( 6,076,511 ) $ 36,488 $ ( 445,681 ) $ 830,979

Exercise of stock options 257 — — — 2,586 — — — 2,586

Stock-based compensation — — — — 93,681 — — — 93,681

Exercise of warrants 6 — — — 217 — — — 217

Purchase of treasury stock for RSU withholding ( 631 ) — — — — — — ( 24,413 ) ( 24,413 )

Restricted stock unit vesting 1,970 — — — — — — — —

Shares issued in connection with business combinations 7,757 1 — — 331,556 — — — 331,557

Net income (loss) — — — — — 63,822 — — 63,822

Balances at June 30, 2024 485,426 $ 47 393,014 $ 39 $ 7,744,638 $ ( 6,012,689 ) $ 36,488 $ ( 470,094 ) $ 1,298,429

Exercise of stock options 529 — — — 1,355 — — — 1,355

Stock-based compensation — — — — 90,260 — — — 90,260

Exercise of warrants 1 — — — 18 — — — 18

Purchase of treasury stock for RSU withholding ( 598 ) — — — — — — ( 20,258 ) ( 20,258 )

Restricted stock unit vesting 1,811 — — — — — — — —

Purchase of treasury stock under Stock Repurchase Program ( 3,664 ) — — — — — — ( 142,278 ) ( 142,278 )

Net income (loss) — — — — — ( 33,864 ) — — ( 33,864 )

Balances at September 30, 2024 487,169 $ 47 393,014 $ 39 $ 7,836,271 $ ( 6,306,377 ) $ 36,488 $ ( 490,352 ) $ 1,076,116

Balances at March 31, 2025 496,339 $ 48 393,014 $ 39 $ 8,091,174 $ ( 6,475,092 ) $ 36,488 $ ( 779,742 ) $ 872,915

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities:

6 unchanged sentences

(Gain) loss from equity method investment ( 4,517 ) 45

Loss on sale of Vegas Sports Information Network, LLC — 5,817

Deferred income taxes ( 215 ) 826

1 unchanged sentence

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

Receivables reserved for users 6,625 ( 30,955 )

Accounts receivable 19,458 ( 8,738 )

10 unchanged sentences

Cash paid for gaming market access and licenses ( 1,060 ) ( 1,629 )

Cash paid for acquisitions, net of cash acquired — ( 392,501 )

Other investing activities ( 2,995 ) ( 3,495 )

6 unchanged sentences

Proceeds from exercise of stock options 3,315 3,396

Proceeds from shares issued under Employee Stock Purchase Plan 6,900 —

Other financing activities — ( 2,093 )

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Supplemental Disclosure of Noncash Investing and Financing Activities:

Investing activities included in accounts payable and accrued expenses $ 2,959 $ 1,788

Equity consideration issued in connection with acquisitions $ — $ 331,557

Decrease of warrant liabilities from cashless exercise of warrants $ — $ 8,973

Shares issued for contingent consideration $ 4,962 $ —

Stock-based compensation capitalized to internally developed software costs 7,087 6,184

2 unchanged sentences

Cash paid for interest 8,224 3,139

Cash paid for income taxes, net of refunds 412 1,850

See accompanying notes to unaudited condensed consolidated financial statements.

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Description of Business

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.

In May 2018, the U.S.

Supreme 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.

As of September 30, 2025, 39 U.S.

We are a digital sports and gaming company.

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

As of March 31, 2026, 39 U.S.

states, the District of Columbia and Puerto Rico have some form of authorized sports betting.

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 September 30, 2025, the U.S.

All 33 jurisdictions are live, and DraftKings operates in 29 of them.

As of March 31, 2026, the U.S.

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

As of September 30, 2025, 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.

As of September 30, 2025, we operate our iGaming product offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

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

As of March 31, 2026, we operate our Sportsbook offering in Arizona, Arkansas, 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, Puerto Rico 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 March 31, 2026, we offer our iGaming offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

We also have 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.

Summary of Significant Accounting Policies and Practices

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Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

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.

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.

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement–Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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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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.

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

ASU 2025-06 changes the accounting for internal-use software under Accounting Standards Codification (“ASC”) 350-40.

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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.

We are currently evaluating the impact of this standard and do not expect this standard to have a material impact 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 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 and do not expect this standard to have a material impact 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 and do not expect this standard to have a material impact on our consolidated financial statements.

Business Combinations

Acquisition of Jackpocket Inc.

( “ Jackpocket ” )

On February 11, 2024, the Company entered into a definitive agreement (the “Jackpocket Merger Agreement”) to acquire Jackpocket, which is a digital lottery courier app in the United States (the “Jackpocket Transaction”).

On May 22, 2024 (the “Jackpocket Closing Date”), DraftKings consummated the Jackpocket Transaction, and, under the terms of the Jackpocket Merger Agreement and subject to certain exclusions contained therein, Jackpocket stockholders received approximately $ 452.3 million of cash consideration and approximately $ 320.8 million of equity consideration.

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

digital lottery courier business with expected ancillary benefits to our 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 unaudited condensed consolidated statements of operations, including for the three and nine months ended September 30, 2025.

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.

The following is a summary of the consideration issued or paid on the Jackpocket Closing Date:

Cash consideration $ 452,322

Equity consideration (1)

Total consideration $ 773,105

(1) Includes the issuance of approximately 7.5 million shares of DraftKings Inc.’s Class A common stock issued at $ 41.90 per share and $ 6.2 million of options exercisable for shares of DraftKings Inc.

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

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

Cash reserved for users 23,349

Receivables reserved for users 9,092

Prepaid expenses and other current assets 4,151

Property and equipment 1,523

Intangible assets 269,736

Operating lease right-of-use assets 2,579

Deposits and other non-current assets 136

Total identifiable assets acquired 356,565

Liabilities assumed:

Accounts payable and accrued expenses 33,961

Liabilities to users 16,877

Operating lease liabilities 2,580

Other long-term liabilities 80,463

Total liabilities assumed 133,881

Net assets acquired (a) 222,684

Purchase consideration (b) 773,105

Goodwill (b) – (a) $ 550,421

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

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

Intangible Assets

Fair Value Weighted-

Customer Relationships $ 174,000 8.0 years

Developed Technology 67,000 5.0 years

Trade Name 27,000 7.0 years

Market Access 1,736 2.9 years

Total $ 269,736

Intangible assets consist of customer relationships, developed technology, trade name and market access.

We used variations of income approaches with estimates and assumptions developed by us to determine the fair values of customer relationships, developed technology, and trade name.

We valued customer relationships by using the multi-period excess earnings method which requires the use of significant estimates and assumptions, including revenue growth rates, attrition rates, operating margin and discount rates.

For developed technology and trade name, we used the relief from royalty method including the use of significant estimates and assumptions including royalty rates and discount rates.

For market access, cost approximated fair value.

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 three and nine months ended September 30, 2024, the Company incurred nil and $ 15.3 million, respectively, in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, which were included in general and administrative expenses.

There were no such costs incurred for the three and nine months ended September 30, 2025.

Acquisition of Simplebet, Inc.

(“Simplebet”)

On August 28, 2024, the Company entered into a definitive agreement (the “Simplebet Merger Agreement”) to acquire Simplebet, which is a leading sports betting provider of in-play micromarket content and pricing (the “Simplebet Transaction”).

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, approximately $ 45.1 million of equity consideration and additional equity contingent consideration.

The present value of the equity 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 unaudited condensed consolidated balance sheets.

Operating results for Simplebet on and after the Simplebet Closing Date are included in the Company’s unaudited condensed consolidated statements of operations, including for the three and nine months ended September 30, 2025.

Preliminary 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.

The following is a summary of the consideration issued or paid on the Simplebet Closing Date:

2025 Business Combinations

Acquisition of Railbird Technologies Inc.

On October 21, 2025 (the “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 for the Company’s entrance into 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 condensed consolidated statements of operations for the three months ended March 31, 2026.

The amount of revenue and earnings attributable to the Railbird business from the Railbird Acquisition Date through March 31, 2026, which is included within revenue and loss attributable to common stockholders in the Company’s condensed 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

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(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) 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 6 – 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.

(2) The Company recorded a fair value estimate of the contingent consideration, as disclosed in “Note 6 – Fair Value Measurements”.

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 Simplebet Transaction on the Simplebet Closing Date.

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:

Assets acquired:

Cash and cash equivalents $ 181

Accounts receivable 931

Prepaid expenses and other current assets 282

Operating lease right-of-use assets 144

Property and equipment 32

Restricted cash 1,734

Intangible assets 58,090

Deposits and other non-current assets 6

Total identifiable assets acquired 60,011

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Accounts payable and accrued expenses 52

Operating lease liabilities 144

Other long-term liabilities 15,365

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Net assets acquired (a) 44,594

Estimated purchase consideration (b) 134,645

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

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.

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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.

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.

The Company recorded intangible assets related to developed technology of $ 62.1 million that will be amortized over six years .

We valued developed technology by using the multi-period excess earnings method.

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

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Transaction Costs

For the three and nine months ended September 30, 2024, the Company incurred $ 2.7 million of advisory, legal, accounting and management fees in connection with the Simplebet Transaction.

There were no such costs incurred for the three and nine months ended September 30, 2025.

Other 2024 Acquisitions

During the year ended December 31, 2024, the Company acquired 100 % of the equity interest of Sports IQ Analytics Inc.

(“SIQ”) and Dijon Systems Limited (“Dijon”).

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 in the aggregate for both acquisitions, subject to the achievement of certain performance targets, with a fair value estimate on each date of acquisition of $ 24.4 million included in other current liabilities and other long term liabilities.

The Company recorded goodwill of $ 35.2 million, of which none will be

deductible for tax purposes.

In addition, the Company recorded intangible assets of $ 34.9 million that will be amortized over seven years as well as deferred tax liability of $ 7.7 million, in relation to these acquisitions.

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.

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 were included in general and administrative expenses on the Company’s consolidated statements of operations.

We did not incur any such costs in the three months ended March 31, 2026 or March 31, 2025.

Intangible Assets

As of September 30, 2025, intangible assets, net consists of the following:

As of March 31, 2026, intangible assets, net consists of the following:

Weighted-Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net

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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

Total $ 1,736,867 $ ( 847,666 ) $ 889,201

Amortization expense was $ 60.6 million and $ 187.1 million for the three and nine months ended September 30, 2025, respectively, and $ 84.6 million and $ 188.2 million for the three and nine months ended September 30, 2024, respectively.

Amortization expense was $ 66.7 million and $ 65.7 million for the three months ended March 31, 2026 and 2025, respectively.

Current and Long-term Liabilities

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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 September 30, 2025, the Credit Agreement provided a Revolving Credit Facility of up to $ 500.0 million, and there was no

principal outstanding thereunder.

As of September 30, 2025, $ 10.0 million in letters of credit were issued under the Revolving Credit Facility, with $ 490.0 million available for borrowing.

As of March 31, 2026, the Credit Agreement provided a Revolving Credit Facility of up to $ 500.0 million, and there was no principal outstanding thereunder.

As of March 31, 2026, $ 11.9 million in letters of credit were issued under the Revolving Credit Facility, with $ 488.1 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 addition, 1.00 % of the aggregate outstanding principal amount of the Term B Loan 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 $ 0.5 million and $ 1.2 million for the three and nine months ended September 30, 2025, respectively, which is included in Interest income (expense), net on the Company’s condensed consolidated statements of operations.

The amortization of debt issuance costs was $ 0.5 million and $ 0.1 million for the three months ended March 31, 2026 and 2025, respectively, which is included in Interest income (expense), net on the Company’s condensed consolidated statements of operations.

The Term B Loan under the Term B Facility bears interest at the Company’s election at either (x) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75 % per annum, or (y) 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 (x) and (y) as defined in the Credit Agreement).

As of September 30, 2025, the aggregate principal amount of Term B Loan outstanding was $ 597.0 million.

As of September 30, 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 1 fair value measurement.

As of March 31, 2026, the aggregate principal amount of Term B Loan outstanding was $ 594.0 million which bore interest at a weighted-average rate of 5.42 % per annum.

As of March 31, 2026, the fair value of the Term B Loan approximates the carrying value, which was calculated using quoted market prices for similar debt instruments and other observable market inputs, 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 September 30, 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.

As of March 31, 2026, 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 Transactions

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In connection with the issuance of the Convertible Notes, Old DraftKings incurred $ 17.0 million of lender fees and $ 1.7 million of debt financing costs, which are being amortized through the Notes Maturity Date.

The amortization of debt issuance costs was $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2025, respectively, and $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2024, respectively, which is included in Interest income (expense), net on the Company ’ s condensed consolidated statements of operations.

The amortization of debt issuance costs was $ 0.7 million and $ 0.7 million for the three months ended March 31, 2026 and 2025, respectively, which is included in Interest income (expense), net on the Company’s condensed consolidated statements of operations.

The Convertible Notes represent senior unsecured obligations of Old DraftKings, which are being amortized through the Notes Maturity Date.

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Old DraftKings will satisfy any conversion election by paying or delivering, as the case may be, cash, shares of DraftKings Inc.’s Class A common stock or a combination of cash and shares of DraftKings Inc.’s Class A common stock.

As of September 30, 2025, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

As of March 31, 2026, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

In connection with the pricing of the Convertible Notes and the exercise of the over-allotment option to purchase additional notes, Old DraftKings entered into a privately negotiated capped call transaction (“Capped Call Transactions”).

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The Capped Call Transactions have an initial cap price of $ 135.50 per share, subject to certain adjustments.

The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of Convertible Notes.

The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s

Class A common stock upon any conversion of Convertible Notes.

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 condensed consolidated balance sheets.

As of September 30, 2025, the Company’s convertible debt balance was $ 1,258.4 million, net of unamortized debt issuance costs of $ 6.6 million.

Although recorded at amortized cost on the Company’s condensed consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,137.5 million and $ 1,076.9 million as of September 30, 2025 and December 31, 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 September 30, 2025, the future principal payments for the Term B Loan and Convertible Notes were as follows:

As of March 31, 2026, the Company’s convertible debt balance was $ 1,259.8 million, net of unamortized debt issuance costs of $ 5.2 million.

Although recorded at amortized cost on the Company’s condensed consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,140.1 million and $ 1,158.7 million as of March 31, 2026 and December 31, 2025, 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 March 31, 2026, the future principal payments for the Term B Loan and Convertible Notes were as follows:

Years Ending December 31,

October 1, 2025 to December 31, 2025 $ 1,493

April 1, 2026 to December 31, 2026 $ 4,444

2028 1,270,815

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Indirect Taxes

Taxation of e-commerce is becoming more prevalent and could negatively affect the Company’s business as it primarily pertains to DFS and its contestants.

Taxation of e-commerce is becoming more prevalent and could negatively affect the Company’s business as it primarily pertains to Fantasy and its contestants.

The ultimate impact of indirect taxes on the Company’s business is uncertain, as is the period required to resolve this uncertainty.

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The Company’s activities by jurisdiction may vary from period to period, which could result in differences in the applicability of indirect taxes from period to period.

As of September 30, 2025 and December 31, 2024, the Company’s estimated contingent liability for indirect taxes was $ 91.3 million and $ 84.7 million, respectively.

As of March 31, 2026 and December 31, 2025, the Company’s estimated contingent liability for indirect taxes was $ 92.1 million and $ 90.1 million, respectively.

The estimated contingent liability for indirect taxes is recorded within other long-term liabilities on the condensed consolidated balance sheets and general and administrative expenses on the condensed consolidated statements of operations.

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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”), each of which entitled 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 September 30, 2025, there were no Public Warrants or Private Warrants outstanding.

On April 23, 2025, the Private Warrants expired per the terms of the agreement.

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, pursuant to a definitive agreement and plan of merger, dated August 9, 2021, in an all-stock transaction (the “GNOG Transaction”).

On the GNOG Closing Date, in connection with the consummation of the GNOG Transaction, Old DraftKings entered into an assignment and assumption agreement (the “Old DraftKings Warrant Assignment Agreement”) with DraftKings Inc., Computershare Trust Company, N.A.

As of March 31, 2026, there were no Public Warrants or Private Warrants outstanding.

In connection with the acquisition of Golden Nugget Online Gaming, Inc.

(the “GNOG Transaction”), on May 5, 2022 (the “GNOG Closing Date”), Old DraftKings entered into an assignment and assumption agreement (the “Old DraftKings Warrant Assignment Agreement”) with DraftKings Inc., Computershare Trust Company, N.A.

and Computershare Inc.

(together, “Computershare”), pursuant to which Old DraftKings assigned to DraftKings Inc.

all of its rights, interests and obligations under the warrant agreement, dated as of May 10, 2019 (the “Old DraftKings Warrant Agreement”), by and between DEAC and Continental Stock Transfer & Trust Company, as warrant agent, as assumed by Old DraftKings and assigned to Computershare by that certain assignment and assumption agreement, dated as of April 23, 2020, governing Old DraftKings’ outstanding Private Warrants, on the terms and conditions set forth in the Old DraftKings Warrant Assignment Agreement.

forth in the Old DraftKings Warrant Assignment Agreement.

In connection with the consummation of the GNOG Transaction and pursuant to the Old DraftKings Warrant Assignment Agreement, each of the outstanding Private Warrants became exercisable for one share of DraftKings Inc.

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In addition, on the GNOG Closing Date, in connection with the consummation of the GNOG Transaction, the Company assumed an additional 5.9 million warrants, each of which entitled the holder to purchase one share of GNOG’s Class A common stock at an exercise price of $ 11.50 per share (the “GNOG Private Warrants”).

Effective as of the consummation of the GNOG Transaction, each of the outstanding GNOG Private Warrants became exercisable 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 September 30, 2025, there were 2.7 million GNOG Private Warrants outstanding, convertible into approximately 1.0 million shares of DraftKings Inc.

’ s Class A common stock.

The remaining GNOG Private Warrants were exercised in October 2025.

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

As of September 30, 2025, the fair value of the Company’s warrant liability was $ 7.4 million.

Due to fair value changes throughout the three months ended September 30, 2025 and 2024, the Company recorded a gain on the remeasurement of its warrant liabilities of $ 4.2 million and a nominal gain on the remeasurement of its warrant liabilities, respectively.

During the nine months ended September 30, 2025 and 2024, the Company recorded a gain on the remeasurement of its warrant liabilities of $ 0.9 million and a loss on the remeasurement of its warrant liabilities of $ 8.3 million, respectively.

During the three months ended September 30, 2025, no Private Warrants were exercised, as all such warrants had expired on April 23, 2025, and 0.2 million GNOG Private Warrants were exercised.

These exercises resulted in a reclassification to additional paid-in-capital in the amount of $ 2.6 million.

During the nine months ended September 30, 2025, 0.3 million Private Warrants and 0.2 million GNOG Private Warrants were exercised.

These exercises resulted in a reclassification to additional paid-in-capital in the amount of $ 13.8 million.

Effective as of the consummation of the GNOG Transaction, each of the outstanding GNOG Private Warrants became exercisable 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 March 31, 2026, there were no GNOG Private Warrants outstanding.

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

As of March 31, 2026 and 2025, the fair value of the Company’s warrant liability was zero and $ 10.6 million, respectively.

Due to fair value changes throughout the three months ended March 31, 2025, the Company recorded a gain on the remeasurement of its warrant liabilities of $ 2.5 million.

The Private Warrants expired on April 23, 2025, and all remaining GNOG Private Warrants were exercised during 2025.

During the three months ended March 31, 2025, 0.2 million Private Warrants were exercised resulting in a reclassification to additional paid-in-capital in the amount of $ 9.0 million, and no GNOG Private Warrants were exercised.

Fair Value Measurements

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• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of September 30, 2025 and December 31, 2024 based on the three-tier fair value hierarchy:

September 30, 2025

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of March 31, 2026 and December 31, 2025 based on the three-tier fair value hierarchy:

March 31, 2026

Level 1 Level 2 Level 3 Total

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Money market funds $ 185,852 $ — $ — $ 185,852

$ — $ — $ 281,729

Other non-current assets:

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Other current liabilities $ — $ — $ 10,875 (3)

Warrant liabilities — 7,367 (4)

Other long-term liabilities — — 39,901 (3)

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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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Other current liabilities $ — $ — $ 14,900 (3)

Warrant liabilities — 22,033 (4)

Other long-term liabilities — — 59,534 (3)

Total $ — $ — $ 74,434 $ 74,434

(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.

(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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The Company measures these derivative instruments to fair value using option pricing models and, accordingly, classifies these assets as Level 3.

There were no new Level 3 derivative instruments sold, purchased by or issued to the Company during the nine months ended September 30, 2025.

There were no new Level 3 derivative instruments sold, purchased by or issued to the Company during the three months ended March 31, 2026.

The table below includes a range and an average weighted by relative fair value of the significant unobservable inputs used to measure these Level 3 derivative instruments to fair value.

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

(4) The Company measures the 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 the GNOG Private Warrants include term, risk free rate and volatility.

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

(3) Represents the contingent consideration issuable to former Sports IQ Analytics Inc.

(“SIQ”), Dijon Systems Limited (“Dijon”), Simplebet, Inc.

(“Simplebet”) and Railbird equityholders in connection with the acquisition of SIQ, acquisition of Dijon, acquisition of Simplebet and the 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.

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

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

Balance at December 31, 2024 $ 77,965

Settlement of contingent consideration liabilities ( 3,300 )

Opening Balance $ 74,434 $ 77,965

Fair value adjustment to contingent consideration liabilities ( 23,657 ) —

Balance at September 30, 2025 $ 36,769

Payment of contingent consideration liabilities — ( 3,300 )

Balance at March 31 $ 50,777 $ 74,665

Revenue Recognition

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The deferred revenue balances were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Deferred revenue, beginning of the period $ 174,750 $ 166,463

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Deferred revenue primarily represents contract liabilities related to the Company’s obligation to transfer future value in relation to in period transactions in which the Company has received consideration.

These obligations are primarily related to incentive programs and wagered amounts associated with unsettled or pending outcomes that fluctuate based on volume of activity.

These obligations are primarily related to incentive programs and wagered amounts associated with unsettled or pending outcomes that fluctuate based on the volume of activity.

Such obligations are recognized as liabilities when awarded to users and are recognized as revenue when those liabilities are later resolved, often within the following period.

Revenue Disaggregation

We disaggregate revenue from contracts with customers by product vertical as we believe it best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Disaggregation of revenue for the three and nine months ended September 30, 2025 and 2024 is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

We disaggregate revenue from contracts with customers by Sportsbook, iGaming and Other as we believe it best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Disaggregation of revenue for the three months ended March 31, 2026 and 2025 is as follows:

Three Months Ended March 31,

Sportsbook $ 1,094,874 $ 881,957

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Sportsbook revenue includes online sportsbook and retail sportsbook revenue.

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

Beginning in the three month period ended September 30, 2025, other 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.

Interest income included in other revenue for the three and nine month periods ended September 30, 2025 was $ 20.2 million, of which $ 12.7 million relates to the six month period ended June 30, 2025.

Prior 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 $ 65.6 million for the nine months ended September 30, 2025, respectively, and $ 47.5 million and $ 64.4 million for the nine months ended September 30, 2024, respectively.

Other revenue primarily includes Fantasy, Lottery, Prediction Markets and interest income on customer deposits.

The opening and closing balances of the Company’s accounts receivable from contracts with customers were $ 105.6 million and $ 86.1 million for the three months ended March 31, 2026, respectively, and $ 57.8 million and $ 66.6 million for the three months ended March 31, 2025, respectively.

Stock-Based Compensation

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All stock-based compensation awards expire seven to ten years after the grant date thereof.

The following table shows restricted stock unit (“RSU”) and stock option activity for the nine months ended September 30, 2025:

The following table shows restricted stock unit (“RSU”) and stock option activity for the three months ended March 31, 2026:

Options RSUs Total Weighted Average Exercise Price of Options Weighted Average FMV of RSUs

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Forfeited ( 5 ) ( 506 ) ( 20 ) ( 16 ) ( 547 ) 14.83 32.45

Outstanding at September 30, 2025 18,175 15,464 11,167 413 45,219 $ 9.52 $ 29.38

As of September 30, 2025, total unrecognized stock-based compensation expense of $ 624.3 million related to granted, and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.6 years.

The following tables show stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

Options RSUs Total Options RSUs Total

Time-based (1)

$ 1,908 $ 53,296 $ 55,204 $ 1,632 $ 45,073 $ 46,705

— 15,982 15,982 — 38,814 38,814

— 1,287 1,287 — 2,033 2,033

Total $ 1,908 $ 70,565 $ 72,473 $ 1,632 $ 85,920 $ 87,552

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Outstanding at March 31, 2026 16,228 22,427 13,282 189 52,126 $ 10.92 $ 27.34

As of March 31, 2026, total unrecognized stock-based compensation expense of $ 744.2 million related to granted, and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 3.0 years.

The following table shows stock-based compensation expense for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

Options RSUs Total Options RSUs Total

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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.

The Company’s income tax provision (benefit) for the three and nine months ended September 30, 2025 and 2024 is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

The Company’s income tax provision (benefit) for the three months ended March 31, 2026 and 2025 is as follows:

Three Months Ended March 31,

Income tax provision (benefit) $ 6,369 $ ( 5,600 )

The effective tax rates for the three months ended September 30, 2025 and 2024 were 4.5 % and 0.4 %, respectively, and the effective tax rates for the nine months ended September 30, 2025 and 2024 were 4.2 % and 16.8 %, respectively.

The difference between the Company’s effective tax rates for the three and nine month periods in 2025 and 2024 and the U.S.

statutory tax rate of 21% was primarily due to a valuation allowance related to the Company’s deferred tax assets, offset partially by current state tax and current foreign tax.

The effective tax rates for the three months ended March 31, 2026 and 2025 were 27.8 % and 14.2 %, respectively.

The difference between the Company’s effective tax rates for the three month periods in 2026 and 2025 and the U.S.

statutory tax rate of 21% was primarily due to a valuation allowance related to the Company’s deferred tax assets, offset partially by current

state tax and current foreign tax.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted.

Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (“IRC”) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes.

The company recognized the income tax effects of the OBBBA in its third quarter 2025 financial statements.

Due to the valuation allowance, the OBBBA does not have a material impact on the financial statements.

Segment Information

The Company has one consolidated operating 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.

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

The Company has one consolidated reportable segment.

This segment provides users with Sportsbook, iGaming, Fantasy, Lottery, Prediction Markets, and other online offerings as well as the design, development and licensing of sports betting and casino gaming software for its Sportsbook and iGaming offerings.

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

The determination of reportable operating segments is based on the Chief Operating Decision Maker’s (“CODM”) use of financial information provided for the purposes of assessing performance and making operating decisions.

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 condensed consolidated balance sheets 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 condensed consolidated balance sheets 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:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Total revenue $ 1,646,076 $ 1,408,806

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(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;

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

(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, gains 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:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Net income (loss) attributable to common stockholders – basic $ 21,070 $ ( 33,864 )

Loss (gain) on remeasurement of contingent consideration ( 5,329 ) —

Net income (loss) attributable to common stockholders – diluted $ 15,741 $ ( 33,864 )

Weighted-average Class A common stock shares outstanding – basic 494,351 493,323

Weighted-average diluted impact of contingent consideration (1)

Weighted-average diluted impact of options and RSUs (1)

Weighted-average Class A common stock outstanding – diluted 510,630 493,323

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

$ 0.04 $ ( 0.07 )

Net income (loss) attributable to common stockholders $ ( 256,788 ) $ ( 293,688 ) $ ( 132,716 ) $ ( 372,434 )

Basic and diluted weighted-average common shares outstanding 496,639 486,219 495,522 479,981

Earnings (loss) per share attributable to common stockholders:

Basic and diluted $ ( 0.52 ) $ ( 0.60 ) $ ( 0.27 ) $ ( 0.78 )

There were no preferred or other dividends declared for the three and nine months ended September 30, 2025.

The below table includes the total securities potentially dilutive for the three and nine months ended September 30, 2025 and 2024, which have been excluded from the computation of diluted earnings (loss) per share.

September 30,

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

$ 0.03 $ ( 0.07 )

(1) Calculated using treasury stock method

There were no preferred or other dividends declared for the three months ended March 31, 2026.

The below table includes the total securities potentially dilutive for the three months ended March 31, 2026 and 2025, which have been excluded from the computation of diluted earnings (loss) per share.

Class A common stock resulting from exercise of all warrants — 1,196

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Total 22,915 65,733

The Company has contingent consideration arrangements related to business combinations as disclosed in “Note 3 – Business Combinations.” Those potential shares have been excluded from the computations and tables above as they are contingently issuable shares, and the contingency to which the issuance relates was not met at the end of the reporting period.

The Company has contingent consideration arrangements related to business combinations as disclosed in “Note 3 – Business Combinations.” Certain potential shares associated with these arrangements have been excluded from the computations and tables above as they are contingently issuable, and the contingency to which the issuance relates was not met at the end of the reporting period.

Related-Party Transactions

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

As of September 30, 2025, the Company had invested a total of $ 12.7 million and none of the total commitment in DBDK Venture Fund I, LP and DBDK Fund II, LP, respectively.

As of March 31, 2026, the Company had invested a total of $ 13.5 million and $ 2.0 million of the total commitment in DBDK Venture Fund I, LP and DBDK Fund II, LP, 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.

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

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.

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 the three and nine months ended September 30, 2025, the Company incurred $ 0.1 million and $ 0.4 million of expense under the Aircraft Leases, respectively, as well as $ 1.8 million and $ 2.9 million for upgrades related to the aircraft in each period, respectively.

During the three months ended March 31, 2026 and 2025, the Company incurred $ 0.1 million of expense under the Aircraft Leases in each period.

Commitments and Contingencies

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Years Ending December 31,

From October 1, 2025 to December 31, 2025 $ 161,212

From April 1, 2026 to December 31, 2026 $ 423,777

Thereafter 40,908

Total $ 2,139,333

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 three month period ended September 30, 2025.

As of September 30, 2025 , the Company has been issued $ 500.0 million in surety bonds at a combined 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.

As of March 31, 2026, the Company has been issued $ 500.0 million in surety bonds at a combined 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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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 1.6 million shares for $ 71.2 million and 8.2 million shares for $ 314.0 million during the three and nine months ended September 30, 2025, respectively, under the Stock Repurchase Program.

The Company repurchased 3.3 million shares and 3.7 million shares for $ 98.6 million and $ 142.3 million during the three months ended March 31, 2026 and 2025, respectively, under the Stock Repurchase Program.

Contingencies

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(v) there are significant factual issues to be resolved;

and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties involved.

specific matter could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

and/or (vi) there are novel legal issues or unsettled legal theories

to be presented or a large number of parties involved.

Unless otherwise indicated, for each of the matters described below, management does not believe that, despite the potential for significant damages, and based on currently available information, the outcome of any specific matter will have a material adverse effect on our financial condition, though an outcome of a specific matter could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

Attorney General of Texas

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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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10,721,543 (“the ’543 Patent”), entitled “Method of and System for Managing Client Resources and Assets for Activities on Computing Devices”.

The allegations based on the ’243 Patent are directed to Sportsbook, and the allegations based on the ‘543 Patent are directed to both Sportsbook and DFS.

The allegations based on the ’243 Patent are directed to Sportsbook, and the allegations based on the ’543 Patent are directed to both Sportsbook and Fantasy.

On July 28, 2021, Winview filed an amended complaint, in which it alleges that the Company infringes two additional patents:

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10,806,988 (“the ’988 Patent”), entitled “Method Of and System For Conducting Multiple Contests of Skill with a Single Performance”.

The allegations based on the ’730 Patent are directed at Sportsbook, and the allegations based on the ’988 Patent are directed at DFS.

The allegations based on the ’730 Patent are directed at Sportsbook, and the allegations based on the ’988 Patent are directed at Fantasy.

On November 15, 2021, Winview filed a second amended complaint (the “SAC”), adding as defendants DK Crown Holdings Inc.

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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 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.

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 (“IPRs”) with the PTAB challenging the validity of the ’543 and ’730 Patents.

On September 20, 2022, the court entered an order staying the pending motion to dismiss and staying all discovery pending final resolution of the petition for inter partes review through a final written decision.

On February 15, 2023, the District Court administratively terminated the lawsuit pending the PTAB’s final written decision.

On February 15, 2023, the District Court administratively terminated the lawsuit pending the PTAB’s

final written decision.

On January 29, 2024, the PTAB issued final written decisions in the IPRs, finding unpatentable all challenged claims of the ’243, ’543, and ’730 Patents.

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On February 20, 2024, the court granted the request.

On March 29, 2024, Winview filed a notice of appeal in the United States Court of Appeals for the Federal Circuit, challenging the PTAB’s final written decisions in the IPRs.

On March 29, 2024, Winview filed a notice of appeal in the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”), challenging the PTAB’s final written decisions in the IPRs.

On April 11, 2024, the parties jointly requested that the district court litigation remain administratively terminated until at least the Federal Circuit issues its mandate regarding Winview’s appeals.

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On June 26, 2024, Winview and DraftKings filed a joint stipulation of voluntary dismissal of Winview’s appeal.

On June 28, 2024, the United States Court of Appeals for the Federal Circuit ordered Winview’s appeal dismissed.

On June 28, 2024, the Federal Circuit ordered Winview’s appeal dismissed.

On December 17, 2024, the court dismissed all of Winview’s claims with respect to U.S.

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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 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, Fantasy, 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.

On January 16, 2026, DraftKings filed petitions for IPRs under 35 U.S.C.

§ 312 and 37 C.F.R.

§ 42.104 for U.S.

11,451,883 and U.S.

11,338,189, which relate to the ’543 Patent and ’988 Patent, respectively.

On March 17, 2026, the court granted-in-part and denied-in-part our motion to dismiss.

The court denied our motion to dismiss the direct infringement claims of the ’543 Patent but granted with prejudice the motion to dismiss the willful infringement and indirect infringement claims as to the ’543 Patent and ’988 Patent.

The infringement claims of the ’543 Patent and ’988 Patent will therefore proceed.

On March 31, 2026, DraftKings filed its counterclaims, answer, and affirmative defenses to Winview’s Third Amended Complaint.

On April 14, 2026, Winview filed its answer to DraftKings’ counterclaims.

We intend to vigorously defend this case.

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AG 18, LLC d/b/a Arrow Gaming

On August 19, 2021, AG 18, LLC d/b/a Arrow Gaming (“Arrow Gaming”) filed a complaint against the Company in the United States District Court for the District of New Jersey alleging that the Company’s DFS and Casino product offerings infringe four patents.

On August 19, 2021, AG 18, LLC d/b/a Arrow Gaming (“Arrow Gaming”) filed a complaint against the Company in the United States District Court for the District of New Jersey alleging that the Company’s Fantasy and iGaming offerings infringe four patents.

On October 12, 2021, Arrow Gaming filed an amended complaint to add one additional patent.

The following U.S.

Patents are asserted against one or both of the Company’s DFS and Casino product offerings in the amended complaint:

9,613,498, entitled “Systems and Methods For Peer-to-Peer Gaming”;

9,978,205, entitled “Location Based Restrictions on Networked Gaming”;

10,497,220 entitled “Location Based Restrictions on Networked Gaming”;

Patents were asserted against one or both of the Company’s Fantasy and iGaming offerings in the amended complaint:

9,613,498 (“the ’498 Patent”), entitled “Systems and Methods For Peer-to-Peer Gaming”;

9,978,205 (“the ’205 Patent”), entitled “Location Based Restrictions on Networked Gaming”;

10,497,220, entitled “Location Based Restrictions on Networked Gaming”;

10,614,657 (“the ’657 Patent”), entitled “Location Based Restrictions on Networked Gaming”;

11,024,131, entitled “Location Based Restrictions on Networked Gaming” (collectively, the “Arrow Gaming Patents”).

On November 10, 2021, we answered the complaint and filed counterclaims (the “Counterclaims”).

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

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

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

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

On October 21, 2022, the Company filed a renewed motion to dismiss plaintiff’s complaint.

On November 4, 2022, the Company filed a motion to stay the case pending resolution of the below-referenced petitions for inter partes review.

Between August 22, 2022 and August 30, 2022, the Company filed petitions for inter partes review (“IPRs”) with the PTAB challenging the validity of each of the Arrow Gaming Patents.

Between August 22, 2022 and August 30, 2022, the Company filed petitions for IPRs with the PTAB challenging the validity of each of the Arrow Gaming Patents.

On March 14, 2023, the PTAB granted institution of all IPRs.

On March 12 and 13, 2024, the PTAB issued final written decisions in all pending IPRs finding all claims that were asserted in the litigation unpatentable.

On March 12 and 13, 2024, the PTAB issued final written decisions in all pending IPRs finding all claims that were asserted in the litigation

unpatentable.

Only two claims were not found unpatentable:

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On May 14, 2024, Arrow Gaming filed a Notice of Appeal of the IPR directed to the ’498 Patent.

That appeal remains pending.

On July 10, 2024, DraftKings filed a Notice of Appeal of the IPR directed to the ’205 Patent challenging the PTAB’s final written decision as to claim 18 of the ’205 Patent.

That appeal remains pending.

On April 3, 2023, the District Court administratively terminated the lawsuit pending the PTAB’s final written decisions.

The parties have agreed to maintain the stay pending any appeals of the PTAB’s final written decisions in the IPRs.

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.

On April 15, 2026, the Federal Circuit issued a summary affirmance upholding the PTAB’s final written decision invalidating the asserted claims of the ’498 Patent.

On May 6, 2026, the Federal Circuit issued an affirmance in the DraftKings appeal of the IPR directed to the ’205 Patent, upholding the PTAB’s final written decision holding that claim 18 of the ‘205 Patent had not been proven to be unpatentable.

On April 28, 2026, Arrow Gaming filed a motion for voluntary dismissal of the lawsuit with prejudice.

Diogenes Ltd.

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& Colossus (IOM) Ltd.

(“Colossus”), filed a complaint against the Company in the United States District Court for the District of Delaware alleging that the Company’s Sportsbook product offering infringes seven of its patents.

(“Colossus”), filed a complaint against the Company in the United States District Court for the District of Delaware alleging that the Company’s Sportsbook offering infringes seven of its patents.

The following U.S.

Patents, each entitled “Wagering apparatus, methods and systems”, are asserted against the Company’s Sportsbook product offering in the complaint:

Patents, each entitled “Wagering apparatus, methods and systems”, are asserted against the Company’s Sportsbook offering in the complaint:

8,721,439 (“the ’439 patent”);

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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.

On July 7, 2025, Colossus filed a Notice of Appeal in 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, on January 26, 2026, the Company filed its responsive brief in the appeal, and on April 28, 2026, Colossus filed its reply brief.

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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The dismissal and withdrawal both occurred on March 18, 2024.

Only the ‘779 Patent remains pending in

the district court litigation.

Only the ’779 Patent remains pending in the district court litigation.

The parties have stipulated to a stay of the district court litigation pending resolution of the IPR directed to the ’779 Patent.

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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.

On July 30, 2025, the court conducted a hearing on the plaintiff’s request for a Status Conference and a Case Management Order.

On August 8, 2025, Steiner filed his amended complaint.

On September 9, 2025, DraftKings and FanDuel jointly moved to dismiss Steiner’s amended complaint, which motion remains pending.

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 DraftKings Marketplace (“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 asserted 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 constituted 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 brought 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.

On February 26, 2025, the parties entered into a Stipulation and Agreement of Settlement subject to, among other things, court approval.

On July 30, 2025, the court entered its Order and Final Judgment, among other things, certifying the settlement class, approving the settlement and dismissing the action with prejudice.

We established an accrual for this matter as of December 31, 2024.

Beginning in July 2023, the Company received subpoenas from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts (the “Massachusetts Securities Division”) 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 (the “SEC”) seeking documents concerning, among other things, the blockchain on which NFTs that were sold on Marketplace were minted and digital assets and validator nodes associated with that blockchain, and related

On June 3, 2025, the SEC informed the Company that it concluded its inquiry.

We have complied with the request by the Massachusetts Securities Division.

Any adverse outcome in the Massachusetts Securities Division 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 Massachusetts Securities Division matter.

The Company cannot predict with any degree of certainty the outcome of the Massachusetts Securities Division matter 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 Massachusetts Securities Division matter 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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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.

Plaintiffs declined to replead the previously dismissed claims, and defendants intend to renew their motions to dismiss the remaining claims at an appropriate time.

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.

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, which was confirmed by a subsequent written order entered on March 3, 2026, dismissing the remaining claims with prejudice.

The plaintiffs did not file a notice of appeal by the April 6, 2026, deadline.

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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The plaintiffs are seeking, among other things, injunctive relief, actual damages, double or treble damages, and attorneys’ fees.

On March 26, 2024, the case was transferred to the Business Litigation Session (“BLS”) of the Massachusetts Superior Court.

On March 26, 2024, the case was transferred to the Business Litigation Session of the Massachusetts Superior Court.

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.

On October 10, 2025, DraftKings served its motion for summary judgment.

On February 18, 2026, the Court issued an order denying DraftKings’ motion for summary judgment on the Chapter 93A claim (Count I) but granted the motion on the Chapter 266 claim (Count II).

On March 10, 2026, plaintiffs filed a motion for reconsideration of the Order with respect to Count II, which the court denied on April 9, 2026.

The Company intends to vigorously defend this case.

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On May 9, 2025, the court denied the motion to amend.

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.

On June 11, 2025, Plaintiff filed an amended motion for class certification.

On June 27, 2025, DraftKings filed an opposition, and Plaintiff filed a reply on July 7, 2025.

The class certification motion remains pending.

On October 21, 2025, Plaintiff filed a motion for summary judgment, which remains pending.

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 January 20, 2026, the court entered an order directing the parties to provide class notice within thirty days of the order.

The parties provided class notice.

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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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 alleged 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 asserted 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 sought 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 a motion to dismiss on February 3, 2025.

On July 28, 2025, the court granted DraftKings’ motion to dismiss as to all claims with prejudice, and on July 29, 2025, judgment was entered dismissing the complaint.

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 sought, among other things, payment of all purported unpaid sums due under the Agreement.

On November 25, 2024, DraftKings filed a partial motion to dismiss the complaint.

On February 28, 2025, the parties entered into a settlement agreement, and on March 3, 2025, the lawsuit was dismissed with prejudice.

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 alleged, 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.

DraftKings filed a motion to dismiss on February 21, 2025.

In response, plaintiff filed an Amended Complaint on March 14, 2025, and added a claim that the Company violated the Federal Wiretap Act.

On April 28, 2025, DraftKings filed a motion to dismiss the amended complaint.

On June 20, 2025, the parties entered into a settlement agreement, and the lawsuit was thereafter dismissed.

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 alleged that DraftKings interfered or prevented customers from withdrawing balances from closed accounts.

Plaintiff asserted claims for breach of contract, violation of Texas Deceptive Trade Practices Act, fraud, unjust enrichment, and conversion.

Plaintiff sought, on behalf of himself and the purported class, damages, punitive damages and attorney fees.

Plaintiff sought 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.

On April 1, 2025, DraftKings filed a motion to dismiss.

On June 13, 2025, the parties entered into a settlement agreement, and the lawsuit was thereafter dismissed.

On January 7, 2025, plaintiff Matthew Youngs, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc., Crown NJ Gaming Inc.

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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.

The plaintiff's complaint, as amended, asserts claims for violation of the New Jersey Consumer Fraud Act (“CFA”), intentional misrepresentation, 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.

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In the amended complaint, the plaintiffs removed DGMB Casino and Resorts Atlantic as defendants and removed claims of negligence.

targeting customers with casino deposit match promotions after such customers had become addicted to gaming.

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.

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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.

and adding 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, which remains pending.

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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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 alleged 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 alleged 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 brought claims for violation of the Kentucky Consumer Protection Act, intentional misrepresentation, fraudulent inducement, unjust enrichment, and declaratory relief.

Plaintiffs sought, 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 sought a declaration that DraftKings has breached agreements with Apple and Google relating to their respective app stores.

On March 31, 2025, DraftKings filed a motion to dismiss.

On April 28, 2025, the parties filed a stipulated dismissal of the lawsuit, without prejudice as to the individual claims of Mr.

Beyer and the putative class and with prejudice as to the individual claims of Mr.

On May 1, 2025, the court entered an order whereby (1) dismissing without prejudice the claims asserted by plaintiff James Beyer and the putative class against the Company, and (2) dismissing with prejudice the claims asserted by plaintiff Wyatt Robertson against the Company.

James Beyer, Collin Smothers, Mateen Zafer and Corey Davis

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(ii) anyone who opened an account and deposited money in response to the new customer 1,000 site credit promotion (with an Illinois subclass);

and (iii) anyone who opened an account and entered free

promotions on DraftKings’ platform before turning twenty-one years old and then placed paid bets on DraftKings after turning twenty-one years old (with an Illinois subclass).

and (iii) anyone who opened an account and entered free promotions on DraftKings’ platform before turning twenty-one years old and then placed paid bets on DraftKings after turning twenty-one years old (with an Illinois subclass).

On February 7, 2025, DraftKings removed the complaint to the United States District Court, Northern District of Illinois, Eastern Division.

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.

In response, on May 9, 2025, plaintiffs filed their first amended complaint (the “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), and struck DraftKings’ motion to dismiss without prejudice and with leave to reinstate should the court find that it has jurisdiction.

On September 8, 2025, DraftKings submitted its response, and on September 17, 2025, plaintiffs submitted their response.

The court has not yet ruled if it has jurisdiction.

§1332(d)(4)(A).

On November 20, 2025, the District Court ruled that it had jurisdiction under the Class Action Fairness Act.

On November 25, 2025, the District 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.

On February 26, 2026, the District Court denied DraftKings’ motion to certify.

On March 26, 2026, DraftKings filed a motion for reconsideration of the Court’s order denying certification, and on April 1, 2026, the District Court denied DraftKings’ motion for reconsideration.

The Company intends to vigorously defend this case.

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and Crown NY Gaming Inc.

in the United States District Court, Southern District of New York.

in the United States District Court for the Southern District of New York.

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 players with gaming addiction issues, including by pairing players who bet large amounts of money with VIP hosts who, plaintiffs allege, are trained to encourage customers to place frequent and large bets.

Plaintiffs brings claims for violation of the New York General Business Law sections 349 and 350, negligence, intentional misrepresentation, fraudulent inducement, unjust enrichment, and declaratory relief.

Plaintiffs bring claims for violation of the New York General Business Law sections 349 and 350, negligence, intentional misrepresentation, fraudulent inducement, unjust enrichment, and declaratory relief.

Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

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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, and Plaintiffs filed their opposition on July 17, 2025.

DraftKings filed its reply on August 4, 2025.

The motion remains pending.

On June 20, 2025, DraftKings filed a motion to dismiss.

The District 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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the ’237 Patent are directed to DK Sportsbook and DK Horse;

the ’189 Patent are directed to DFS and Pick6;

the ’883 Patent are directed to DK Sportsbook, DK Horse, DK Casino, DFS, and Pick6;

the ’189 Patent are directed to Fantasy and Pick6;

the ’883 Patent are directed to DK Sportsbook, DK Horse, DK Casino, Fantasy, and Pick6;

the ’020 Patent are directed to DK Sportsbook, DK Horse, and DK Casino;

the ’771 Patent are directed to DK Sportsbook, DK Horse, and DK Casino;

the ’880 Patent are directed to DFS and Pick6;

the ’402 Patent are directed to DFS and Pick6;

the ’880 Patent are directed to Fantasy and Pick6;

the ’402 Patent are directed to Fantasy and Pick6;

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 IPRs 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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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.

Plaintiff seeks to recover on behalf of all individuals within the District of Columbia that have (i) 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.

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;

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;

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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.

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 will hear argument on the motions to dismiss on December 2, 2025.

On March 26, 2026, the District Court dismissed the complaint with prejudice, concluding that it was barred by the amendment to D.C.

Code § 16-1702.

Plaintiff filed its notice of appeal to the United States Court of Appeals for the District of Columbia Circuit on April 9, 2026.

The Company intends to vigorously defend this case.

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On June 6, 2025, the City filed a motion to remand the case to state court.

On July 7, 2025, Defendants filed their opposition to the motion to remand, and Plaintiffs’ filed their reply on July 28, 2025.

On August 8, 2025, the City filed a motion for leave to file a surreply.

Both the motion to remand and the motion for leave to file a surreply remain pending.

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 City filed its response on February 23, 2026, and the defendants filed their reply on March 19, 2026.

The appeal remains pending.

The Company intends to vigorously defend this case.

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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 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:

of (i) anyone who participated in the casino deposit match promotion and lost part or all of their initial deposit (with a Pennsylvania subclass);

(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);

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).

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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 removed all of the allegations, purported classes, and causes of action relating to the Promotions Claims.

The First Amended Complaint only alleges claims and causes of action relating to alleged addiction matters, as follows:

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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.

On March 23, 2026, the District Court granted the motion as to all claims and dismissed all claims with prejudice (except for a conversion claim of one plaintiff, which it transferred to Pennsylvania state court), and ordered the case closed.

On April 17, 2026, plaintiffs filed a notice of appeal.

The Company intends to vigorously defend this case.

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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.

On April 8, 2026, the District Court granted in part and denied in part DraftKings’ motion to dismiss.

The District Court granted the motion to dismiss as to the Unfair Trade Practices and Consumer Protection La (“UTPCPL”) (consumer protection) claim relating to the Casino Deposit Match Promotion (Count I) without prejudice for failure to plead an “ascertainable loss.” The District Court granted the motion to dismiss the intentional misrepresentation claims as to the Casino Deposit Promotion (Count II) with prejudice as to two plaintiffs (Macek and Setton), without prejudice as to one plaintiff (Harner), and denied the motion as to a four th plaintiff (Alicea).

The District Court denied the motion to dismiss the UTPCPL claim as to the Risk-Free and No Sweat Promotions as to all plaintiffs (Count III).

The District Court granted the motion to dismiss the UTPCPL claim relating to the $1,000 Sportsbook Deposit Promotion (Count IV) without prejudice for failure to plead an “ascertainable loss”.

The District Court granted the motion to dismiss the intentional misrepresentation claims related to the Risk-Free and No Sweat Promotion (Count V) and the $1,000 Sportsbook Deposit Promotion (Count VI) with prejudice as time-barred.

The District Court granted the motion to dismiss the unjust enrichment claim (Count VII) to the extent based on the $1,000 Sportsbook Deposit Promotion without prejudice but not as to the Casino Deposit Match Promotion and Risk-Free and No Sweat Promotion.

The Court denied the motion to consolidate as moot given that it granted the motion to dismiss Macek I.

The District Court gave plaintiffs leave to file an amended complaint by May 13, 2026.

The Company intends to vigorously defend this case.

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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.

The remaining plaintiffs filed an opposition on September 25, 2025, and DraftKings filed its reply on October 16, 2025.

The motion remains pending, and the hearing is set for November 14, 2025.

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) (the “First Amended Complaint”), 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.

On March 30, 2026, DraftKings and the newly added defendants filed motions to dismiss the First Amended Complaint, which motions remain pending.

The Company intends to vigorously defend this case.

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On May 9, 2025, Micro-Gaming Ventures, LLC (“Micro-Gaming”) filed suit against DraftKings Inc.

District Court for the District of New Jersey.

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”).

8,545,311, 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, 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, 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, entitled “Location-based wagering via remote devices”;

12,266,244, 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.

On March 30, 2026, the Company’s motion to dismiss was granted with prejudice.

On April 24, 2026, Micro-Gaming filed its notice of appeal.

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.

Product Liability Matters

Beginning on March 24, 2026, the first of six lawsuits focused primarily on product liability claims was filed by individual plaintiffs in state courts in Massachusetts and Pennsylvania against DraftKings Inc., FanDuel, Inc., and related individuals and entities, and in certain instances other third parties.

The complaints allege, among other things, that DraftKings’ online betting platforms are defectively designed and unreasonably dangerous because they allegedly incorporate features intended to encourage continuous betting and compulsive gaming.

Plaintiffs also allege that the DraftKings defendants failed to adequately warn users about the risks associated with the use of the platforms and engaged in deceptive and unfair conduct through the use of, among other things, targeted promotions and wagering opportunities, notifications, data-driven personalization, and “VIP” programs.

The complaints assert various claims under state tort and statutory laws and assert claims for personal monetary losses and actual, compensatory, statutory and/or punitive damages for alleged emotional, financial and physical harms.

The cases are at an early stage, and DraftKings has not yet responded to the complaints.

The Company intends to vigorously defend these cases.

Any adverse outcome in any one of these 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 any one of these matters.

The Company cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible losses or ranges of losses.

Any adverse outcome in one of these matters could expose the Company to substantial damages that may have a material adverse impact on the Company’s operations and cash flows.

Interactive Games II

On April 2, 2026, Interactive Games LLC (“Interactive Games”) filed a complaint against DraftKings Inc.

in the United States District Court for the District of Massachusetts alleging that DraftKings’ offerings infringe five patents.

The following U.S.

Patents are asserted against DraftKings’ mobile apps in the complaint:

12,409,382, entitled “Smart phone with wrapper application that checks whether the smart phone may use a gambling application”;

8,974,302, entitled “Multi-process communication regarding gaming information”;

12,548,404, entitled “Multi-level device verification for mobile gambling applications”;

12,400,518, entitled “System for facilitating online wagering with nearby mobile phones”;

12,406,284, entitled “Mobile device proximity tracking for selective content delivery and formatting” (collectively, the “Interactive Games Patents”).

The Company has not yet responded to the complaint.

We intend to vigorously defend this case.

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.

On April 27, 2026, plaintiffs John Farley and Michael Fox, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and certain FanDuel-related entities in the United States District Court for the Southern District of New York.

The plaintiffs allege, among other things, that DraftKings’ online sports wagering platform is improperly designed and unreasonably dangerous because it allegedly incorporates features intended to encourage compulsive gaming.

Plaintiffs further allege that DraftKings engaged in deceptive and unfair conduct through the use of targeted promotions, bonus bet promotions, repeated notifications, and data-driven personalization.

Plaintiffs assert claims for violation of New York General Business Law §§ 349 and 350, negligence, and unjust enrichment.

Plaintiffs seek, among other things, unspecified compensatory damages, restitution, disgorgement, injunctive relief, attorneys’ fees and costs.

Plaintiffs seek to certify a nationwide class and a New York subclass of users who allegedly maintained sportsbook accounts on defendants’ sportsbook platforms, were exposed to their promotions, live or in-game betting features, or repeated wagering communications and who deposited money, placed wagers or suffered losses on the platforms.

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.

Other Litigation

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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.

Certain examinations are progressing in the administrative process.

The Company intends to vigorously defend its positions.

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 consolidated financial statements in the period or periods in which that determination is made.

Subsequent Events

Acquisition of Railbird Technologies Inc.

( “ Railbird ” )

On October 21, 2025 (“Railbird Acquisition Date”), the Company completed the acquisition of Railbird and its wholly owned subsidiary Railbird Exchange, LLC, a federally licensed exchange designated by the Commodity Futures Trading Commission.

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

Under the terms of the merger agreement, the Company paid upfront consideration in the amount of approximately $ 48.6 million, consisting of approximately $ 19.9 million in cash consideration and 0.9 million shares of the Company’s Class A common stock, valued at approximately $28.7 million, with additional consideration of up to $ 200.0 million, in a combination of shares of the Company’s Class A common stock, 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, and cash, payable at a later date based on certain post-closing performance metrics.

The acquisition will be accounted for using the purchase method of accounting, and Railbird’s assets, liabilities and results of operations will be included in the Company’s financial statements from the Railbird Acquisition Date.

The Company is in the process of completing the purchase price allocation.

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.

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-Q

Item 1. Financial Statements