DraftKings logo

DraftKings Inc. (DKNG)

NASDAQ · Sports betting & iGaming · Deep Dive · October 16, 2026

The business compounds; the share, so far, does not.

At $19.31 the price requires reported owner earnings to compound +14.7%/yr for a decade; the ex-Predictions core requires +6.9%/yr. The $9.14/share gap between those two paths is what the market pays for Predictions surviving.

Price — close, Thu Oct 15, 2026
$19.31
+2.17% on the day · USD
52-week high
$36.98
Jan 6, 2026
52-week low
$18.505
52-week range $18.505–$36.98
Market cap
$9,586.5M
496.454M Class A shares · Q2 2026 10-Q cover
Enterprise value
$10,460.1M
Governing as-filed bridge · pro-forma $11,160.1M

Price $19.31 (+2.17% day), Thu Oct 15, 2026 close — re-pulled and corroborated Fri Oct 16, 2026. 52-wk $18.505–$36.98 (high Jan 6, 2026). Shares 496.454M Class A (period-end cover count, Q2 2026 10-Q) → market cap $9,586.5M. Enterprise value (EV) on the governing as-filed bridge: $10,460.1M (debt $1,857.5M − cash $983.9M); on the pro-forma bridge including the Aug 2026 Term B due 2033: $11,160.1M. Both bridges enumerated in Balance Sheet; the reverse DCF prints bars for both. Class B (393,013,951 sh, 10 votes, all held by CEO Jason Robins) has no economic rights and is excluded from EV.

Verdict

The verdict, up front

Top unverifiable item: Predictions’ revenue, take rate and market-making profit are undisclosed — bundled inside the “Sports” segment. The profit leg of the binary dominating this price cannot be verified from filings.

Quality: A proven volume-and-hold compounder — revenue compounded +47.0%/yr FY21→FY25, Sports Consumer Volume +14.5% in Q2 2026 — whose per-share conversion has failed so far: TTM owner earnings (OE = free cash flow minus stock-based compensation, SBC) are $327.4M after $323.5M of SBC, and the share count rose through $773.8M of buybacks.

Moat: Regulated scale in online sports betting (OSB) and iGaming — licenses, brand, product velocity — intact in the licensed core; its margin is taxed away at the edges, and the growth vector (Predictions) has a moat made of law, not product: courts decide whether it exists.

Price: At $19.31 the price requires reported OE to compound +14.7%/yr for a decade (competitive advantage period, CAP, ~6.6 years even at +20%/yr). The ex-Predictions core requires +6.9%/yr (CAP ~2.2 years at +20%). The $9.14/share gap between those two paths is what the market pays for Predictions surviving. Core-only scenario value: $11.10–$16.64/share at 0–5% core growth, vs $19.31 paid.

Downside flags (surface here by rule): two unaddressed flags from the Pabrai Downside Checklist — leverage on the pro-forma bridge (pro-forma net debt $1,573.6M = 3.15× TTM adjusted EBITDA if the Term B proceeds are not offset) and the regulatory binary (core-only downside −13.8% to −42.5% vs the price).

Management: C+ (re-verified Oct 16, 2026: Form 4 sweep to today, no filing since Oct 2, no insider buys). Guidance C+ · execution B+ · candor B− · capital allocation C+ · alignment C−.

Next tests: Nov 5, 2026 — Q3 print (H2 must deliver $418–618M of adjusted EBITDA vs the maintained guide); Nov 9, 2026 — Kalshi’s Supreme Court response due in No. 26-299.

Key debates

The arguments the price is actually having

DebateWhat the price assumesWhat the record showsResolving event + dateWhat would change the read
Can the core clear its own bar? Core OE compounds at least +6.9%/yr for a decade Revenue +47.0%/yr FY21→FY25 and iGaming +7.5% in Q2 2026 — but Q2 revenue fell −4.6%, and the guide needs a record second half Q3 print Nov 5, 2026; FY26 verdict Feb 2027 Two straight quarters of core revenue growth ≥ +6% at hold ≥ 7% clears it; a Q3 adjusted EBITDA print under $150M breaks the second-half math
Is the maintained FY26 guide real? Adjusted EBITDA lands inside $700–900M H1 delivered $282.5M, so $418–618M must come in H2; the guide was set Feb 13, 2026 after Robins sent the draft back twice to be lowered — and the year-ahead EBITDA guide has still missed three straight years Nov 5, 2026 (pace); Feb 2027 (verdict) Q3 ≥ $209M keeps the guide credible; under $150M, even the $700M floor needs a record Q4
Does the state tax ratchet keep compressing the moat’s margin? Pass-through pricing and mix hold margins Illinois’ per-wager fee live since Sep 1, 2025 (wagers −15% YoY that month, handle +9%, ticket +28%); Chicago stacks to 52.25%+; MD, NJ, LA hiked in 2025; Ohio’s doubling was rejected 2027 state sessions; Illinois HB 5143 (repeal) pending Another top-five state adopting a per-wager fee extends the ratchet; Illinois repeal would be a first reversal
Does Predictions cannibalize the licensed book? Management’s “~1% overlap” assertion The assertion is unverifiable — no overlap data is disclosed. FanDuel reports cannibalization of its own book at “low single-digit,” later “very low-single-digit” (Tier 2) No DKNG disclosure scheduled; competitor prints quarterly Any DKNG overlap or Predictions-revenue disclosure moves this from assertion to evidence
[Price] Does Predictions survive as a lawful nationwide business? $9.14/share of the price — the gap between the reported-OE path ($10.21/share at core growth) and the ex-Predictions path ($19.35) Preemption lost 3–0 in both the Sixth (Sep 25, 2026) and Ninth Circuits (Aug 28 / Sep 16, 2026); won preliminarily in the Third (Apr 6, 2026); 39 state AGs + DC urged Supreme Court review against the platforms. Desk band: 25–40% ultimate nationwide win by end-2028 (basis in Legal) Kalshi response due Nov 9, 2026; cert decision expected by ~Jun 2027; CFTC final rules 2027 A cert grant plus any preemption win raises the band; a denial leaves state-by-state trench warfare and the core-only grid governs
[Price] Will the share count ever fall? The credited bars assume net shrink management has not delivered Weighted count rose 482.0M → 495.6M FY24→FY25 through $773.8M of cumulative buybacks; 2026 net shrink ≈ 0%. Remaining authorization $1,226.2M = 12.8% of the count at $19.31 Year-end count, Feb 2027 Count under 490M earns the buyback credit; 496.5M or higher retires it for this cycle

Catalyst calendar

Dated tests, with thresholds

DateEventDebate resolvedThreshold
Nov 5, 2026 Q3 2026 print + 10-Q H2 guide math; count direction; post-refi balances Adjusted EBITDA ≥ $209M pass / < $150M fail; count ≤ 495.0M / ≥ 496.5M
Nov 9, 2026 Kalshi response due, Supreme Court No. 26-299 The binary’s next procedural step Filed (binary observable); review not yet granted
Feb 2027 Q4 / FY26 print FY26 guide verdict; buyback credit earned or retired FY26 adjusted EBITDA ≥ $700M; year-end count < 490M
By ~Jun 2027 Supreme Court cert decision, No. 26-299 Whether the binary gets a federal answer this term Granted / denied (binary observable)

Drivers

Three settled or testable, one contested

The kill attempt

The bear case, argued to win

  1. The per-share record is the thesis problem. $773.8M of buybacks at a ~$34.24 average bought a share count that went UP (482.0M → 495.6M weighted, FY24→FY25), because SBC ($323.5M TTM, guided at 6% of revenue against ~$750M of guided FCF) and issuance refill it. The founders sold 9,057,381 shares ≈ $363.0M (Jan 2024–Oct 13, 2026) and bought zero — while Kalish’s prepaid forwards keep settling ($18.7M received in 2023 for the tranche that delivered 864,880 shares Sep 2, 2026). The business compounds; the share, so far, does not.
  2. The binary is adverse on today’s record, and the downside is priced in dollars. Preemption — the prong that decides nationwide legality — lost 3–0 in the Sixth and Ninth Circuits. Value the core alone (ex-Predictions OE $577.4M, the $250M/yr Predictions spend stopped) and the stock is worth $11.10 at 0% core growth, $14.17 at +3%, $16.64 at +5% — 14–43% below the $19.31 paid — before any stranded wind-down costs, license jeopardy in licensed states (Massachusetts warned licensed books off prediction markets Nov 13, 2025; Nevada took DKNG’s licenses the same month), or class-action drag (two suits filed Aug 2026, allegations only).
  3. The tax ratchet compounds against the moat. Illinois invented the per-wager fee in 2025; Chicago stacked a 10.25% city tax to 52.25%+; MD, NJ and LA raised rates the same year. Robins said it himself on May 3, 2024: “the cost has to get absorbed by the consumer.” Every point of tax is a point of hold the product must re-earn. (No company-stated dollar impact of the Illinois fee exists; the ~$80M figures in circulation are analyst estimates, refused here as fact.)
  4. The guide is back-loaded and the guide-setter has a record. H1 2026 adjusted EBITDA was $282.5M; the maintained FY26 guide needs $418–618M in H2. The year-ahead EBITDA guide has missed three straight years (arcs in Management), and the Nov 2023 Investor Day’s ~$1.4B 2026 EBITDA target will miss by roughly half.

Bull case

Answering the kill attempt, point by point

Reverse DCF

The reported bar governs; the core bar is the decomposition

Method (house stack): solve the single growth rate that makes a 10-year owner-earnings path, grown at 2% thereafter, worth today’s EV at a 10% required return; terminal value fades to cost-of-capital economics with no exit multiple. OE = FCF − SBC throughout. Full model, inputs and both bridges: reverse_dcf_v3.py / reverse-dcf-v3-2026-10-16.json in the dossier (governing bridge verified against the filed v2 model).

The bridge, both ways (full enumeration in Balance Sheet & Capital Returns). Governing — as filed Jun 30, 2026: debt $1,857.5M, cash $983.9M, net debt $873.6M = 1.75× TTM adjusted EBITDA ($499.2M), EV $10,460.1M. Alternative — pro-forma: the Aug 25, 2026 credit amendment added a $700M Term B due 2033 (8-K acc. 0001104659-26-100812; priced at 99.5, ≈ $696.5M of proceeds) whose proceeds the filing says DKNG “intends to utilize” for opportunistic repurchases of a portion of the 2028 converts plus general corporate purposes. If spent without offsetting the converts — none reported executed as of Oct 16, 2026 — debt is $2,557.5M, net debt $1,573.6M = 3.15× TTM adjusted EBITDA, EV $11,160.1M. The as-filed bridge governs (it is the filed balance sheet); the pro-forma bars print beside it so the assumption is never buried.

Lens (TTM base)Flat bar — governingFlat bar — pro-formaCAP @ +20% (gov.)TV % of EV
Naive FCF ($650.9M)+5.2%/yr+6.1%/yr—50.9%
Reported OE ($327.4M) — governing bar+14.7%/yr+15.5%/yr~6.6 yrs60.4%
OE ex-Predictions ($577.4M) — core decomposition+6.9%/yr+7.8%/yr~2.2 yrs52.7%

Required vs delivered (the base-rate line that travels with the bar): the +14.7% reported bar is 2.4× the most recent delivered reported OE growth of +6.2% ($308.2M FY25 → $327.4M TTM), and OE was negative through FY23 — the delivered OE record is two positive years, FY24 (+$26.2M) and FY25 (+$308.2M), plus the TTM ($327.4M). The price asks for a decade at a rate the company has never sustained for even three years. The core lens’s +6.9% bar sits against a richer history — revenue compounding +47.0%/yr FY21→FY25 — the decomposition is where the argument is winnable.

Normalization sensitivity (the ex-Predictions lens is a normalization, so it prints as a range): the lens adds back management’s guided Predictions drag of $200–300M of adjusted EBITDA (both 2026 calls). At the $200M low end the base is $527.4M and the bar is +8.1%/yr; at the $250M midpoint (the filed lens) $577.4M and +6.9%/yr; at $300M, $627.4M and +5.7%/yr. Two caveats ride with it: an adjusted-EBITDA drag is not an OE drag (the add-back is unverified as cash), and segment revenue stays in the base while the spend comes out.

Buyback-credited bars — CONDITIONAL, credit not earned. If net shrink were demonstrated, required total OE growth falls as follows: governing bridge — reported OE +13.5% / +12.4% / +11.2% at 1% / 2% / 3% net shrink; ex-Predictions +5.8% / +4.7% / +3.7%. Pro-forma bridge — reported +14.4% / +13.2% / +12.1%; ex-Predictions +6.7% / +5.6% / +4.5%. The count rose in FY25 and is flat in 2026, so none of this credit is in the verdict.

Turbo trigger: the Predictions path. Grow both bases at the core bar (+6.9%/yr) and the ex-Predictions path is worth $19.35/share while the reported path is worth $10.21 — the spend drag is $9.14/share, which is what the market price embeds for Predictions surviving and converting. The margin-path inversion says the same thing in revenue terms: required revenue growth is +5.3%/yr at a 12% mature OE margin, +2.8% at 15%, +0.8% at 18%, −0.4% at 20% (current TTM OE margin 5.3%). Hurdle sensitivity on the governing reported bar: +10.2% at an 8% hurdle, +12.5% at 9%, +14.7% at 10%, +16.7% at 11%, +18.6% at 12%.

What you must believe

Implied $/share at revenue growth (rows) × mature OE margin (columns), governing bridge; bold = at or above the $19.31 price. The desk’s central cell — the filed inversion, revenue +2.8%/yr at a 15% margin — is the +3% × 15% cell, $19.63.

Rev CAGR \ Margin10%12.5%15%17.5%20%
0%$10.18$12.63$15.08$17.53$19.98
+3%$13.29$16.46$19.63$22.80$25.97
+6%$17.21$21.31$25.40$29.50$33.59
+9%$22.16$27.43$32.69$37.96$43.22
+12%$28.38$35.12$41.86$48.60$55.34

SBC, in full (it stays here, not in the headline): TTM SBC is $323.5M — 5.2% of revenue, down from 52.7% in FY21, but still 49.7% of TTM FCF ($650.9M), which is why the naive-FCF bar (+5.2%) and the OE bar (+14.7%) live in different worlds. Management guides SBC at 6% of revenue against ~$750M of guided FCF (stated on both the May 9, 2025 and Aug 7, 2025 calls); $676.0M of unrecognized SBC cost sits on the balance sheet over a 2.8-year average life. Every bar on this page is struck after charging SBC in full.

Terminal sanity: terminal value is 12.75× year-10 OE on every path by construction; implied terminal EV/EBIT is not meaningful on the reported lens (TTM GAAP EBIT is −$182.4M) and is stated as n/m rather than forced.

What’s growing

The series is the evidence

MetricFY21FY22FY23FY24FY25TTM (Q2’26)
Revenue1,296.02,240.5 (+72.9%)3,665.4 (+63.6%)4,767.7 (+30.1%)6,054.5 (+27.0%)6,222.5
Adj. EBITDA−675.4−721.7−151.0+181.3+620.0+499.2
FCF (OCF − capex)−435.4−657.9−22.7+407.6+647.5+650.9
SBC683.3578.8398.5381.4339.3323.5
Owner earnings (FCF − SBC)−1,118.7−1,236.7−421.2+26.2+308.2+327.4
OE marginn/mn/m−11.5%+0.5%+5.1%+5.3%
GAAP net income−1,257.8−1,361.9−802.1−507.3+3.7+17.8
Shares (period-end Class A, M)———482.0*495.6*496.454

$ millions except shares. *FY24/FY25 shares are weighted basic (10-K); the TTM figure is the period-end cover count (Q2 10-Q) — different measures, labeled as such. Same-window delivery: revenue +47.0%/yr FY21→FY25; OE swung from −$1,118.7M (FY21) to +$308.2M (FY25), +$327.4M TTM (a sign change — no CAGR printable). The compounding is real; the per-share conversion is the open question.

Latest quarter (Q2 2026) vs the guide’s needs

Q2 2026ValueNote
Revenue$1,443.2M (−4.6%)Sports $891.9M (−10.6%); iGaming $461.9M (+7.5%); Other $89.4M (incl. Lottery/Jackpocket)
Sports Consumer Volume$13,140M (+14.5%)Demand grew; monetization didn’t
Net revenue margin6.8% (vs 8.7%)June customer-friendly outcomes ≈ −$80M revenue (call)
MUPs / ARPMUP3.6M (+9.1%) / $132 (−12.6%)More customers, less revenue each
Adj. EBITDA$114.6M (vs $300.6M)H1 total $282.5M → H2 must deliver $418–618M
Buybacks in quarter$55.6MApr 358,133 sh @ $22.12; May 1,112,451 @ $25.18; Jun 783,882 @ $25.02
Count direction≈ flatNet shrink 2026 ≈ 0% after SBC + issuance
PredictionsNo revenue breakoutBundled in “Sports”; Robins cited “$11B annualized volume” (his figure, Aug 7, 2026 remarks — Tier 2)
AuditorBDO → Deloitte (FY27)8-K Sep 25, 2026; no disagreements
Legal (10-Q)Two prediction-market class actionsD. Mass. Aug 3, 2026; C.D. Cal. Aug 13, 2026 — allegations only

Management

Graded on behavior, in Fisher’s question order — C+

C+
Guidance credibility C+ Execution B+ Candor B− Capital allocation C+ Alignment C−

Grade re-verified Oct 16, 2026 — Form 4 sweep extended to today; latest filing Oct 2, 2026; no insider buys.

Sales & product engine — answered. Volume +14.5% and MUPs +9.1% in a quarter where revenue fell: the machine acquires and retains.

Innovation productivity — answered. Parlay mix drove structural hold 5.6% → 7.1% in two years; Predictions went from announcement to live (Dec 2025) with a vertically integrated stack (DKeX exchange, Jun 2026; NFA FCM approval, Jul 2026).

Cost & margin discipline — thin. Promo efficiency is claimed every call; the June outcomes hit (−$80M) and the undisclosed Illinois fee impact keep it thin.

Long-range outlook vs quarterly pressure — answered, adversely. Two investor days: Nov 14, 2023’s ~$1.4B 2026 EBITDA target will miss by ~half (the revenue leg hit a year early); Mar 2, 2026’s $55–80B 2030 industry frame and ≥30% long-term margin are not yet testable against a TTM consolidated margin of 8.0%.

Access — thin on the decisive item. Calls are forthcoming on the core; on Predictions — the item that prices the stock — revenue, take and overlap are all withheld.

Bench depth — thin: no evidence of a second operator was pulled for this edition; flagged, not filled.

Integrity — the capstone gate, and it caps the grade. A CEO who sends his own guide back twice to be lowered (Feb 13, 2026) earns candor credit; a founder group that has sold $363.0M, bought $0, and keeps settling prepaid forwards does not earn alignment credit. Both are true; the grade holds both.

Scorecard — behavior, not statements

Sub-gradeGradeBasis (behavior, not statements)
Guidance credibilityC+FY26 guide built conservatively (sent back twice, Feb 13, 2026), maintained Aug 7, 2026 — but the year-ahead adjusted EBITDA guide has missed three straight years
ExecutionB+Volume, hold, iGaming and the Predictions launch all delivered; Q2 2026’s miss was outcomes, not operations
CandorB−Self-indictment on the record (“missing numbers again is just not acceptable”); Jackpocket/GNOG EBITDA walk-back disclosed; Predictions metrics withheld
Capital allocationC+Refinancing termed out maturities (converts 2028, Term B 2032/2033, revolver 2031); buybacks bought a rising count at a $34.24 average into a $19.31 price
AlignmentC−Zero open-market buys, ever, in the sweep window; founders sold ≈ $363.0M; 6,113,810 Kalish shares pledged or under prepaid forwards

Guidance record (adjusted EBITDA, $M)

GuideInitialFinal / deliveredVerdict
FY23 (set Nov 2022)−250 to −150 (mid −200)Raised in-year to a −95 to −115 final guide; delivered −151.0Miss — below the final guide (and a hair below the initial range’s top)
FY24 (set Feb 16, 2024; raised Nov 2024)~+150 mid (implied)Initial guide missed; delivered +181.3Miss vs initial
FY25 (set Feb 14, 2025)900–1,000Cut May (800–900), maintained Aug, cut Nov (450–550); delivered 620.0Beat the final guide — above $450–550M; still ~a third below the initial guide
FY26 (set Feb 13, 2026)700–900Maintained Aug 7, 2026; H1 delivered 282.5 → H2 needs 418–618Open; verdict Feb 2027

Form 4 record (Tier 1; sweep extended to Oct 16, 2026 — EDGAR re-pull today confirms the latest filing is the Oct 2, 2026 Form 4): no open-market buys and no open-market sales by Robins, Liberman, Kalish or Ellingson since Sep 1, 2026 — including through the $18.505 low on Oct 14. Non-market items only: Sep 1 RSU vests (tax withholding at $23.44); Robins’ Sep 3 gift of 12,000 shares and Sep 11 GRAT transfer (696,850 shares + 800,000 options, no purchase/sale); Kalish’s Aug 12 exercise of 383,455 options at $4.70 and Sep 2 delivery of 864,880 shares settling his Sep 2023 prepaid forward (a real disposition of shares he was paid $18,718,918 for in 2023 — settlement, not a new sale); director Moore’s Aug 19 sale of 10,759 shares at $24.05 under her May 2026 10b5-1. Kalish’s total encumbrance: 4,201,574 pledged shares (Mar 2026 proxy) plus 1,912,236 shares under a new May 15, 2026 prepaid forward (delivery May 18, 2029) = 6,113,810 shares. Robins pledges a further 3,153,552 and controls 88.3% of the vote through Class B.

🐂 Bull quote — Robins, Nov 7, 2025 (Q3 2025 call, the guide-cut call): “most bullish I’ve ever felt about the future.”
🐻 Bear quote — Robins, May 3, 2024 (Q1 2024 call), on state taxes: “the cost has to get absorbed by the consumer.”

Moat & durability

Fisher’s skeleton, applied to the moat

Balance sheet & capital returns

The bridge, enumerated once

As filed, Jun 30, 2026 (Q2 10-Q): funded debt $1,857.5M = 0% convertible notes due 2028, $1,265.0M principal (conversion price ≈ $94.85; capped calls to $135.50) + Term B due 2032, $592.5M (SOFR + 1.75%, weighted average cost 5.39%). Cash and equivalents $983.9M; net debt $873.6M = 1.75× TTM adjusted EBITDA ($499.2M). Book equity $569.4M. Restricted cash $8.6M; user-reserved cash $395.0M against user liabilities $840.3M (segregated player funds, not netted). No dividend, ever.

Pro-forma (the alternative bridge, printed because the assumption matters): the Aug 25, 2026 amendment (8-K, acc. 0001104659-26-100812) added a $700M Term B due 2033 at SOFR + 2.00%, priced at 99.5 (≈ $696.5M of proceeds), and replaced the $500M revolver due 2029 with a $750M revolver due 2031 (undrawn at last report). The filing earmarks proceeds for opportunistic repurchases of a portion of the 2028 converts and general corporate purposes. Until a repurchase is reported, the honest pro-forma is debt $2,557.5M, cash unchanged, net debt $1,573.6M = 3.15× TTM adjusted EBITDA, EV $11,160.1M — the bridge the Downside Checklist grades. The Nov 5 10-Q is the first document that can retire this assumption either way.

Capital returns: cumulative buybacks $773.8M at a ~$34.24 average through Jun 30, 2026; $1,226.2M of authorization remains (12.8% of the Class A count at $19.31). The program’s record in one line: it has spent three-quarters of a billion dollars and the share count is higher than when it started, because SBC and issuance refill it. Auditor rotation: BDO → Deloitte for FY2027 (8-K Sep 25, 2026, no disagreements).

Charts · Qualtrim

Charts

Qualtrim chart of DraftKings annual revenue, 2017–2025, climbing from under $0.3B in 2017 to about $6.05B in 2025, with a 1-year CAGR of +27.0% and a 5-year CAGR of +58.0%
Revenue — the compounding the core bar leans on.
Qualtrim chart of DraftKings annual free cash flow, 2017–2025, negative every year through 2023 — about −$730M at the 2022 trough — before stepping up to about $408M in 2024 and about $645M in 2025
Free cash flow — positive since FY23; SBC is charged against it in every bar.
Qualtrim chart of DraftKings annual shares outstanding, 2017–2025, flat near 185M through 2019, then climbing every year to about 495M in 2025 despite the buyback program, with a 1-year CAGR of +2.9%
Shares outstanding — the count the buyback program has not yet reduced.

Pabrai Downside Checklist

The veto gate

CategoryItemVerdict
Valuation The governing bar (+14.7%/yr reported OE) is 2.4× the most recent delivered rate (+6.2%, FY25 → TTM); the historical mistake this descends from is paying a compounder price for a conversion that hasn’t happened FLAG — sized: core-only downside −13.8% to −42.5% prints on the page; the flag stands until delivered OE growth closes on the bar
Leverage As-filed net debt 1.75× TTM adjusted EBITDA passes; the pro-forma bridge is 3.15× on an unverified proceeds-offset assumption FLAG — surfaces in the verdict box. Retires when the Nov 5 10-Q shows converts actually repurchased
Management & ownership Founders sold ≈ $363.0M, bought $0; 6,113,810 Kalish shares pledged or under forwards; the CEO controls 88.3% of the vote with no economic Class B stake FLAG. The C+ grade and the C− alignment sub-grade are this flag, priced into the read
Moat Tax ratchet compressing the margin the moat earns; the growth vector’s legality decided by courts FLAG — the binary surfaces in the verdict box. The licensed-core moat itself passes
Bias The desk’s own: a 52-week-low price invites a “cheap” reflex; the TAM narrative invites story-over-series; the $34.24 average buyback price invites anchoring FLAG — mitigated, not cleared: bars are computed from filings, the delivered series prints beside each bar, and the kill attempt leads the body

No flag is waived. Two (leverage, binary) are unaddressed by any evidence in hand and therefore sit in the verdict box, per the standard.

Checkpoints

Numeric, set Oct 16, 2026, before the prints

Nov 5, 2026 — Q3 2026 print

  1. Q3 adjusted EBITDA — pass ≥ $209M (even-split pace of the $418–618M H2 requirement) / fail < $150M.
  2. Share count — pass ≤ 495.0M / fail ≥ 496.5M (no fall from 496.454M).
  3. Q3 buyback dollars — pass ≥ $75M / fail < $25M (Q2 pace was $55.6M).
  4. SBC as % of revenue — pass ≤ 6.0% (management’s own guide) / fail > 6.5%.
  5. Predictions revenue breakout — disclosed = pass; still bundled in “Sports” = fail (binary observable).
  6. Post-refi balances — converts repurchased (any amount) and/or revolver drawn: report actuals (retires or confirms the pro-forma bridge).

Feb 2027 — Q4 / FY26 print

  1. FY26 adjusted EBITDA vs the $700–900M guide — pass ≥ $700M / fail < $700M.
  2. Year-end share count — pass < 490M (net shrink ≥ 1.3%: the buyback credit is earned) / fail ≥ 496.5M.

Corrections

Corrections to the prior edition (dated)

Gaps & completeness

Stated plainly

Stated plainly: (1) Predictions’ revenue, take rate, market-making P&L and customer overlap are undisclosed — the decisive segment cannot be verified, only bounded (core-only grid, Legal). (2) Post-refi balances (converts repurchased? revolver drawn?) do not exist until the Nov 5 10-Q. (3) No company-stated dollar impact of the Illinois per-wager fee exists; analyst figures (~$79–80M, inconsistently attributed) are refused as fact. (4) Jackpocket/GNOG standalone returns are unverifiable — the 10-K states segment disclosure is impracticable. (5) Michigan’s per-wager proposal final disposition and the Chicago tax suit’s outcome post-Mar 2026 are unconfirmed. (6) Management’s ~1% overlap and 80–90% professional-volume figures are assertions, flagged wherever used. (7) Q3 2026 results do not exist until Nov 5. Completeness: every material figure in the v3 dossier (report-v3v4-2026-10-16.md) appears in the section named in the dossier’s completeness note (completeness-note-v3-2026-10-16.md), which also carries the computed-but-unpublished register and the SWOT-migration attestation — all 22 internal/external factors from the prior edition carried to their mapped homes (verdict box, drivers, Fisher skeletons, Key Debates, Downside Checklist); none cut. Twelve quarters of earnings calls (Q3 2023–Q2 2026) were read in full and are incorporated — quotes dated throughout; there is no transcript exception for this name. The management grade is re-verified, not inherited: Form 4 sweep extended to Oct 16, 2026, latest proxy (DEF 14A, Mar 26, 2026) re-read, buyback/count re-derived, calls since the grade date checked.

Sources

Where this comes from

SEC EDGAR CIK 0001883685: FY2025 10-K (Feb 13, 2026, acc. 0001883685-26-000013); Q2 2026 10-Q (Aug 7, 2026, acc. 0001883685-26-000029) incl. Item 5 (Kalish May 2026 forward); Q2 earnings release 8-K Ex 99.1 (Aug 6, 2026); credit-amendment 8-K (Aug 25, 2026, acc. 0001104659-26-100812); auditor-change 8-K (Sep 25, 2026, acc. 0001883685-26-000034); DEF 14A (Mar 26, 2026, acc. 0001104659-26-035176); Form 4 XMLs (aggregation Jan 2024–Oct 13, 2026 + refresh sweep Sep 1–Oct 16, 2026; submissions index re-pulled Oct 16 — latest filing Oct 2, 2026); EDGAR company facts (FY21–FY23 series). Transcripts: 12 quarters, Motley Fool ×5 / MarketBeat ×7 full text, via the desk transcript library. Legal: Supreme Court docket No. 26-299 (re-checked Oct 16, 2026); circuit rulings and CFTC Oct 9, 2026 releases (RIN 3038-AF81 / AF82). Price: $19.31 = Thu Oct 15, 2026 close (Yahoo chart API pull and Finnhub previous-close corroboration, Oct 16, 2026; intraday Oct 16 traded lower — the page is priced on the last completed close). Tracker figures (PM Pulse/Aldrin via SportsBookReview; DeFi Rate) are Tier 3 and labeled wherever used. No analyst estimates in any model input.