Sports Betting Trends: DraftKings & FanDuel's Q1 2026 Outlook

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Wall Street's Outlook on Sports Betting Companies in Q1 2026

The first quarter of 2026 has seen continued challenges for major sports betting companies like DraftKings and FanDuel, with their stocks down roughly 40% over the past year. Wall Street analysts do not anticipate significant changes in this downward trend as the quarter's financial results are expected soon. A significant factor in this downturn is the reduced overall betting volume and growth that these companies have experienced recently.

In past years, DraftKings and FanDuel consistently reported robust double-digit growth in the total amount wagered at their sportsbooks. However, in a notable shift, the betting handle in December saw a decline for the first time ever, and this trend appears to have continued into the first quarter of 2026 with a predicted 2% year-over-year decrease. This represents a stark contrast to previous periods of 15% to 20% quarterly growth.

The decrease in betting handle is partly attributed to the actual sports results and unfavorable comparisons to the previous year. For instance, during the last NFL season and March Madness, bettors won at unprecedented rates, which, paradoxically, stimulated betting volumes due to their increased winnings. Conversely, in the current year, sportsbooks have performed better in terms of winning bets and retaining funds, which has led to reduced betting activity as bettors lose more frequently.

Looking ahead, the upcoming World Cup this summer presents a significant opportunity for betting companies to reverse the declining trend in handle growth. It is estimated that around $1.8 billion will be wagered on the event, comparable to the betting volume seen during the Super Bowl. The performance of the US men's national team could be a major factor, potentially boosting betting volumes in the US, but also posing risks in terms of balancing the books.

Overall, the recent performance and future prospects of sports betting companies are influenced by a complex interplay of market dynamics, betting habits, and sports results, making it a challenging landscape for these businesses.