Fantastic Beasts and Where to Find Them. That is what I believe is replacing Dragon Challenge.
It doesn't make any sense that DC is about to close and we know nothing. Either Universal changed its mind or there are good reasons it is kept so quiet. We know quite a bit about SLoP, F&F and even Ninendo, but nothing about this? FB is not out yet. An attraction/mini land might even incorporate elements from the next couple of movies. This is the kind of thing rich authors and movie studios don't want public.
The more I think about it there is little sense of waiting to put it in the next park. All three movies will be out by then and Rowling might be moving on to the next Wizarding World trilogy. I doubt Universal can sell FB merchandise unless it signs up for a new attraction/land. Better to do this all while you can piggyback on the movie hype. Besides, as others have pointed out if you want the stars to film scenes for a ride now is the time while they are in character and they have the sets.
The rumors have been out there for a little while, but I have seen people that rarely talk about rumors talk about this with a bit of a wink wink. Others are keeping very quiet. I am guessing demolition permits are pretty quick. It is construction permits that tend to give things away, so if you are trying to keep something under your hat better to wait on permits til the last minute.
We know Fallon and Volcano Bay are coming in 2017. F&F was supposed to also until the tracking problem happened with the Kong ride system, so I doubt it was factored into 2018 plans. We also know Nintendo is coming out in 2020. So what is coming in 2018 and 2019? If this were just a Kong style refurb it would be done in 2017. I think FB and SLoP will fill those two years. Not sure which is what year. The second movie comes out in 2018, but that might be pushing the construction.
I have no inside information. I would think an indoor ride would make more sense so as not to intrude on the Hogsmeade atmosphere. There is enough space to do more than just a ride.