DraftKings is making a significant move into prediction markets with the launch of its new DraftKings Predictions app, signaling a potential expansion into crypto offerings as regulated event trading gains traction in the United States. The sports betting giant's app allows users to trade contracts on the outcomes of sports and financial events.
The DraftKings Predictions app is now available to users in 38 states, including those where sports betting is not yet legalized, such as California and Texas. This strategic move allows DraftKings to tap into a broader market, potentially capturing customers in areas where traditional sports betting remains restricted. The company ultimately plans to expand its prediction market offerings beyond sports and finance to include contracts linked to crypto, entertainment, and cultural events.
Corey Gottlieb, Chief Product Officer of DraftKings, stated that the launch of DraftKings Predictions "is a significant milestone and reflects our ongoing commitment to delivering products that tap into the passion of our customers". He further added, "We will create an unparalleled customer experience, leveraging key strategic relationships like ESPN and NBCUniversal to provide an authentic, real-time product that moves at the speed of sports".
DraftKings' entry into prediction markets is facilitated through regulated derivatives infrastructure connected to CME Group market standards. Trading will be conducted via Railbird Exchange, a derivatives venue acquired by DraftKings and registered with the U.S. Commodity Futures Trading Commission (CFTC). This allows DraftKings to offer event-based contracts within an established regulatory framework. As a CFTC-registered Introducing Broker and member of the National Futures Association, DraftKings' wholly-owned subsidiary, DraftKings Predictions, will offer event contracts across 38 states.
The prediction market space has been pioneered by companies like Kalshi and Polymarket. These platforms allow users to buy yes-no contracts on real-world events, ranging from Super Bowl winners to Federal Open Market Committee (FOMC) decisions. DraftKings faces growing competition from prediction markets, including Kalshi and Polymarket, that enable users to speculate on the outcome of sports and other events.
While DraftKings' prediction market offering is not currently built on blockchain or decentralized technology, the broader sector has gained momentum in recent years, largely due to crypto-native platforms. DraftKings' move into prediction markets signals a shift in industry positioning, as trading platforms and sportsbooks alike rush to get a foothold as those markets move closer to core sports betting products.
The launch of DraftKings Predictions includes incentives for users, offering a chance to win $1 million and a trade bonus for initial trades on sports contracts. The company emphasizes responsible trading practices, including deposit limits, cool-off periods, and educational resources. DraftKings said its app, which is expected to be available in major app stores within days, will connect with multiple exchanges, starting with the derivatives marketplace CME Group. Once they have a DraftKings account, users can enter the DraftKings Predictions app and start trading by clicking on the yes/no questions associated with an event, such as an NFL game, and deciding how much money they want to wager.
With DraftKings' increased visibility, mainstream exposure, and potential future integration of crypto-linked contracts, the company is poised to become a major player in the rapidly expanding prediction market landscape.
