DraftKings CEO Jason Robins has spoken of the possibility of exploring prediction markets. It seems the company might be ready to take a firm step in that direction.
DraftKings’ leadership filed an application with the National Futures Association (NFA) for a new business to be known as DraftKings Predict.
The application date is July 30, 2024, meaning the move was made before the likes of Kalshi expanded their events contracts into sports events such as the Super Bowl.
DraftKings declined to comment when contacted by SBC Americas.
Robins is listed as an “indirect owner” of the proposed venture. DraftKings’ CFO Alan Ellingson is down as director and chief operating officer, and DraftKings co-founder Paul Liberman is denoted as director and CEO DraftKings Predict.
The NFA is the regulator for the Commodity Futures Trading Commission (CFTC).
DraftKings watching prediction markets closely
Robins said on DraftKings’ earnings call last month that he’s keeping a close eye on the emerging vertical and that “we have a keen interest in seeing how it plays out.”
The CFTC and Kalshi are still embroiled in a legal case, but the expectation is that prediction markets may find themselves in calmer waters moving forward. There have been suggestions that President Donald Trump’s administration will take a more amenable stance on events contracts, and Kalshi board member Brian Quintenz is Trump’s nominee to be the new CFTC chair.
“In the next couple of months, 60 days or so, there’s going to be a CFTC ruling and all sorts of other things,” added Robins last month. “So, I think we’ll know a lot more over the next few months.”
At a Morgan Stanley event this month, Robins spoke further on the issue. Replying to a question about events contracts, he said that “if there is an opportunity that presents itself, we want to make sure we’re prepared for it.”
Other sportsbook CEOs have thoughts
It’s not only DraftKings executives mulling over the opportunities that prediction markets might bring.
Peter Jackson, CEO of Flutter, the parent of DraftKings’ biggest rival FanDuel, said on an earnings call that, “we note the research and development on prediction markets and opportunities that may arise for us there.”
“We are monitoring the situation with these sports futures contracts closely,” he added. “The regulation is very fluid … It could be an interesting opportunity but I think it’s worth recognizing that the products themselves lack the richness of a true sportsbook offering.”
In early February, BetMGM CEO Adam Greenblatt pointed to his company’s parent firm Entain’s experience in legally offering election betting markets in Europe. BetMGM also offers political markets in Ontario.
“I think for us, it’s a watch and see,” he said at the time, in comments that primarily concerned election betting. “To the extent it represents an opportunity, we will certainly participate … We do see this as a potential opportunity. It’s very popular elsewhere in the world.”
Understandably, a common theme among big-brand sportsbooks is that they are waiting for legal and regulatory clarity.
All of the executives’ comments, as well as the DraftKings Predict filing, occurred before the Nevada Gaming Control Board became the first state regulator to issue a cease-and-desist order to Kalshi in an attempt to shut it down. Prediction markets have also been publicly opposed by the likes of the American Gaming Association.
