After taking all the steps to be ready to offer sports-related event contracts, DraftKings is finally taking the step of offering them in certain states.
During the Boston-based gaming company’s Business Update for Q3 2025, it formally announced plans to enter the prediction market space “in the coming months”. DraftKings Predictions will serve as the company’s prediction market platform.
“In actuality, we see Predictions as a significant incremental opportunity,” said DraftKings CEO Jason Robins. “We are excited about our pending launch of DraftKings Predictions and its potential to expand our total addressable market.”
DraftKings Predictions will be available in markets where DraftKings doesn’t offer online sports betting to unlock potential new revenue-generating opportunities.
“Nearly half the country’s population remains without access to legal online sports betting, but there are several other companies offering federally regulated predictions in all 50 states,” continued Robins. “As growth in predictions continues, this may also motivate more states to legalize online sports betting and iGaming with reasonable regulation and taxation.”
DraftKings to launch prediction market amid concerns
DraftKings is entering the prediction market space as several gaming regulators take exception with sports event contracts and their resemble of betting as event contract providers adhere to CFTC standards and not state gaming rules. DraftKings is comfortable launching a prediction market after consulting with key stakeholders across the country.
“We really value and treat with the upmost importance our relationships with the regulators and policymakers in states where we are licensed and operate,” continued Robins. “We had numerous conversations with them and wanted to make sure that when we were acquiring Railbird and other things like that, they were hearing from us and understood what the rationale behind it was and how we are thinking about it.”
In Ohio, regulators warned licensed sportsbook about offering event contracts.
The Ohio Casino Control Commission notified operators that if they offer sports event contracts, their gaming licenses in the state could be in jeopardy for providing “online gaming” without state licensing. DraftKings has offered sports wagering in Ohio since 2023.
The Michigan Gaming Control Board sent a similar notice to licensed operators and suppliers. The board believes sports event contracts interfere with state law, also putting gaming licenses at risk in the state. The regulator’s stance against sports event contracts extends to operations both inside and outside of Michigan. The board is evaluating conduct by licensees that includes directly or indirectly offering access to sports event contracts. The regulator is also evaluating partnerships of license holders.
Still a lot to learn for DraftKings
DraftKings also noted the uncertainty of the prediction market space.
“The actual predictions product is unknown at this point in terms of what the longevity of customers will look like, what the spend will look like,” said Robins during the company’s Q3 earnings call. “The products themselves are super nascent, so I imagine retention initially is going to be a challenge. Over time, I think that it will get better.”
Recent deal allows DraftKings to offer event contracts
DraftKings is planning to offer sports event contracts and other markets after acquiring derivatives exchange Railbird Technologies in October for an undisclosed price.
“We will pursue this opportunity, we will compete and we will win,” added Robins. “For the same reasons that we have been successful competing in the sports betting industry, we expect to succeed here.”
DraftKings plans to leverage its partnerships with ESPN and NBCUniversal to expand the reach of its prediction market platform and other offerings. Earlier this week, DraftKings landed a deal with ESPN to become the media giant’s official sportsbook and odds provider. DraftKings secured the partnership after ESPN and PENN Entertainment terminated their online sports betting agreement just two years into a 10-year, $2 billion deal.
DraftKings rival to launch prediction market
DraftKings plans to offer event contracts in the coming months as rival FanDuel makes its first foray into the prediction market space behind a partnership with CME Group.
The derivatives marketplace formed a joint venture with FanDuel to operate a non-clearing Futures Commission Merchant, providing access to event contract trading. CME Group is licensed by the CFTC, but its joint venture with FanDuel will need CFTC approval.
