Introduction to DraftKings Predictions
DraftKings is entering the red-hot prediction markets business, launching technology that allows users to trade contracts related to sports and financial events. The sports betting company announced the launch of DraftKings Predictions, a mobile app and web product regulated by the Commodity Futures Trading Commission.
Expansion and Regulation
Event contracts will be available for trading in 38 states, and the company plans to eventually expand beyond sports and finance into other markets such as entertainment and culture. DraftKings said its app, which is expected to be available in major app stores within days, will be connected to multiple exchanges, starting with derivatives marketplace CME Group.
Competition and Market Position
DraftKings faces growing competition from prediction markets — including Kalshi and Polymarket, now valued at $9 billion and $11 billion, respectively — that allow users to speculate on the outcome of sports and other events. DraftKings Chief Product Officer Corey Gottlieb said, “Together with our operational footprint, marketing and analytics infrastructure, and advanced internal technology, we believe we are uniquely positioned to lead this space for the long term.”
Acquisitions and Strategy
In October, DraftKings announced the acquisition of Railbird Technologies, a government-regulated prediction market. At the time, DraftKings said the deal supported its “broader strategy to enter prediction markets.” Some prediction market platforms that do not have sports betting licenses have been rejected by state regulators.
Criticism and Controversy
Others have criticized prediction markets’ move to facilitate speculation on sports. The president of the NCAA recently called out Kalshi for accepting bets on transfer decisions and student-athlete status, saying it would jeopardize “competitive integrity and recruiting processes.” Kalshi responded by saying it has no immediate plans to list these contracts.
Company Background
Headquartered in Boston, DraftKings was founded in 2012 as a sports entertainment and gaming company. Its offerings include a fantasy sports product and a mobile sports betting platform called DraftKings Sportsbook that allows customers to place bets on sports, players, leagues, and events.
