DraftKings Enters Prediction Markets With Rollout of App and Web Product

DraftKings entered prediction markets with the launch of DraftKings Predictions, a standalone app and web product.

DraftKings Predictions is now available for eligible U.S. residents and will be added to all major app stores within days, the digital sports entertainment and gaming company said in a Friday (Dec. 19) press release.

The app and web product will offer event contracts across 38 states, according to the release. They will allow eligible customers to trade on real-world outcomes in sports and finance, and they will add other markets such as entertainment and culture in the future.

DraftKings Predictions, a wholly owned subsidiary of DraftKings, is a Commodity Futures Trading Commission-registered Introducing Broker, per the release.

“DraftKings Predictions is a significant milestone and reflects our ongoing commitment to delivering products that tap into the passion of our customers,” DraftKings Chief Product Officer Corey Gottlieb said in the release. “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 Predictions plans to connect multiple exchanges, including CME Group at launch and, later, DraftKings’ recently-acquired Railbird Technologies and its wholly owned subsidiary Railbird Exchange, according to the release.

DraftKings said in October that its acquisition of Railbird Technologies and Railbird Exchange, a federally licensed exchange designated by the CFTC, would enable DraftKings to offer regulated event contracts, supporting its strategy to enter prediction markets.

DraftKings CEO and co-founder Jason Robins said Nov. 7, during the company’s earnings call, that “sports is what’s driving” all the prediction market growth.

“People already associate us with sports … I think it’s going to be really tough for anyone to compete with us,” he added.

The launch of DraftKings Predictions may bring legal predictions gaming to many states that do not allow online sports betting, Robins said during the call.

“Nearly half the country’s population remains without access to legal online sports betting,” which makes federally regulated predictions a greenfield play for customer capture, Robins said.

PYMNTS reported in October that prediction markets are moving into professional sports, and sports betting platforms are moving into event-based contracts.