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After months of speculation, leading sports betting operator DraftKings has confirmed its move into the prediction markets. The company announced on Tuesday that it has acquired Railbird, a derivatives exchange licensed by the Commodity Futures Trading Commission.
With this acquisition, DraftKings plans to launch a new mobile app called DraftKings Predictions in the coming months. This app will enable users to trade event contracts related to various markets, including finance, culture, and entertainment.
No mention of sports, yet
The last year has truly seen prediction markets hit amazing strides. However, this growth has not come without scrutiny, particularly regarding sports event contracts, which regulators in many states have raised concerns about.
Notably, DraftKings’ recent announcement regarding its acquisition of Railbird does not mention sports as part of its initial offerings. Instead, the platform is aiming to connect with multiple exchanges and “may expand into additional categories over time.”
DraftKings CEO and Co-Founder Jason Robins expressed enthusiasm about the potential of prediction markets, stating:
“We are excited about the additional opportunity that prediction markets could represent for our business. We believe that Railbird’s team and platform, combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products, position us to win in this incremental space.”
The deal was first reported in July, barely a month after the exchange received approval from the CFTC. Also speaking yesterday (Oct 21), Railbird CEO and Co-Founder Miles Saffran called the acquisition a transformational moment for the company.
Been long coming for DraftKings
The move into prediction markets has been in the works for a long time at DraftKings. Robins has indicated in recent earnings calls that they have been closely monitoring the space.
As early as summer 2024, the company filed an application with the National Futures Association (NFA) for a venture called DraftKings Predict. Although that initial application disappeared in March 2025, a new filing emerged on the NFA site this summer, highlighting renewed interest.
Robins emphasized during a call in August that being an early mover in the event contracts sector could offer significant advantages and confirmed that the company was actively exploring opportunities with its stakeholders and partners.
With the acquisition of Railbird, DraftKings seems to have confirmed its long-awaited entry and plans to use the team’s expertise and technology to enhance its prediction market platform. The company stated that Railbird’s infrastructure will provide them with “advantaged economics and long-term product differentiation,” setting the stage for a competitive entry into the fast-growing market.
Everybody is making a move into prediction markets
This Railbird purchase comes at a time when numerous operators are seeking to establish a foothold in the prediction market landscape.
DraftKings’ main competitor, FanDuel, announced a partnership in August with the derivatives marketplace CME Group to create a joint venture Futures Commission Merchant (FCM) platform. Although FanDuel’s announcement also did not mention sports, a legal rep from parent company Flutter confirmed that they are indeed considering sports offerings.
Last month, PrizePicks made headlines by becoming the first gaming operator to receive NFA approval to function as a licensed FCM. This status allows them to partner with entities like Kalshi to offer contracts on various events, including sports, all under CFTC oversight.
Underdog is currently awaiting NFA approval but has already begun offering sports contracts in 16 states through a technology deal with Crypto.com. Fanatics is another major player with a pending NFA application, while Kraken announced a $100 million purchase of Small Exchange last week.
Source: SBC Americas
