DraftKings Prediction Market App Will Focus on States Without Legal Sports Betting

Core Insights - DraftKings has acquired prediction market company Railbird ahead of launching its DraftKings Predictions mobile app, with the deal rumored for months [1] - Total weekly prediction market volume has surpassed $2 billion for the first time, indicating a surge in interest in prediction platforms [1] - A Certuity report estimates that prediction markets could reach $95.5 billion by 2035, with a compound annual growth rate of 46.8% [1] Company Developments - Railbird holds a designated contract market license from the Commodities Futures Trading Commission (CFTC), allowing it to self-certify and offer event contracts [2] - DraftKings' new app will provide users access to contracts related to finance, culture, and entertainment [2] - The prediction market industry has seen numerous deals and increased interest this year [2] Market Activity - Polymarket, a leading prediction market, acquired CFTC-licensed derivatives exchange QCX for $112 million [3] - Kalshi, another player in the prediction market space, is involved in legal disputes over jurisdiction with multiple states and Native American tribes [4] Regulatory Considerations - There are concerns from state betting regulators regarding the impact of DraftKings' acquisition on existing regulated gambling licenses [5] - DraftKings plans to focus its new prediction market app on states without legal sports betting [6] - The app will connect to multiple exchanges and may expand to include sports event contracts [6] Strategic Positioning - DraftKings CEO Jason Robins expressed confidence that the combination of Railbird's platform and DraftKings' scale and expertise will position the company favorably in the prediction market space [7]