- The sportsbook giant launched its prediction markets platform on Friday
- It’s available in 38 states, including some where sports betting isn’t permitted, such as California, Georgia, and Texas
- Trades will be cleared through a CME Group exchange, not through Railbird
DraftKings (NASDAQ: DKNG) announced Friday that its eponymous prediction markets platform is live, marking the entry of another sportsbook behemoth into the world of yes/no derivatives.
DraftKings Predictions, which the company previewed two months ago, is clearing trades through CME Group (NASDAQ: CME), not Railbird Technologies, which DraftKings acquired in October. DraftKings notes it “plans to connect to multiple exchanges.” CME is a partner of FanDuel Predicts, the prediction market offering from the sportsbook operator of the same name.
DraftKings Predictions plans to connect to multiple exchanges, beginning with CME Group at launch, to give eligible customers the greatest possible depth and breadth of markets, including global benchmarks, economic indicators, and sports contracts,” said the company in a statement. “This will include the planned rollout of recently acquired Railbird Technologies Inc. and its wholly owned subsidiary, Railbird Exchange, LLC, which will broaden available markets, enable product innovation, and deliver advantaged economics over time.”
The Boston-based company said its event contracts platform will appear in the various mobile application stores as its rollout is finalized over the coming days.
DraftKings Predictions Available in 38 States, but Details Matter
In the press release, the gaming operator confirms DraftKings Predictions is available in 38 states, which expands “the company’s total addressable market.” However, DraftKings isn’t making the sports contracts driving prediction markets to prominence available in all of those states.
Sportsbook operators entering the event contracts arena are looking to dance on both floors and are attempting to avoid the regulatory headaches of offering yes/no derivatives in states where sports wagering is currently permitted. So of the 38 states in which DraftKings Predictions is available, all of the platform’s markets will be available in 16, including California, Texas, Florida, and Georgia.
DraftKings Predictions won’t offer sports derivatives in more than a dozen states, but customers will be able to wager on economic and political events, among other offerings, in those jurisdictions. That group includes major sports betting markets such as Michigan, New Jersey, and New York. Connecticut residents will only be able to trade financial contracts on the platform.
The “no-go” zones include Arizona, Illinois, Nevada, Ohio, and Pennsylvania. Last week, Arizona regulators pulled Underdog’s fantasy sports license due to that company’s prediction markets push, and it’s believed the state will extend that treatment to other operators, though some analysts view DraftKings and FanDuel as safe in that state.
Prediction Markets Competition Escalating
Already rising, prediction markets competition escalated in significant fashion this week. Not only did DraftKings make its move, but Coinbase Global (NASDAQ: COIN) and Robinhood Markets (NASDAQ: HOOD) unveiled plans to move deeper into the event contracts space.
Sportsbook operators such as DraftKings and FanDuel could be credible rivals to companies such as Kalshi because the gaming operators have established customer bases and brands that resonate with bettors. DraftKings also has media partnerships (ESPN and NBC) that prediction market operators are attempting to establish.
“Along with our operational footprint, marketing and analytics infrastructure, and advanced in-house technology, we believe we are uniquely positioned to lead this space over the long term,” said Corey Gottlieb, DraftKings’ chief product officer, in the statement.
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