Key Moments:
- DraftKings has completed the acquisition of Railbird, a CFTC-licensed derivatives exchange.
- The company plans to introduce the DraftKings Predictions mobile app, focusing on event contracts outside of sports.
- Other industry leaders, such as FanDuel and PrizePicks, are also looking to establish a presence in the prediction market sector.
DraftKings Unveils Strategic Prediction Market Initiative
DraftKings has confirmed its acquisition of Railbird, a derivatives exchange regulated by the Commodity Futures Trading Commission, following months of industry speculation. Through this transaction, DraftKings aims to roll out its DraftKings Predictions app in the near future, allowing users to engage in event contract trading across financial, cultural, and entertainment markets.
Focus Starts Beyond Sports
While the growing popularity of prediction markets has attracted significant regulatory attention, especially for sports-related contracts, DraftKings has opted not to include sports in its initial product lineup. The company has indicated that it intends to interface with multiple exchanges and may broaden its category offerings in the future.
Leadership Signals Long-Term Commitment
DraftKings CEO and Co-Founder Jason Robins expressed optimism about venturing into 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 acquisition, publicly discussed in July following Railbird’s CFTC approval, was further praised by Railbird CEO and Co-Founder Miles Saffran, who called the deal a “transformational moment” for the firm.
DraftKings Sets the Stage for Market Entry
DraftKings’ interest in the prediction market sector has been building over an extended period, with Robins highlighting ongoing efforts to monitor the space in previous earnings discussions. The company submitted a National Futures Association application for a project named DraftKings Predict in summer 2024. Although that submission was withdrawn in March 2025, a subsequent filing was made this summer, indicating ongoing efforts in the sector.
During an August call, Robins underscored the company’s belief in the advantages of being an early entrant in the event contracts industry and discussed active exploration with stakeholders and partners. DraftKings now plans to leverage Railbird’s technology and team to fortify its market position, emphasizing the anticipated benefits of “advantaged economics and long-term product differentiation.”
Massive news: DraftKings acquires Railbird Exchange, confirming the company's plans to launch event contracts on 'DraftKings Predictions' in the coming months. pic.twitter.com/osqqavOrBb
— Prediction News (@PredictionNews_) October 21, 2025
Competitive Market Dynamics Intensify
DraftKings’ move comes as several notable companies deepen their involvement in the prediction market ecosystem. FanDuel, one of DraftKings’ primary competitors, recently announced a partnership with CME Group to develop an FCM platform, and although sports were not initially specified, a legal representative from parent company Flutter has confirmed consideration of sports contracts.
PrizePicks attracted attention by securing NFA approval to operate as a licensed FCM, opening the door to partnerships with platforms like Kalshi to provide a range of event contracts, including sports, under CFTC supervision. Meanwhile, Underdog is pending NFA approval but is already facilitating sports contracts in 16 states via a technology arrangement with Crypto.com. Fanatics is awaiting a decision on its NFA application, and Kraken has expanded into the sector by acquiring Small Exchange for $100 million.
Industry Activity Overview
| Operator | Recent Action | Status/Notes |
|---|---|---|
| DraftKings (NASDAQ: DKNG) | Railbird acquisition | Planning new DraftKings Predictions app; no sports at launch |
| FanDuel | Partnership with CME Group | Developing FCM platform; sports under consideration |
| PrizePicks | NFA approval as FCM | First gaming operator with this approval; includes sports contracts |
| Underdog | Awaiting NFA approval | Already offering sports contracts in 16 states via Crypto.com |
| Fanatics | Filed NFA application | Approval pending |
| Kraken | Acquired Small Exchange | Purchase valued at $100 million |
- Author
Daniel Williams
