DraftKings Considering Entrance into Prediction Market Realm
In the rapidly evolving world of finance and entertainment, two giants – Crypto.com and Robinhood – have found a unique advantage over gaming companies like DraftKings: they are federally regulated and can offer event contracts in all 50 states. This move has raised eyebrows in the sports betting industry, with some observers viewing the entry of crypto news platforms and cryptocurrency concepts like Crypto.com and Robinhood as a potential competitive threat to DraftKings and other sportsbook operators.
DraftKings, however, seems unfazed. Co-founder and CEO, Jason Robins, discussed the company's interest in the prediction market space at the Morgan Stanley Technology, Media & Telecom Conference earlier in March 2025. The company's intentions were further confirmed with the filing of "DraftKings Predict" by an entity associated with DraftKings (NASDAQ: DKNG) on March 12, 2025.
The filing, submitted by Gus II LLC, includes a DraftKings address and phone number, and names Jason Robins among others. If DraftKings Predict comes to life, co-founder Paul Liberman will be its chief executive officer.
The Commodity Futures Trading Commission (CFTC) is the regulatory body to which operators of prediction markets, including industry leader Kalshi, answer. The CFTC announced it would hold an event contracts roundtable approximately 45 days after February 5, 2025, to gather data and public input for regulation and oversight of prediction markets. The CFTC is expected to have an official ruling on DraftKings Predict in mid-April 2025.
It's not clear if that privilege would extend to DraftKings and other gaming companies that might enter the event contracts industry. The National Futures Association (NFA), which was granted designation as a "registered futures association" by the CFTC in 1981, plays a significant role in this regulatory landscape. NFA funding is primarily derived from membership dues and fees paid by exchanges, not taxpayer dollars.
Crypto.com began offering sports event contracts in December 2023 and expanded its related offering the following month. Robinhood teased a similar offering in advance of the Super Bowl but backed off to comply with a CFTC request. DraftKings, which is currently classified as a pending member of the NFA, is monitoring the prediction market space and is prepared to enter if an opportunity presents itself.
The European Commission is also set to hold a roundtable in April 2025 on the regulation and supervision of betting and prediction markets to gather comprehensive documentation including studies, data, expert reports, and public opinion. As the regulatory landscape continues to evolve, it will be interesting to see how DraftKings and other gaming companies navigate this new frontier.
