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DraftKings is stepping into new territory. The Boston-based gaming operator has officially acquired Railbird Exchange, a federally regulated prediction market, marking its move into one of the most talked-about areas in online wagering.
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Jason Robins, CEO and co-founder of DraftKings, said the acquisition aligns with the company’s expansion strategy. “We are excited about the additional opportunity that prediction markets could represent for our business,” Robins said. “We believe that Railbird’s team and platform—combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products—positions us to win in this incremental space.”
The purchase gives DraftKings access to the prediction market industry, where users can buy and sell “event contracts” tied to real-world outcomes such as political elections, cultural events, or financial indicators. These markets let participants speculate on “yes” or “no” outcomes—effectively trading opinions like assets.
Railbird’s federal license under the CFTC makes this move especially strategic. Unlike conventional sports wagering, federally regulated prediction markets operate under a different legal framework, though the lines have blurred in recent years.
The company’s upcoming DraftKings Predictions app will let users trade regulated event contracts across finance, culture, and entertainment. The platform’s flexibility, DraftKings said, could allow it to connect to multiple exchanges over time and expand into new categories.
Notably absent from DraftKings’ announcement was any mention of “sports.” That omission seems intentional. The legality of sports event contracts (or sports trading) under federal regulation remains a gray area.
Other CFTC-regulated platforms such as Kalshi and Crypto.com have already dipped into sports prediction markets, offering event contracts on sporting outcomes nationwide. However, several of these operators are now entangled in legal disputes with state gambling regulators who argue that such products effectively constitute unlicensed sports betting.
Given DraftKings’ current licensing in 28 states, plus Washington, D.C., and Ontario, it’s clear the company doesn’t want to risk its standing with regulators by moving too quickly. Analysts view this as a smart play—entering the space while maintaining compliance with state-level gambling laws.
The move also follows an industry trend. FanDuel, DraftKings’ main rival, recently partnered with the CME Group to develop its own prediction market product. While both companies have remained vague about including sports contracts, the overlap between prediction markets and betting is expected to grow over time.
DraftKings described its acquisition of Railbird as part of a “broader strategy to enter prediction markets,” adding that the deal will “expand its addressable opportunity through regulated event contracts.” The company emphasized that Railbird’s proprietary technology gives it “a foundation for future growth and long-term product differentiation.”
As for timing, DraftKings Predictions is expected to go live in the coming months.
It’s a federally regulated prediction market licensed by the Commodity Futures Trading Commission (CFTC), now owned by DraftKings.
Not yet. The company avoided mentioning sports, likely due to ongoing legal uncertainty around federally regulated sports contracts.
DraftKings Predictions is slated for release in the next few months.
To expand beyond traditional sports betting into event-based markets that cover politics, entertainment, and finance.