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A shift is underway in how fans interact with sports outcomes. DraftKings confirmed plans to introduce DraftKings Predictions in the coming months, an offering that edges closer to the growing world of event-based trading markets. The announcement follows the company’s acquisition of Railbird, a licensed prediction market platform that has been operating under federal regulatory frameworks.
Good to Know
DraftKings CEO Jason Robins addressed the subject during the company’s earnings call, noting that internal discussions and talks with policymakers shaped how the company approached the launch. He said:
“I think through the strength of those relationships and conversations, we got comfort in the approach that we’re taking,”
The announcement came after weeks of speculation in the industry. Operators, analysts, and regulators had questioned whether a major sportsbook would enter the prediction market space, given the legal and reputational stakes.
Prediction markets allow users to trade outcomes of future events, ranging from elections to sports results to entertainment award winners. Instead of placing a flat wager, participants buy and sell outcome shares that move in value as events progress. These platforms drew major attention during the 2024 presidential election cycle and gained another wave of interest when participants traded outcomes during the 2025 Super Bowl.
Sports event contracts now generate the largest share of activity across prediction exchanges. While these markets fall under federal rules, state-level gaming regulators argue that they resemble sports wagering and should require state licenses. That has triggered multiple legal disputes, some already moving through federal courts.
Many sportsbook operators avoided launching prediction markets because several state regulators suggested that offering these products could lead to penalties. There has also been skepticism regarding revenue potential, with operators prioritizing parlay-focused sportsbook models that produce higher margins.
DraftKings, currently one of the two largest U.S. sportsbook brands, broke from that caution. The company now views predictions as a strategic category that attracts a different user segment and creates incremental activity rather than replacing sportsbook wagers. Robins said:
“There are numerous data points from around the globe that validate that predictions in sports is relatively small and largely incremental relative to traditional sports betting. In actuality, we see predictions as a significant incremental opportunity.”
The decision places DraftKings ahead of rivals Kalshi and Polymarket in competing for mainstream user adoption. However, the move also increases regulatory risk. Sports made up the majority of DraftKings’ $4.8 billion in 2024 revenue, and state regulators have broad authority to apply fines or limit operating permissions.
Robins explained that DraftKings Predictions will launch only in states where the company does not currently run its sportsbook. This approach seeks to avoid conflicts with regulators overseeing existing gaming licenses.
Legal uncertainty will continue for years. Many expect the legality of prediction markets to eventually be decided at the Supreme Court level. Until then, large sportsbook operators must weigh the financial upside of prediction markets against the possibility of regulatory penalties.
DraftKings’ move also pressures FanDuel to respond. FanDuel parent Flutter Entertainment has already partnered with CME Group on a commodities-oriented prediction platform but has not announced sports contracts. With DraftKings now publicly committed, analysts expect questions during Flutter’s next earnings call about whether FanDuel will follow suit.
The decision by FanDuel will shape whether DraftKings enters this category alone or faces immediate competition from its largest rival.
A platform where users trade on event outcomes rather than placing traditional bets.
To avoid conflicts with gaming regulators in states where DraftKings already holds sportsbook licenses.
Yes. Prediction trading and traditional sportsbook wagering remain distinct products.
No. Availability depends on state-level authorization.
No. DraftKings describes predictions as additive engagement.