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By creating a new company, DraftKings Predict, with the National Futures Association (NFA), DraftKings has made a significant move toward entering the prediction markets industry. This registration, which was submitted on July 30, 2024, under Gus II LLC, links directly to DraftKings and provides its contact details and headquarters.
Paul Liberman, a co-founder of DraftKings, will be the CEO of DraftKings Predict, while Jason Robins, the CEO of DraftKings, will be an indirect owner, according to The Closing Line.
Prediction markets, which allow users to wager on future occurrences, are becoming more and more popular at the time of the migration. But there are still regulatory obstacles to overcome, especially when it comes to the Commodity Futures Trading Commission’s (CFTC) supervision.
The CFTC has historically been cautious about prediction markets, especially those involving politics and sports. However, with Brian Quintenz, a former Kalshi board member, now leading the CFTC, some analysts believe a more flexible approach could be on the horizon.
While DraftKings has yet to publicly announce its specific plans for DraftKings Predict, CEO Jason Robins has made his interest clear.
“It’s certainly something that we have keen interest in seeing how it plays out,” Robins stated during the company’s latest earnings call.
“So, I think there’s some, in the next couple of months, 60 days or so, there’s going to be a CFTC ruling and all sorts of other things, so I think we’ll know a lot more over the next few months,” he added.
Despite industry excitement, legal uncertainties persist. The CFTC is preparing to hold a public hearing on sports-related event contracts to assess the regulatory landscape. Meanwhile, the Nevada Gaming Control Board (NGCB) recently issued a cease-and-desist letter to Kalshi, questioning the legality of event-based contracts.
If federal regulators approve prediction markets, DraftKings could operate nationwide, bypassing state gambling laws. For now, DraftKings Predict’s NFA registration remains pending, awaiting the CFTC’s upcoming decision.