DraftKings Enters Regulated Prediction Market With Standalone App

DraftKings has taken a major step beyond traditional sports betting. The company recently launched a standalone predictions application. This marks its formal entry into federally regulated prediction markets. 

The move places the company under the oversight of the U.S. Commodity Futures Trading Commission (CFTC). It opens a new path for growth in markets where online sports betting remains restricted.

A New Product Separate From Sportsbook Operations

The new platform, known as DraftKings Predictions, operates independently from the company’s core sportsbook business. It allows eligible users to trade event-based contracts linked to real-world outcomes. 

At launch, these contracts cover sports and financial market events. The app is set to become available across major app stores in the coming days, widening access for users across the country.

By keeping the predictions app separate, DraftKings aims to clearly separate regulated event trading from its traditional betting services. At the same time, the company is using its strong brand and technology experience to support the new product.

The launch comes after DraftKings paid $10 million to settle a class-action lawsuit claiming its NFTs were unregistered securities.

DraftKings Expands Reach Beyond Betting-Legal States

DraftKings executives have pointed to prediction markets as a strategic way to reach customers in states where online sports betting is still illegal. During a November earnings call, CEO Jason Robins said prediction markets can help DraftKings reach more customers. 

He added that the new offering would not replace or harm the company’s sportsbook business. Event contracts on the new app will be available in 38 states. This includes large and influential markets such as California and Texas, where online sports betting has not yet received legal approval.

At launch, DraftKings will route trades through the CME Group, a top derivatives marketplace. The company plans to expand both liquidity and the range of available markets over time.

DraftKings has also stated that Polymarket will act as the designated clearinghouse for the predictions platform. This follows DraftKings’ acquisition of Railbird Technologies, a CFTC-regulated exchange operator. 

Growing Interest in Prediction Markets

Prediction markets have gained significant attention in recent months. This is particularly as crypto platforms expand into sports-related contracts and attract rising trading activity. Kalshi and Polymarket have emerged as leading players in this sector.

Kalshi has recently widened its lead, recording more than $5.8 billion in trading volume in November, compared to around $1.8 billion on Polymarket. Onchain data shows that December volumes reached roughly $3.4 billion for Kalshi and about $1.25 billion for Polymarket.

With the launch of DraftKings Predictions under federal oversight, DraftKings aims to unlock new users, expand into restricted states, and participate in a fast-growing segment.