DraftKings Expands into Prediction Markets with DraftKings Predict

DraftKings, one of the biggest names in online sports betting, is moving into prediction markets, a growing sector that allows users to wager on real-world events beyond sports. On March 12, 2025, the company registered "DraftKings Predict" with the National Futures Association (NFA), signaling its intent to enter this space. If approved, the platform would let users bet on a wide range of topics, including betting on politics, weather, and even player injuries.

The move has caught the attention of both gambling and financial circles. Prediction markets have been around for years through platforms like PredictIt and Kalshi, but they are gaining mainstream traction. Some even argue that these markets can predict real-world outcomes more accurately than traditional polling. With DraftKings looking to merge traditional sports betting with this broader market, the company is positioning itself as a leader in this evolving space.

A New Era of Betting

Unlike sports betting, where wagers are placed on game outcomes and point spreads, prediction markets allow bets on almost any real-world event with a definitive result. DraftKings has been preparing for this expansion, forming Gus II LLC on July 30, 2024, as the business entity behind "DraftKings Predict." While NFA registration is still pending, approval would make DraftKings the first major sportsbook to integrate prediction markets into its platform.

The timing of this move isn’t random. Since the 2018 Supreme Court ruling that allowed states to legalize sports betting, the industry has grown rapidly, with 38 states and Washington, D.C. now allowing it. DraftKings reported $4.77 billion in revenue over the past year, including a 39% increase in Q3 2024, according to Investing.com. However, prediction markets present a potential workaround to state-by-state gambling regulations, offering a federally regulated alternative.

All eyes are now on the Commodity Futures Trading Commission (CFTC), the key regulator for prediction markets. The agency, now led by Brian Quintenz, a former Kalshi board member, has fueled speculation that regulatory barriers may loosen. A CFTC roundtable discussion on April 30, 2025, could be a turning point, determining whether DraftKings can launch its new platform without needing state-by-state approvals.

DraftKings' Expansion Strategy

DraftKings' move into prediction markets is part of a broader strategy to diversify its offerings. The company already operates sports betting and online casinos in 22 states and recently secured a $500 million loan, reportedly for further expansion. CEO Jason Robins has expressed confidence in prediction markets, viewing them as a complement rather than a threat to traditional sports betting.

Financial projections 2025 estimate $645 billion in revenue and $900 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). Analysts believe that with more states legalizing betting, DraftKings' total betting handle could grow by 21%, with prediction markets adding a new revenue stream.

Regulatory Hurdles and Industry Pushback

Despite the opportunity, DraftKings faces regulatory challenges. Prediction markets sit in a gray area between gambling and financial futures trading, which has sparked concerns from tribal casino operators and state gaming commissions. On March 4, 2025, representatives from several Native American tribes raised concerns with the CFTC, arguing that allowing prediction markets could impact tribal casino revenues. If users can bet on anything from their phones, visiting a physical casino is less of an incentive.

The CFTC has historically been cautious about prediction markets, wary of the blurred lines between gambling and financial speculation. If DraftKings' request to the NFA is denied, it could stall "DraftKings Predict" indefinitely. Additionally, any uncertainty surrounding the platform could impact investor confidence. DraftKings’ stock was valued at $39.41 as of March 7, 2025, and regulatory hurdles or delays could create further volatility.

Conclusion

DraftKings’ move into prediction markets is a bold step toward expanding its footprint beyond sports betting. Whether it succeeds depends on regulatory approval and market acceptance, but the company has the resources and industry experience to navigate these challenges. The upcoming CFTC decision will be key, if approved, DraftKings could pioneer a new segment of real-world betting. If not, the company may have to rethink its approach. Either way, 2025 is shaping up to be a pivotal year, and for those watching the future of gambling, this is a development worth keeping an eye on.