DraftKings seems to be getting ready to jump into the prediction market arena. The company has registered a new entity, DraftKings Predict, with the National Futures Association (NFA). This step shows that DraftKings wants to grow beyond regular sports betting into a market that is catching the eye of both regulators and big players in the industry.
DraftKings CEO Signals Interest in Prediction Markets
The news outlet The Closing Line first reported the registration of DraftKings Predict, known as Gus II LLC. The NFA acts as the self-regulatory body for the US derivatives industry operating under the CFTC‘s supervision.
This move hints at DraftKings’ interest to expand into prediction markets. These markets let people bet on real-world event outcomes, like elections or economic indicators. While the exact offerings of DraftKings Predict remain unclear, experts view this registration as a big step. It seems to prepare for possible changes in regulations.
Jason Robins, DraftKings’ CEO, has shown keen interest in the potential of prediction markets. During the company’s end-of-year earnings call, he said DraftKings keeps a close eye on this area’s progress. He echoed this view at a Morgan Stanley event, stressing that the company sees prediction markets more as a chance to grow than a threat.
Robins also pointed out the upcoming CFTC meeting that will tackle rules for sports-related event contracts. This meeting should play a big part in deciding if sports-related bets will count as prediction markets or fall under gambling.
Regulatory Uncertainty Clouds Future of Prediction Markets in the US
The rules for prediction markets remain unclear. The CFTC has shown doubt about prediction markets involving politics and sports. However, new people joining the commission, like Brian Quintenz — who used to be on the board of Kalshi, a prediction market platform — hint that views might be changing.
At the same time, state regulators have voiced worries. Nevada’s Gaming Control Board became the first state to issue a cease-and-desist order to a prediction market platform. This move shows possible roadblocks for companies like DraftKings, which might need to deal with both state and federal rules before they can start their prediction market services.
Though DraftKings has not shared specifics about DraftKings Predict, its NFA registration shows it means business. If regulations line up, the company might become a big name in prediction markets using its current sports betting setup to grow into this new area.
