DraftKings Inks Pact With Crypto.com to Bolster Its Prediction Market Platform
Boston-based DraftKings recently announced an agreement with derivatives exchange Crypto.com, which will enhance its prediction market platform, DraftKings Predictions, currently operating in 38 US states.
Broadening Appeal
DraftKings Predictions is expanding its sports betting offerings by partnering with Crypto.com, using their service to broaden the number of sports event offerings on their platform. According to DraftKings, the new agreement “extends the platform’s prediction markets offerings and establishes the foundation for future categories, including politics.”
In the middle of last year, DraftKings purchased Railbird Exchange, a CFTC-licensed exchange but one that had been dormant prior to the purchase. But it was a way for the company to begin moving into the market for sports event contracts.
Seeing Momentum Building
Jeanine Hightower-Sellitto, senior vice president and general manager of DraftKings Predictions, said in a press release, “We’re continuing to build momentum behind DraftKings Predictions by leveraging our expertise across sports and technology and integrating additional CFTC-regulated exchanges like Crypto.com. This collaboration meaningfully expands customer access to trade on sports and a broader range of prediction markets and also reinforces our focus on delivering a more comprehensive and engaging experience as the product continues to evolve.”
DraftKings had been exclusively using content provided by the CME Group for its prediction platform, but the recent agreement with Crypto.com will “complement” its existing sports and financial markets.
Expanding Its Reach
DraftKings has been walking a tightrope since it announced it would launch a trading platform much like those that state gaming regulators are suing for offering sports event contracts in their respective jurisdictions.
The Boston-based bookmaker, along with fellow online sports betting powerhouse FanDuel and Fanatics, recognized an opportunity to join their prediction platform opposition but has vowed not to offer sports event contract trading in any state or jurisdiction where it operates its online sportsbook.
Therefore, in states like New York, DraftKings Predictions will only offer futures contracts on commodities and other events, but not sports. However, DraftKings can now offer sports betting in the biggest markets in the nation, like California and Texas, under the governance of the Commodity Futures Trading Commission.
Tribal Opposition Reignited In California
While tribal nations in California have opposed sports betting legislation, they have expressed their willingness to reach a future agreement with third-party platforms such as DraftKings and FanDuel when the time is appropriate to approve sports betting. But with DraftKings, FanDuel, and Fanatics now operating prediction platforms in the Golden State, the thaw in what was once an icy relationship may have returned to being frosty.
“We need some tribes to get together and sue under the Indian Gaming Regulatory Act [IGRA],” said Jason Giles, IGA’s executive director, at a webinar in December. “It’s a violation of IGRA and state tribal compacts.”
Giles went on to say, “It does look like a loophole folks have found in the Commodities Exchange Act.”
A Wry Warning From Tribal Leadership
In a bit of comedic irony, James Siva, chairman of the California Nations Indian Gaming Association, quipped that the tribes would open their own prediction markets if they cannot get them shut down in their states, which may lead to the entire industry getting shuttered, solving their problem in a roundabout way.
“That might be the thing that ultimately gets us shut down, because tribes are held to a different standard and criticized more than any other group. I wouldn’t be surprised if a tribe opened a prediction market and this whole thing gets shut down within a matter of months,” Siva chuckled.
