DraftKings CEO Jason Robins announced his company will be vigorously competing in the prediction market category and has vowed to eventually become the industry leader.
DraftKings Intends to Lead
The tug-of-war between prediction market leaders like Kalshi, Polymarket, and Crypto.com, to name a few of the most popular prediction platforms, and state gaming commissions continues to rage. However, a handful of mobile sportsbooks, like FanDuel and DraftKings, have decided to join the opposition and become an essential part of that market.
The dynamic duo of sports betting platforms are not the only two to pivot to the prediction market, but they are the most notable. During last week’s earnings call, DraftKings’ CEO Jason Robins announced that they would not sit idly by and watch this burgeoning market continue to flourish without their participation.
The Road Has Been Paved
The US Supreme Court’s overturn of PASPA gave DraftKings and FanDuel a significant competitive advantage in the sports betting market. Once that decision was reached nearly eight years ago, states were allowed to decide for themselves whether to legalize and license mobile sports betting platforms.
DraftKings and FanDuel had already compiled millions of daily fantasy sports customers in their respective databases that they easily converted to sports bettors once given the green light.
Robins sees a similar opportunity awaiting his company with a database replete with sports bettors, many of whom may be interested in an alternative way to conduct sports betting transactions, via contract trading against peers versus a traditional sports bet booked by the house.
DK Dares to Go There
At the risk of rankling the sensibilities of the state gaming commissions that license DraftKings, as well as opening old wounds with the tribal nations in California that defeated the sports betting measure in the Golden State, Robins insists that pursuing this new frontier is a prudent course of action for his company.
The caveat is that DraftKings, like FanDuel, has announced it would only offer DraftKings Predictions in markets where it does not operate its sportsbook.
Yet, some state gaming commissions are not too fond of sportsbooks operating their prediction platforms in any market, despite those platforms being allowed to do so under the federal authority of the Commodity Futures Trading Commission (CFTC).
State gaming agencies have issued cease-and-desist letters to the major prediction platforms. However, in most instances, federal court rulings have thus far allowed many of the companies to continue despite the absence of state gaming licenses, with only the federal CFTC license allowing them the legal authority to do so.
The ultimate legal litmus test as to whether these prediction markets will be allowed to operate in all 50 states resides with a ruling by the US Supreme Court, which is likely years away. Until then, the legal battle will continue to rage, but DraftKings wants its share of the predictions market pie, whether it be in the short term or for the long haul.
