DraftKings Inc. is officially getting into the prediction market game.
- DraftKings has acquired the federally regulated Railbird Exchange to enter the prediction market space.
- The company plans to launch a mobile app called "DraftKings Predictions," which will allow users to trade event contracts on real-world outcomes in finance, culture, and entertainment.
- This move positions DraftKings to compete with rivals like FanDuel in the growing prediction market sector while avoiding sports event contracts due to regulatory concerns.
The Boston-based online gambling operator announced on Tuesday that it has acquired the federally regulated Railbird Exchange, paving the way for DraftKings to launch its own prediction market.
“We are excited about the additional opportunity that prediction markets could represent for our business,” said Jason Robins, CEO and co-founder of DraftKings, in a press release. “We believe that Railbird’s team and platform - combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products - positions us to win in this incremental space.”
The financial terms of the deal were not disclosed. Analysts at investment bank Jefferies said this suggested "that the upfront purchase price was likely immaterial, and that there could be an earn-out associated with the transaction."
DraftKings' purchase of Railbird, which is regulated by the Commodity Futures Trading Commission (CFTC), now opens the door for the company to get a piece of the growing prediction market business.
The company said on Tuesday that it plans to launch a mobile app called "DraftKings Predictions" over the coming months. This, DraftKings said, will allow its customers "to trade regulated event contracts on real-world outcomes across finance, culture, and entertainment.”
DraftKings Acquires Railbird to Advance Future Growth in Prediction Markets
— DraftKings News (@DraftKingsNews) October 21, 2025
Today, @DraftKings announced the acquisition of Railbird, a federally licensed exchange designated by the CFTC. The acquisition supports DraftKings’ broader strategy to enter prediction markets,… pic.twitter.com/nrWicK9cUa
Prediction markets allow users to bet "yes" or "no" on outcomes tied to economics, politics, and, most controversially, sports. Users do so by buying and selling so-called "event contracts" tied to those outcomes.
However, what went unmentioned by DraftKings in Tuesday's press release was the word "sports."
This was likely a conscious decision by the online sportsbook operator given the legal uncertainty still swirling around federally regulated sports event contracts.
Other CFTC-regulated prediction markets, such as Kalshi and Crypto.com, are facilitating de facto sports wagering in all 50 U.S. states via their sports event contracts. However, the legality of those products has been challenged by state gambling regulators, and several court battles involving those watchdogs and prediction market operators are ongoing.
The decision by DraftKings to formally jump into prediction markets also follows a partnership formed between its chief rival, FanDuel, and the CME Group. FanDuel and CME are planning to debut an app that could be similar to the "forthcoming" DraftKings Predictions platform.
Nevertheless, neither FanDuel nor DraftKings have said yet that their prediction markets will offer sports event contracts. Even so, that could eventually change, DraftKings suggested on Tuesday.
“The product will have the flexibility to connect to multiple exchanges, enabling DraftKings to offer one of the broadest suites of markets to its customers,” DraftKings said of its future prediction betting platform. “Its offering may expand into additional categories over time, deepening customer engagement and extending DraftKings’ addressable audience.”
DraftKings Predictions is now expected to launch “in the coming months,” the company said.
“The acquisition supports DraftKings’ broader strategy to enter prediction markets, expanding its addressable opportunity through regulated event contracts,” DraftKings explained on Tuesday. “Railbird’s team and proprietary technology establish a strategic foundation for the Company’s future growth in this space, enabling advantaged economics and long-term product differentiation.”
Playing it safe
Still, the absence of the word “sports” from DraftKings' press release is notable. Also notable: some state gambling regulators have warned that betting companies could face future licensing trouble if they were to start offering sports event contracts.
DraftKings is currently offering legal sports betting in the U.S. in 28 states, plus Washington, D.C., and the Canadian province of Ontario. Therefore, the company has an interest in not upsetting its state regulators.
That said, the growth of federally regulated prediction markets and their sports businesses has been hard to ignore. This is due in no small part to those markets being federally regulated and available in states that have yet to legalize sports betting, such as California and Texas.
"With respect to sports, we believe that entry of regulated [online sports betting] operators in non-legalized states with predictions should apply pressure for those states with some interest in legalizing to do so, which would be positive for DKNG, et al," the Jefferies analysts wrote on Tuesday.
