DraftKings announced last week it would offer sports event contracts, becoming the first major U.S. sportsbook operator to announce plans to run such a platform at a time when prediction markets are facing legal battles in multiple states.
The move presents a first-move advantage opportunity for DraftKings but it could come with regulatory risks to its current offerings.
- DraftKings will launch its new prediction market, DraftKings Predictions, within months, likely before the Super Bowl.
- The platform will debut in select non-sportsbook states like California and Texas, with limited parlay options at launch.
- Despite potential regulatory risks, CEO Jason Robins says DraftKings will pursue prediction markets as a major growth opportunity.
Here’s everything we know about DraftKings Predictions:
Launch in the ‘coming months’
DraftKings CEO Jason Robins did not give a formal timeline for the prediction market launch other than within “the coming months."
The company faces intrinsic logistical hurdles launching such a platform. And while Robins dismissed regulatory concerns, it is undoubtedly still a factor in the launch, which will likely spark future legal challenges.
“Our fiscal year 2025 guidance ranges now include the expected launch of a predictions market offering, which we're excited about as we begin to look ahead to 2026,” Robins said during DraftKings’ third-quarter earnings call Friday.
Robins would clearly like the platform to go live during the current season for the NFL, the most wagered-upon league for sportsbooks and the single largest generator of prediction market volume across all areas, not just sports. This upcoming February’s Super Bowl, the single sporting event poised to draw the largest gambling handle and event contract volume in the industry’s nascent history, is undoubtedly a milestone that DraftKings will work to have its prediction market live.
Parlay capability limited
Prediction markets, which require users to buy and sell contracts against another user instead of the sportsbook operator, offer less room for parlays, which have far higher profit margins than traditional straight bets. Robins said parlay capacity will be limited at the launch but he hopes DraftKings Predictions will be able to grow those offerings in the future.
“I think parlays are just challenging with predictions because it's liquidity-based so you can’t do some prepackaged stuff,” Robins said during last week’s corporate earnings call. “I think that could work, but to be able to really have a parlay offering that looks anything like what you'd find at an online sportsbook just isn't possible.”
State targets selected
Partially because prediction markets have a lower revenue potential than traditional sportsbooks, Robins said the company is targeting a select, unspecified group of states without access to DraftKings sports betting platform for initial launches.
This would likely include California and Texas, which combined are home to more than 20% of the U.S. adult population. Other high-population states without legal online sports betting, including Georgia and Minnesota, could also be at the top of DraftKings’ target list.
Lawmakers in these states have considered legalizing sports betting. It remains to be seen how the launch of a sports-event contract, which multiple existing legal sports betting jurisdictions have considered an illegal form of gambling, could hurt sportsbook legalization efforts.
Marketing spend
DraftKings was among U.S. sportsbooks that spent hundreds of millions of dollars annually in free bets and other promotions in the first few years after sports betting was legalized outside Nevada. Robins said he doesn’t expect a similar blitz with DraftKings Predictions.
Draftkings’ announcement to enter sports prediction markets in states where they do not have a license is a very smart move on the chessboard.
— SigmaSquirrel (@SquirrelSigma) November 6, 2025
They’ll monetize where there was no prayer for legalization in the next 24 months, and dare any regulated state to kick them out.
“I still think it will be very limited compared to what you would find in our traditional sports betting products,” Robins said Friday.
The DraftKings founder and CEO also said that DraftKings’ existing reputation from its sportsbook in more than two-dozen states as well as its free-to-play offerings and daily fantasy contests gives it a nationwide brand recognition that will help reduce the need for excessive marketing spend, especially compared to the massive campaign around its sportsbook.
Railbird future
DraftKings acquired federally licensed Railbird as the platform to launch its prediction market nationwide. For now, the company plans to continue operating Railbird through and after its self-branded DraftKings Predictions market goes live.
Robins stressed several times in last week’s call that data would drive the company’s marketing decisions. The relative success of both platforms will surely help determine if the company invests more heavily in one of the two, or if it is comfortable operating separate platforms.
Non-sporting events
DraftKings plans to offer event contracts on elections, pop culture, and a host of other offerings now available on existing prediction markets including Kalshi, Polymarket, and a growing number of competitors. Still, Robins said sports, which make up the bulk of the existing markets’ volume, will remain the focal point.
“I know elections are popular, too, and in certain places we'll be able to offer that as well, but I think that for the most part the volume and opportunity is going to be in the sports space,” Robins said Friday. “That’s not to say there couldn't be other innovations and things that create opportunities over the long term, but that's less proven, and I think something that at this point we don't have as much certainty in.”
Revenue and market share potential
When asked by financial analysts during Friday’s call, Robins didn’t offer any revenue or specific market share projections, stressing it was far too early in the launch process to make such estimates. Still, he made clear he expects DraftKings, the nation’s No. 2 online gaming operator by revenue market share, to be a major player in the space.
“We will pursue this opportunity. We will compete and we will win,” Robins said Friday. “For the same reasons that we have been successful competing in the sports betting industry, we expect to succeed here.”
Potential regulator pushback
This remains arguably the most important question to DraftKings Predictions’ future.
Several gaming state regulatory bodies had warned sports betting license holders they could face consequences if they offered prediction markets, even in other states. Though there have been few specifics, many state regulatory bodies are permitted to fine a licensee or even ban them from operating if they violate the terms of their license.
Robins dismissed these concerns last week, saying he had talked to a number of state policymakers and was confident the prediction market move would not hurt their existing license agreements. Still, state regulatory bodies will undoubtedly be watching DraftKings – and potential future other sportsbook prediction market operators – to see if they are violating their license agreements.
