Sports betting operator DraftKings has filed to register ‘DraftKings Predict’ with the National Futures Association (NFA).
The filing is for Gus II LLC, trading as DraftKings Predicts. If it gains regulatory approval, DraftKings would be able to start offering event-based betting markets.
How Prediction Markets Differ from Traditional Sports Betting
Unlike traditional sports betting, which is legalized and regulated on a state-by-state level following the repeal of PASPA, events markets are regulated at a federal level by the Commodity Futures Trading Commission (CFTC). This allows sports events contracts to legally be ‘traded’ by anyone in 50 states under US regulation.
DraftKings has not publicly announced any plans to enter prediction markets, although many industry analysts predicted the move should regulators not intervene. This is because sports events contracts, once offered in prop-style and single-event format, closely resemble sports betting products without anywhere near the same level of regulatory scrutiny.
Jason Robins, DraftKings’ CEO, emphasized the company’s interest in prediction markets, stating: “It’s certainly something that we have keen interest in seeing how it plays out.”
In the same earnings call, Robins also suggested the company is keeping a keen eye on cryptocurrency. Crypto sportsbooks could become a reality with DraftKings, but the company is now happy to watch regulatory developments. “It’s also getting regulators comfortable with it because regulators typically are cautious around crypto in the states. Obviously, at a federal level, there’s a lot of pro-crypto deregulation, I think, coming,” Robins informed analysts.
It is likely that the filing is simply DraftKings hedging its bets. Kalshi was constantly in the headlines around the election of President Donald Trump, after it won a legal case against the CFTC and was permitted to offer event-based contracts relating to the American election. Political betting is prohibited by sports betting regulators across the country, with integrity concerns often cited.
State Resistance: Why Prediction Markets Face Pushback
Although sports event contracts have gained in popularity, they are starting to be met with resistance at the state level. Last week, the Nevada Gaming Control Board (NGCB) issued a cease-and-desist order to Kalshi, alleging that the company’s contracts constituted breaches of the state’s gambling legislation.
In addition, major industry lobbies, such as the American Gaming Association, have expressed significant concerns over the proliferation of prediction markets. The AGA argues that sports event contracts blur the lines between sports betting and financial speculation.
Although Kalshi does not accept cryptocurrency as a means of payment, the company offers several events contracts related to digital currencies.
At the time of writing, there are six markets related to Bitcoin, including over $200 million on the price of Bitcoin at 2 p.m. EDT. Lengthier prediction markets include “When will Bitcoin hit $150k?” and how high or low Bitcoin will get in 2025.
Given President Donald Trump’s pro-crypto stance, and promises of deregulation, Kalshi also offers an event market on whether or not President Trump will create a National Bitcoin Reserve in 2025.
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