DraftKings hopes to score big with new prediction markets app
DraftKings is getting into the hot prediction markets business by launching technology that allows users to buy and sell contracts tied to sports and financial events.
DraftKings said its event contracts will be available for business in 38 states, and the company will eventually expand beyond sports and finance into other markets such as entertainment and culture. The sports betting company announced Friday that it will launch DraftKings Predictions, a mobile app and web product that will be regulated by the Commodity Futures Trading Commission.
“With our operational footprint, marketing and analytics infrastructure, and advanced in-house technology, we believe we are uniquely positioned to lead this space over the long term,” said Corey Gottlieb, chief product officer at DraftKings. expression.
DraftKings said its app, which is expected to be available in major app stores within a few days, will be connected to multiple exchanges, starting with the derivatives market CME Group.
Once users have a DraftKings account, they can go into the DraftKings Predictions app and begin trading by clicking yes/no questions on an event, such as an NFL game, and deciding how much money they want to bet.
More specifically, when users initiate trades, DraftKings acts as the broker, Jeanine Hightower-Sellitto, general manager of DraftKings Predictions, told CBS News.
“We execute this order and send it to the exchange for execution,” he explained.
DraftKings faces increasing competition from prediction markets (including Kalshi and Polymarket, currently valued at $9 billion and $11 billion, respectively) that allow users to speculate on the outcome of picks. sports and other events.
DraftKings in October announced Acquisition of Railbird Technologies, a federally regulated prediction marketplace. At the time, DraftKings said the deal supported its “broader strategy to enter the prediction markets.”
Some prediction market platforms that are not licensed for sports betting have faced objections from state regulators. Event contracts traded in markets are regulated differently than sports betting, which is illegal in certain states.
Others criticized the move by prediction markets to facilitate sports-related speculation. NCAA president Charlie Baker recently called out Kalshi: social media After filling out forms to accept bets on transfer decisions and student-athletes’ status, the company said it would threaten “competitive integrity and recruiting processes.”
