DraftKings CEO Robins Says Company Has #3 Prediction Market Exchange

DraftKings (NASDAQ: DKNG) launched its DKeX prediction market exchange in late June and the platform has already ascended to a podium position, according to CEO and co-founder Jason Robins.

Speaking at the NEXTPredict Summit in New York City earlier today, Robins noted that in short order, DKeX has ascended to the third spot among U.S. prediction market exchanges. DKeX is an in-house exchange, meaning it affords DraftKings full control over its prediction market economics.

U.S. prediction market volume is largely concentrated among two operators, but in the next tier, DKeX is viewed as one of the most valid competitors and data indicate the exchange garnered modestly higher market share in September.

DraftKings Prediction Market Ascent Impressive

The rise of DraftKings Predictions, the company’s broader prediction market platform, is arguably impressive when considering it’s available in 38, not 50 states. The prediction market’s full suite of event contracts is available in just 18 states.

While California, Florida and Texas are part of that mix, DraftKings Predictions only offers financial event contracts in sports betting-enthused states such as Colorado, New York and Pennsylvania.

Robins acknowledges that DraftKings would be even more prominent in prediction markets if it was able to offer sports event contracts in a state like New York, but it was prudent for the company to avoid offering sports derivatives in the states in which it books traditional sports wagers.

“The alternative was we would have had our licenses under threat, and I think that wouldn’t have been a smart move,” he said at the NEXTPredict Summit.

Regulatory Clarity Could Be a ‘Win-Win’

Amid increasing chatter about the regulatory fate of sports event contracts, which many experts believe likely boils down to a Supreme Court decision in the future, DraftKings may be in a good position regardless of how the high court rules.

As Robins said at the conference, some companies “have really staked a lot on one outcome or the other,” but in the case of DraftKings, it may be one of the winners regardless of whether the Supreme Court strikes down sports event contracts or not.

“So we actually feel like we put ourselves in this win-win spot where no matter what the outcome of that whole process is, we are well positioned going forward,” he said at the conference. “And I’m hopeful that it ends up being something that is allowable over the long term. But I also feel like if that doesn’t happen, we’re in a great spot.”