DraftKings Yanks Prediction Markets Application

Posted on: April 18, 2025, 01:36h. 

Last updated on: April 18, 2025, 08:49h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Decision comes eight months after application was filed
  • Sportsbook operator pulls application as legal challenges mount against Kalshi

DraftKings (NASDAQ: DKNG) pulled an application submitted to the National Futures Association (NFA) that had it been approved, would have set the stage for the gaming company to enter the fast-growing prediction markets space.

DraftKings
A DraftKings logo. The company pulled an application to potentially enter the prediction markets industry. (Image: DraftKings Sportsbook)

The Boston-based sportsbook and internet casino operator submitted the regulatory request last July and withdrew it in March. The company had filed an application for an entity known as “DraftKings Predict”, which presumably would have been a competitor to prediction markets such as Kalshi and PredictIt — two of the industry leaders.

DraftKings continues to monitor developments related to prediction markets as an emerging product that reflects evolving consumer engagement and warrants thoughtful consideration,” a representative from the gaming company told Covers on Wednesday.

Before the withdrawal of the application, DraftKings was considered a pending member of the NFA. The filing was submitted by Gus II LLC and included a DraftKings address and phone number. Co-founder and CEO Jason Robins were among the names mentioned in the filing, and it appears that if DraftKings Predict comes to life, co-founder Paul Liberman will be its chief executive officer.

DraftKings Flirted with Prediction Markets

Prediction markets such as Crypto.com, Kalshi, and Robinhood are regulated by the Commodity Futures Trading Commission (CFTC). In most cases, the CFTC requires that its member firms also be registered with the NFA.

That likely explains why DraftKings registered with the NFA, but Kalshi — the behemoth in the prediction markets arena — isn’t an NFA member firm. Robins previously said his company was staying abreast of goings on in the prediction, potentially implying there was some interest there.

The gaming company didn’t elaborate on why it pulled its NFA application, but part of the reason could boil down to regulatory considerations. DraftKings and its peers in the sports betting industry deal with state regulators whereas Kalshi and prediction market operators answer to the CFTC — a federal entity.

Though not confirmed, another reason why DraftKings may have backed off its prediction markets flirtation is because an increasing number of states are taking aim at Kalshi, claiming the company doesn’t have the right to offer sports contracts in those jurisdictions. With the exception of Nevada, DraftKings books bets in all of the states that are voicing concern about sports event contracts.

Interesting Timing

News of DraftKings withdrawing its NFA application arrived just days after Kalshi started offering derivatives on Major League Baseball (MLB) games — a sign critics say is confirmation the company is acting as a sportsbook.

The decision also coincides with increased chatter from analysts acknowledging that while prediction markets are a competitive threat to online sports betting, the two industries are likely to find a way to coexist in the future.

Some industry observers believe sportsbook operators could even leverage prediction markets in their favor to mitigate tax pressures in some states while potentially gaining entry to other coveted jurisdictions that currently prohibit sports betting.