DraftKings Eyes Prediction Markets with New Venture
DraftKings is dipping its toes into prediction markets, and it’s a bold pivot beyond its sports betting turf. The company quietly filed for “DraftKings Predict” with the National Futures Association (NFA) on July 30, 2024, under the name Gus II LLC.
Laying the Groundwork
The NFA filing is no small step. It lists DraftKings’ HQ address and phone, with co-founder Paul Liberman as CEO of DraftKings Predict, current CEO Jason Robins as an “indirect owner,” and CFO Alan Ellingson doubling as director and COO.
This isn’t a side hustle, it’s a deliberate push. Robins confirmed the vibe, saying the company’s keeping a close eye on regulatory moves with “big interest” in how it plays out.
DraftKings Predict’s next play hinges on the Commodity Futures Trading Commission (CFTC). The agency’s upcoming ruling on event contracts could greenlight the venture. For now, the NFA registration is pending, and DraftKings is staying mum when pressed by media.
Why Prediction Markets?
Prediction markets let players wager on future events: politics, Oscars, inflation, and DraftKings, like probably many other companies, sees gold there. It’s a chance to stretch beyond sportsbooks, tapping a fanbase already hooked on its brand.
With platforms like Kalshi raking in bets, the appetite’s clear: DraftKings wants a slice before the table’s set.
The move is also strategic. Federal rules for event contracts could sidestep patchy state gambling laws, giving DraftKings a nationwide shot.
Plus, jumping in early, months ahead of competitors, positions them to lead if the CFTC loosens its historically tight grip. Robins hinted at this, noting they’re tracking the regulatory scene for a ruling expected soon.
The Bigger Picture
Prediction markets are buzzing. Polymarket’s success shows demand, but the CFTC’s long been a stickler, especially on political or sports contracts, calling them gambling in disguise. That might however shift.
Speculation’s up with ex-Kalshi board member Brian Quintenz tapped to chair the CFTC under Trump, hinting at a friendlier stance. The agency’s slated a public roundtable on sports event contracts, a step toward sorting out the legal mess.
Not everyone’s on board. Nevada’s Gaming Control Board slapped Kalshi with a cease-and-desist, and the American Gaming Association’s vocally anti-prediction markets.
DraftKings, though, smells opportunity. Its $19 billion sports betting clout could jolt this niche into the mainstream, spurring new tech and bigger bets.
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