DraftKings to Debut Sports Event Contracts ‘in the Coming Months’

• DraftKings released its Q3 earning report today, in which the company said it will debut DraftKings Predictions in the next few months
• The company plans to offer sports event contracts where sports betting is not currently offered
• DraftKings recently acquired Railbird Technologies Inc, a federally licensed exchange designated by the CFTC, for this purpose

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DraftKings is planning to launch DraftKings Predictions, along with sports event contracts, sometime in the coming months.

DraftKings today announced its plan to enter the predictions market in its Q3 results press release. In late October, DraftKings acquired Railbird Technologies Inc, a federally licensed exchange designated by the Commodity Futures Trading Commission (CFTC), to enter the predictions market.

“This is the most bullish I have ever felt about our future,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “Underlying growth in the business is accelerating and we are excited to launch DraftKings Predictions in the coming months, which we view as a significant incremental opportunity.”

Focusing on States Without Sports Betting

According to the company, the rollout of DraftKings Predictions will be thoughtful and done so in a way “that is respectful of other stake holders.” The company noted it will focus sports event contracts in states were sports betting is not currently offered, which is where it believes the majority of a financial opportunity exists.

The decision will likely bring about the attention of several state gaming regulatory bodies that have warned license holders to not offer sports event contracts or partner with those who do. Doing so could potentially put DraftKings’ sports betting licenses at risk.

Both the Michigan Gaming Control Board and Ohio Casino Control Commission have recently warned its license holders to not engage in the markets.

The Michigan Gaming Control Board sent letters to licensed operators earlier this month warning them that any participation in the market would play into the board’s decision for future licensure in the state.

“The Michigan Gaming Control Board understands that certain licensees may be considering opportunities to operate, offer, or facilitate access to prediction markets, where individuals can buy, sell, and trade event contracts that are based on a future event, occurrence, or value. The MGCB further understands that many of these prediction markets would offer sporting event contracts – event contracts in which an individual acquires a position on the outcome of a sporting event or other occurrence related to a sporting event – and would not operate in accordance with state gaming laws or pursuant to state-issued gaming licenses,” Henry Williams, Executive Director of the Michigan Gaming Control Board, wrote.

The Ohio Casino Control Commission sent similar letters to its operators, which led prediction market company Kalshi to file a lawsuit against the commission and the Ohio Attorney General.

Arizona and Nevada regulatory gaming bodies have also sent similar letters to gaming operators.

The company will present its full Q3 earnings report on Friday, Oct. 7, at 8:30 a.m.

Busy Day for DraftKings

In addition to the news that it plans to launch DraftKings Predictions soon, the sports betting company also announced a new comprehensive partnership with ESPN.

DraftKings will serve as the official sportsbook and odds provider for ESPN, with DraftKings products integrated across ESPN’s ecosystem beginning in December.

Full DraftKings rollout is expected across ESPN by 2026. DraftKings will power the betting tab within the ESPN app and their customers will receive special promotions for ESPN unlimited, the company’s newly launched direct-to-consumer product.

“Our betting approach has focused on offering an integrated experience within our products,” said Jimmy Pitaro, Chairman, ESPN. “Working with DraftKings, a leader in the space, will allow us to build upon that foundation, continue to super-serve passionate sports fans and grow our ESPN direct-to-consumer business. We are excited about this new collaboration with DraftKings.”

DraftKings operates in 28 states and in Washington D.C. and Ontario, Canada, and has more than 10 million customers across its products.