DraftKings' long-awaited prediction market product has officially launched and will be available in the coming days.
Though these intentions were first announced in October with the acquisition of CFTC-certified contract market, Railbird Technologies, it is not in partnership with this exchange that the product will launch.
In an unexpected move, users trading predictions on the new platform, will be trading via the CME Group.
The rollout of the wholly-owned Railbird Exchange as the facilitating financial instrument will come later on.
DraftKings Predictions is the name of the new mobile app and web platform, which will initially offer a range of sports event and financial contracts.
The announcement suggests that a wider array of categories is in the pipeline, with entertainment and culture-based event contracts to be added later on.
Not only is this a new vertical for the operator, but DraftKings Predictions is being run as a subsidiary company, wholly owned by DraftKings, but registered with CFTC as an 'Introducing Broker,' and with the National Futures Association (NFA) as a member.
Corey Gottlieb, CPO at DraftKings, has said: "We will create an unparalleled customer experience, leveraging key strategic relationships like ESPN and NBCUniversal to provide an authentic, real-time product that moves at the speed of sports."
He added: "Along 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."
Event contracts will be available across 38 states, including a number of states where sports betting is illegal - the operator has named a few of these large new markets in its press release, including: California, Florida, Georgia and Texas.
For licensed sports betting providers like DraftKings, the opportunity to enter these markets and compete with the likes of Kalshi and Polymarket, has proven too enticing to resist.
With FanDuel soon to launch its own predictions product and Kalshi's valuation reaching $11m recently, it will also have felt like a race against time to participate.
This may explain why, despite having acquired its own CFTC-licensed exchange, it has launched with the CME Group - if for whatever reason, the Railbird Exchange was not yet operational, DraftKings will have wanted to find the fastest way to get this launch off the ground.
Despite offering sports contracts in states where sports betting is illegal, the operator has sought to differentiate itself from its prediction market rivals by emphasizing its commitment to responsible gaming best practices.
To this end, the new product will include various tools that are commonly seen within the licensed online gambling industry, such as deposit limits, cool off periods and self-exclusion facilities.
DraftKings is running a promotional competition that will allow customers using DraftKings Predictions to win $1m
