DraftKings Eyeing Prediction Market Platform Railbird

DraftKings has been trying to get skin in the prediction market game for a long while now. The company has attempted to launch a proprietary platform, DraftKings Predict, which registered with the National Futures Association (NFA), but there has been little to expand on this after the fact, not least because the company’s registration with the NFA seemed to hit a dead end.

DraftKing’s Prediction Market Overtures Are Well-Documented

This is until Monday, when Front Office Sports broke the news that DraftKings is most likely going to buy an already-established platform, with the name floating being that of Railbird, a prediction market. The New York-based company is indeed a good acquisition target for DraftKings, as it has already won approval from the Commodity Futures Trading Commission in June, and it has been going strong so far.

More importantly, Railbird is backed by Y Combinator and SeatGeek’s Jack Groetzinger. While Crunchbase has described the company’s outlook as positive, the future of prediction markets is still a little shaky, as Kalshi is facing multiple challenges across the United States.

The summer lull has slowed down the negative news trickling in about regulatory and court decisions against the sector, but things are bound to pick up.

Either way, DraftKings could have decided that securing an asset is far better than missing out on the market altogether. Previously, the company was unsure about prediction markets, but this may have changed.

An official confirmation of a potential acquisition is yet to come. At the same time, DraftKings has not really shied away from buying out various assets, including Jacpocket, a lottery courier service.

DraftKings Nervous About Missing Out on Big Opportunity

DraftKings similarly acquired Simplebet Inc, a provider of micro betting services, which further boosted the company’s own tech stack and understanding of the market. If Kalshi and Polymarket continue to garner momentum and overcome their current regulatory challenges, companies such as DraftKings may find themselves hemmed in by regulation.

One good example is Illinois’ betting surcharge. Because Polymarket and Kalshi are not technically betting, they do not need to comply with the surcharge requirement, which leaves DraftKings and its peers at a severe disadvantage.