PrizePicks Secures CFTC Approval as FCM, Eyes Prediction Markets

North America-facing daily fantasy sports operator PrizePicks has just secured approval to make a foray into the prediction markets space. The significant development comes just after Czech lottery giant Allwyn set out to acquire a majority stake in the company.

PrizePicks Could Enter the Prediction Markets Space

PrizePicks just secured approval from the Commodity Futures Trading Commission (CFTC) as a futures commission merchant (FCM). This paves the way for the launch of a PrizePicks-operated prediction markets platform.

According to the announcement, the approval was handed to PrizePicks’ subsidiary SidePrize, which has become the latest member of the National Futures Association (NFA). This approval comes as prediction markets operators continue to grow and attract players toward their platforms.

Filings reveal that PrizePicks’ mulled prediction markets platform would be called PrizePicks Predicts. Although the CFTC approval is only the first step, it underscores the company’s ambition to penetrate a trending vertical and expand its US presence.

Mike Ybarra, PrizePicks’ chief executive officer, commented on the recent approval, highlighting the fact that his company is the first sports entertainment platform to receive an FCM registration from the NFA. Ybarra added that this attests to PrizePicks’ industry-leading compliance and consumer protection programs.

Allwyn to Acquire PrizePicks

PrizePicks’ approval as an FCM comes just after the Czech lottery giant Allwyn set out to acquire a 62.3% majority stake in the company. In its announcement, Allwyn said that it will purchase the stake for an initial cash consideration of $1.6 billion plus up to $1 billion more, depending on PrizePicks’ performance over the next three years. The lottery company hopes to close the deal in H1 2025.

As part of Allwyn, PrizePicks will remain a standalone brand. However, the change in ownership would allow Allwyn to expand its US footprint and capitalize on emerging opportunities in the North American market. With PrizePicks considering entering the prediction markets space, Allwyn’s bid could turn out to be an extremely lucrative decision.

As mentioned, prediction markets have been experiencing rapid growth, with Kalshi recently surpassing $1 billion in monthly trading volume.