Jason Robins recently opened his eighth NFL football season since DraftKings launched a commercial sportsbook shortly after the US Supreme Court’s PASPA decision which made legal betting possible outside of Nevada.
Before the pandemic, the DraftKings CEO and his peers at other sportsbooks did not have to contend with prediction markets, which have become the shiny new toy across the market. But as the football season kicks into high gear, leading sportsbooks are brainstorming their next steps for a potential prediction market launch of their own.
Speaking last week at the 2025 BofA Gaming and Lodging Conference, Robins indicated that derivative trades on sports could present a significant opportunity in states where sports gambling is not currently legal.
Without mentioning the jurisdictions by name, it can be reasonably inferred that Robins might have California and Texas in mind. While reports surfaced over the summer that DraftKings engaged in M&A talks with Railbird Exchange, DraftKings has not signalled that it is close to launch a prediction market exchange. Nevertheless, Robins indicated that the total addressable market (TAM) for sports derivatives in non-sports betting states could be considerable.
“We have to make sure that we have the right thing and we are prepared to do it,” Robins told BofA analyst Shaun Kelley. “It’s pretty simple. I think the TAM opportunity is likely to be very significant in states that do not have legal online sports betting.”
Robins not rushing to become a first mover
Robins made his first public comments on prediction markets since DraftKings released its second-quarter earnings results last month. During the 7 August call, Robins said the company would take a “measured approach” in identifying potential prediction market opportunities. Prediction markets such as Kalshi and Crypto.com offer sports event contracts with characteristics similar to derivatives (i.e. oil and soybean futures). DraftKings has not baked a prediction market launch into its full-year 2025 financial guidance.
In the run-up to football season, several leading companies made major announcements regarding the trading vehicle. Flutter, DraftKings’ main rival through primary brand FanDuel, announced a partnership last month with the CME Group on a new prediction market. For now, it appears that Flutter will focus on non-sports contracts upon the initial launch. In another development last week, Crypto.com announced that it entered into a partnership with fantasy sports and gambling company Underdog. Under the deal, the prediction market will be available through Underdog’s existing app.
A day before the NFL season opened, Polymarket announced that it had received approval from the US Commodity Futures Trading Commission to offer prediction markets in the US. Polymarket, which is not regulated on the state level, paid $1.4 million in fines to the US federal government to settle 2022 charges of offering illegal event contracts to traders.
Unlike federally regulated exchanges such as Polymarket and Kalshi, DraftKings has to consider its standing with state regulators, Robins emphasised.
“The most important question is where will the space evolve? It appears on the federal level that this is going to be here to stay,” Robins said. “Then the question becomes, what happens with the states? For someone like Polymarket, they don’t have to worry about that. They also don’t have any revenue risk in the states.”
Jason Robins explains market-maker dilemma
While traditional sportsbooks act as the house against customers, sports betting exchanges depend on so-called “market makers” to provide constant liquidity. A market maker ensures that each bet has a counterparty to match the other side of a trade. For instance, as of Tuesday evening, Kalshi gave the Philadelphia Eagles a 53% chance to defeat the Kansas City Chiefs in a Week 2 rematch of the Super Bowl. Kalshi relies on its market makers to take the other side with the Chiefs to avoid unbalanced volume.
In April 2024, Susquehanna Government Products, LLLP, a member of the Susquehanna International Group of Companies, became the first entity to serve as a market maker for Kalshi’s event contracts. Over the summer, lawyers for the Nevada attorney general’s office requested information regarding Kalshi’s market makers in a discovery motion. In response, Kalshi called the request a “distraction”.
In mulling whether to launch a prediction market, Robins noted that it will be difficult to list an offering as expansive as the one DraftKings has for its traditional sportsbook. When a prediction market is offering an event contract, the exchange must be comfortable handling the liquidity on the other side of a trade, he indicated.
For example, around midnight on Election Night in 2024, it became clear that Donald Trump had a commanding lead over Democratic challenger Kamala Harris. Around that time, Kalshi took a seven-figure trade on Trump through its election betting market. In terms of liquidity, a market maker needs to cover the losses from trades on Harris if there’s a high volume of action on Trump.
Through a traditional sportsbook model, DraftKings is able to place limits on sharps and other customers, Robins told BofA. The limits are the primary reason why DraftKings can post the “variety of bets” it offers, he stressed. A number of those trades may not be available if DraftKings launches a prediction market offering.
NFL Week 1 sports betting results
Over the first four days of the NFL opening weekend through Sunday night, Kalshi recorded trading volume of $441 million, CEO Tarek Mansour wrote on LinkedIn. The volume is slightly lower than levels it reported on Election Night last year for its presidential election markets. Last weekend marked the first time Kalshi has offered NFL event contracts for Week 1 of a regular season.
Citizens JMP tracked the pricing on 30 money line and over/under trades last weekend. According to Citizens’ data, Kalshi had less favourable pricing than DraftKings and FanDuel prior to kickoff on Sunday, with average money line prices about 7% more expensive. For over/under contracts, the pricing at Kalshi came in roughly 10% higher, Citizens found.
One trend to monitor throughout the season centres on the number of market makers that Kalshi can bring into the platform. Typically, when an exchange attracts more market makers the spread will narrow, resulting in better prices for customers. Also, pricing at a traditional sportsbook can be different from the norm in the opening week of the NFL season due to the promotional environment.
DraftKings has not indicated if it has a timetable to decide whether to launch a prediction market offering.
Key states such as California and Texas could be a focus for sportsbook operators eyeing expansion.