DraftKings is reportedly in discussions with Railbird Exchange regarding a potential acquisition of the startup predictions market.
As per Front Office Sports, the financial terms of the potential deal remain unknown, with an agreement for such a transaction still yet to be reached between the two parties.
Last month, Railbird Exchange confirmed it had been granted a designated contract market (DCM) licence from the Commodity Futures Trading Commission (CFTC), allowing it to offer event contracts to consumers.
The CFTC is a federal agency entrusted to regulate the derivatives and futures market in the US.
The awarding of the licence came after Railbird was founded in 2021. The prediction market was formerly housed in the Y Combinator, a startup accelerator, and was co-founded by Yale alumnus Miles Saffran and Columbia grad Edward Tian.
Former CFTC commissioner Dawn Stump sits on the company’s board and its chief revenue officer, Anne Loranger, previously had a spell with Coinbase.
Railbird’s website states it is “plans to launch soon”, with no live markets available at the time of writing.
DraftKings had previously applied for the same licence from the CFTC so that the Boston-based operator could oversee its own predictions market but withdrew its application in April, as per Bloomberg.
Regarding the Railbird Exchange acquisition, a DraftKings spokesperson told Front Office Sports: “DraftKings speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to comment on the specifics of any of those discussions.”
Posting on X, partner emeritus at Eilers & Krejcik Gaming Chris Grove said: “Smart move by [DraftKings]. Will be interesting to see if there’s any blowback from regulators (I still think it will be mostly bark versus bite) or California tribes (definitely, although maybe [CEO] Jason Robins has concluded – correctly, in my view – that the tribes have no reason to ever let DK or [FanDuel] into California, so the value of appeasing tribes is actually marginal).”
Speculation surrounding sportsbooks partnering with predictions markets has lingered since sports event contracts were offered by the likes of Kalshi, Robinhood and Crypto.com since late last year.
The product’s similarity to traditional online sports betting has sparked backlash from multiple state regulators, given prediction markets are regulated at federal level.
Additionally, predictions markets are available to any user aged 18 and over in all 50 US states, including those that have not yet legalised any form of gambling.
In June, rumours started to circulate suggesting a deal could be in the works between FanDuel and Kalshi, one of the most prominent prediction markets.
It has also been suggested that prediction markets could serve as a customer database builder in states without legalised sports betting, similarly to how FanDuel and DraftKings’ DFS past helped give them a running start when PASPA fell in 2018.
Speaking on the company’s Q1 earnings call, Flutter Entertainment CEO Peter Jackson said there was a “prime the pump” opportunity in this regard as he said Betfair staffers had been tasked with exploring launching a US-facing operation.
Currently, Kalshi allows users to trade contracts on the outcome of several sporting competitions, with contracts available to be traded on the winner of the tennis US Open, football’s 2026 World Cup and the Tour de France, as well as all popular US sports.
Additionally, the exchange offers single-game winners, though Kalshi has not yet listed player prop bets and parlay markets.
Kalshi has been the subject of cease-and-desist orders from multiple state regulators, with authorities in Nevada, New Jersey, Illinois, Maryland, Ohio, Montana and Arizona all taking action, though the prediction market has sued Nevada, New Jersey and Maryland in response.
The post Report: DraftKings discussing potential predictions market acquisition first appeared on EGR Intel.
Three months after withdrawing its own predictions market licence application, operator is reported to be in talks with Railbird Exchange regarding a potential takeover
The post Report: DraftKings discussing potential predictions market acquisition first appeared on EGR Intel.