On Dec. 19, 2025, DraftKings announced that it launched its so-called “prediction markets” online gambling product in the United States.
DraftKings Predictions is a standalone app, separate from DraftKings Sportsbook and DraftKings Casino. DraftKings Predictions facilitates stock-market-style gambling on sports and various “real-world outcomes.”
It has the potential to be highly addictive and harmful.
Is ‘DraftKings Predictions’ Legal?
Yes, it’s technically legal, but with some major caveats.
The product operates under a controversial, legally dubious registration with the U.S. Commodity Futures Trading Commission (CFTC). Critics say CFTC-fueled online sports betting is a form of corruption at the federal level. State law, not federal law, oversees sports betting, but DraftKings Predictions isn’t legally classified as gambling.
The NCAA and the NFL oppose prediction markets.
The Trump family invested in the nascent prediction markets sector, which the Trump Administration shockingly enabled, but it does not have a stake in DraftKings.
FanDuel, the primary online gambling rival to DraftKings, plans to launch its similar “predictions” app in the coming days or weeks. Numerous other prediction market products exist in what is becoming a crowded space.
Where is ‘DraftKings Predictions’ Available?
DraftKings Predictions went live in 38 states the morning of Dec. 19, 17 of them with “sports event contracts”. That’s the new legal jargon for sports gambling under so-called CFTC regulation.
The rapid expansion of online sports betting comes as public opinion of the industry has plummeted.
DraftKings was warned by numerous states where it is licensed to offer traditional sports betting that it must not launch its predictions product in those states. It appears DraftKings complied with those warnings.
Why Did DraftKings Launch a ‘Predictions’ App?
DraftKings Predictions allows the Boston-based company to circumvent state gambling laws in populous states such as California, Florida, Georgia, Minnesota, and Texas.
DraftKings failed to gain state approval to operate house-banked sports betting in those markets, though it offers daily fantasy sports (DFS) in numerous states without traditional sports betting. DFS is a form of sports betting.
In other words, under the CFTC, DraftKings Predictions can offer sports betting (rebranded as “trading”) in those states despite not having state approval to do so.
As of late 2025, around 60% of the U.S. population lived in a state with legal online sports betting. The CFTC has essentially allowed DraftKings to offer sports betting to the other 40%.
DraftKings’ Acquisition For ‘Predictions’ Online Gambling
DraftKings officially threw its hat into the ring for “predictions” online gambling in October 2025.
The company announced the acquisition of Railbird Technologies and its wholly owned subsidiary, Railbird Exchange, LLC, a federally registered exchange designated by the CFTC.
The company, which did not announce a price tag for the acquisition, said the deal was part of its “broader strategy to enter prediction markets.”
The company said it planned to launch DraftKings Predictions “as a mobile application in the coming months.”
The acquisition was an effort to compete with nascent prediction gambling platforms Kalshi and Polymarket. However, numerous states, such as New York and Massachusetts, have accused Kalshi of operating an illegal online sportsbook.
“State legislative efforts to ban or regulate prediction markets seem a bit premature with so many pending court cases addressing whether state laws can be applied to such activities,” gaming attorney Dan Wallach wrote on LinkedIn on Dec. 19 following the DraftKings Predictions launch.
“Until that issue is settled in the federal courts — which could take several years — state legislation would likely not be very effective. The future of sports prediction markets will ultimately be decided by the Courts or Congress, not state legislatures.”
What is ‘DraftKings Predictions’?
The gambling platform allows “yes/no” gambling on “real-world outcomes” across sports, finance, culture, and entertainment, the Boston-based company said.
It’s a stock-market-style form of sports gambling.
“We are excited about the additional opportunity that prediction markets could represent for our business,” Jason Robins, CEO and co-founder of DraftKings, said in a statement. “We believe that Railbird’s team and platform—combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products—positions us to win in this incremental space.”
DraftKings did not initially state where its “prediction” product would be available.
Legal Loophole
Under what numerous states have called a legal loophole, Kalshi has offered nationwide gambling on sports and real-world events. As of December, Polymarket was still working toward launching its U.S.-facing platform. Kalshi and Polymarket partnered with the NHL in late 2025. Kalshi took things a step further with a CNN gambling partnership.
Despite the fledgling nature of prediction-style gambling, Kalshi had a valuation of around $10 billion, and Polymarket had a valuation of $12 billion, after recent funding rounds.
DraftKings’ market cap was about $16.7 billion at the time of the Railbird acquisition. The company’s value at the time of the DraftKings Predictions launch was about $17.1 billion.
Gambling Harm Implications
Online gambling addiction has soared in recent years after the spread of online casinos and sports betting nationwide. DraftKings is a giant in the sector that siphoned more than $22.1 billion from Americans in 2024. The legal online gambling market in the U.S. soared in 2025, but official figures weren’t available at the time of writing.
Prediction-style gambling ups the ante at a time when states and the federal government have yet to address the U.S. online gambling crisis fully.
Like Kalshi and Polymarket, DraftKings has used the euphemism “trading” to refer to prediction-style online gambling.
In a November 2025 shareholder letter, DraftKings used the terms “responsible engagement” and “responsible trading” in reference to potential addiction on DraftKings Predictions.
Ahead of the DraftKings Predictions launch, the company left the American Gaming Association in a disagreement over the new product line. Other casino giants, such as MGM and Caesars, appear to be sitting on the sidelines until there is legal clarity.
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