DraftKings Launches Prediction Markets Division as CFTC Greenlights Sports Event Contracts
DraftKings has formally launched a dedicated prediction markets division following the CFTC's July decision to permit regulated sports event contracts. The move positions the operator to offer federally-regulated wagering products in all 50 US states, potentially reshaping competitive dynamics with Kalshi and Polymarket.
DraftKings announced Monday the formation of DraftKings Predict, a standalone business unit built to offer sports and event-based contracts under Commodity Futures Trading Commission oversight. The launch follows the CFTC's late-July guidance clarifying that certain sports outcome contracts fall within its jurisdiction, opening a regulatory pathway that bypasses state-by-state gambling licensure. Chief Executive Jason Robins told analysts the division would operate independently from the company's licensed sportsbook, with a separate technology stack and compliance framework designed around federal derivatives rules.
The Boston-based operator has hired former Cboe Global Markets executive Rebecca Tenuta to lead the unit, alongside a team drawn from both financial services and the company's existing sportsbook trading operation. Initial products are expected to include contracts on NFL game outcomes, season-long team performance markers, and major golf and tennis events, with launches targeted for the opening weeks of the 2026 NFL season. DraftKings said it would initially exclude residents of states where its licensed sportsbook already operates to avoid channel conflict, though executives conceded that position may evolve.
The announcement intensifies a rapidly escalating race among prediction market operators. Kalshi, which pioneered CFTC-regulated sports contracts after a favorable court ruling last year, has seen monthly volumes climb past $2 billion, while Polymarket recently secured US re-entry through its QCX acquisition. Analysts at Macquarie noted that DraftKings brings brand recognition and a customer database of more than 3.5 million monthly active users that dwarfs current prediction market incumbents, potentially accelerating mainstream adoption of the format.
State gambling regulators have voiced concern about the federal workaround, with the North American Gaming Regulators Association warning last month that sports event contracts risk undermining consumer protections built into state licensing regimes. DraftKings said it has proactively engaged with state attorneys general and would incorporate responsible gambling tools, deposit limits, and self-exclusion interoperability with its sportsbook platform. Shares in the operator rose 6.2% in pre-market trading following the announcement.