DraftKings is making a strategic move into the prediction market space by acquiring Railbird, a licensed platform for event-based contracts. This acquisition paves the way for the launch of the new “DraftKings Predictions” mobile app, which will primarily target U.S. states where traditional sports betting remains illegal. The company aims to tap into a growing market that, according to industry estimates, could balloon to over $95 billion by 2035.
While specific financial details of the Railbird acquisition were not disclosed, the timing of the deal is notable. It comes amid a surge in public interest and participation in prediction markets, which recently surpassed $2 billion in weekly trading volume for the first time. These platforms allow users to wager on the outcomes of real-world events—ranging from political elections to entertainment awards—offering a legal alternative to sports betting in jurisdictions where gambling laws remain restrictive.
Railbird, acquired by DraftKings, holds a designated contract market (DCM) license granted by the U.S. Commodity Futures Trading Commission (CFTC) since June. This license provides the legal framework for offering event-based contracts, a crucial regulatory advantage that DraftKings plans to leverage as it expands into this emerging sector.
The DraftKings Predictions app will allow users to engage in forecasting events such as political outcomes, economic trends, pop culture developments, and more. By focusing on non-sporting event markets, the company avoids the legal minefield that surrounds sports betting in many parts of the U.S. This approach allows DraftKings to broaden its user base and reach consumers in untapped regions.
Unlike traditional sportsbooks, prediction markets operate under a different regulatory umbrella. These platforms are often treated more like financial exchanges than gambling services, which enables them to function in states where sports gambling has not been legalized. DraftKings is clearly positioning itself to capitalize on this loophole by offering engaging, skill-based forecasting tools.
The move also reflects broader trends within the tech and finance industries. Prediction markets are increasingly seen as valuable tools for aggregating public sentiment and forecasting outcomes with surprising accuracy. Companies, hedge funds, and policymakers are beginning to explore how such platforms might inform decision-making and risk management.
DraftKings’ foray into this space is not just a bid to increase revenue—it’s a calculated attempt to expand its ecosystem. The company already commands a leading position in sports betting and daily fantasy sports. By entering the prediction market, DraftKings adds another vertical to its portfolio, one that could thrive even in regulatory gray zones.
The growing legitimacy of prediction markets is also drawing attention from regulators. The CFTC’s decision to grant Railbird a DCM license signifies a shift in how these platforms are perceived. As more operators seek similar approvals, a clearer regulatory environment could emerge, potentially accelerating mainstream adoption.
Furthermore, the DraftKings Predictions app could serve as a low-risk entry point for new users unfamiliar with sports betting or traditional financial markets. Its simplified interface and focus on real-world events may attract a broader demographic—including casual users interested in politics, current events, and entertainment.
This shift could also influence the competitive landscape. Other major players in the betting or fintech space may follow DraftKings’ lead, either by developing their own prediction platforms or acquiring smaller firms already operating in the sector. The race to dominate the next frontier of digital forecasting has officially begun.
Finally, the timing of DraftKings’ entry is significant. With the 2024 U.S. elections approaching, interest in political prediction markets is likely to spike. This offers DraftKings the perfect opportunity to onboard users and generate engagement through high-profile, time-sensitive events.
In conclusion, DraftKings’ acquisition of Railbird and the upcoming launch of its prediction market app mark a bold expansion strategy into a rapidly growing sector. By targeting non-sports betting states and leveraging regulatory advantages, the company is positioning itself at the crossroads of entertainment, data science, and democratized forecasting—potentially redefining how Americans engage with real-world outcomes.