DraftKings Acquires Railbird, Plans DraftKings Prediction Markets Next

On the subject of prediction markets at the September 4 BofA Gaming event, DraftKings CEO had this to say in response to the hype surrounding prediction markets:

“When both products [sportsbooks and prediction markets] are available, customers overwhelmingly prefer the traditional online sports betting product.”

Skip forward nearly 2 months, and DraftKings has acquired Railbird Exchange LLC, a New York-based financial technology company that specializes in financial regulated prediction markets and event contract exchanges. Make no mistake, this is no last minute buy or reckless decision on behalf of the sports betting juggernaut. DraftKings opened discussions with Railbird back in July, and it has been gradually building up to this moment, when it can officially enter the great race to prediction markets.

DraftKings Acquires Railbird

Railbird was granted a Designated Contract Market status by the US Commodity Futures Trading Commission on June 13th, and thus became a fully authorized financial derivatives market. Within a month, it opened talks with DraftKings about a potential merger, and now, on the 21st of October, those discussions have finally been settled. DraftKings announced the Railbird acquisition on its site. Jason Robins chipped in with a completely new tone on prediction markets.

“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.”

Incremental space indeed. DraftKings has jumped on the bandwagon, and with its expansive reach across the US, it will almost certainly become a prominent player in the US prediction market industry.

For this is not a simple expansion or side project. Prediction markets have exploded in the US, and operators like Kalshi, Robinhood, and the returning Polymarket, have soaked up a huge supply of revenue. Revenue that would otherwise most likely flow into sports betting.

What Is Railbird Exchange LLC

Railbird Exchange was founded in 2021 in New York. It received investments from numerous companies, including Tribe Capital, Liquid 2 Ventures and Soma Capital, and in 2025, it was finally authorized by the CFTC to serve derivatives trading products. With a DCM status, Railbird is allowed to operate an event contract exchange in all 50 states. As these event contracts are not classified as sports betting. Instead, they are financial trading products that fall under the scope of the federally run CFTC.

Why Prediction Markets for DraftKings?

Therefore, this is a major step up for DraftKings, who already operate in 25 of the 38 states that have legalized sports betting. It is also the only legal sportsbook in states such as Oregon and New Hampshire. What about the other 10+ states you ask?

They either have state-run gambling monopolies (see Rhode Island or Florida), or they have legalized sports betting, but only allow retail options (no mobile/online betting). That is, sports betting is only legal at designated retail sportsbooks, or in most cases, at tribal casinos.

Please note: the states with legal sports betting currently stand at 38, but with Missouri launching legal sports betting from December, that number will grow to 39. And DraftKings will be legal in Missouri, after securing one of the two direct mobile licenses in the state.

Other Sportsbook Brands Betting on Prediction Markets

DraftKings will not lead this charge alone. Recently, FanDuel partnered with CME Group, to form its own prediction markets and event based contracts. Another potential rival is Underdog Fantasy, which partnered with Crypto.com Derivatives North America in September. Then, there are the legacy prediction market platforms like Kalshi, Robinhood, and crypto-based Polymarket. Polymarket was actually blocked from the US, but obtained the permissions from the CFTC to come back in time for the 2025 NFL season.

It is a pretty exciting space, and the likes of Kalshi have already reeled in record numbers of trades when the NFL betting season started. The platform, which was most notable for its election prediction markets and financial stock trading, launched a series of NFL related betting products when the 2025/26 NFL season began. We saw moneylines, spreads, totals, and even player props crop up in the markets. And to make it even more intriguing, Kalshi also launched NFL parlay-style prediction markets.

The Goal for DraftKings

With heightened activity during sports season, including the NBA, prediction markets have actually seized a chunky piece of the action for themselves. And it has come at the expense of sportsbooks.

DraftKings has publicly stated that the goal, through prediction markets, is to diversify its revenue and create a product that can access states with limited or no legal sports betting. States like California, Texas, or Florida are key targets for their massive market potential, and by sidestepping the legal constraints on sports betting, DraftKings will be able to reach customers in these pivotal regions.

Risks and Uncertainties Surrounding Prediction Markets

It doesn’t, however, come without its own risks. There have been several states and even members of the public who have clashed against prediction markets, sending cease & desist letters or launching full-on lawsuits against providers. Protected by federal laws, these CFTC-governed platforms have come under heat. Federal permissions or none, there are uncertainties about their future – just look at how California clamped down on social casinos, forcing the big B2B game vendor Pragmatic Play to exit the US.

DraftKings and FanDuel may be onto something big. Or, they may be jumping into a market that could potentially implode under legal threats and political pressure. In a way, it’s a win-win because if these prediction markets have to pull their sports products (or scale back on them), it can lead customers back to traditional books. Like DraftKings and FanDuel.

When the New Prediction Markets May Roll Out

DraftKings’ press release stated that the operator wants to launch “DraftKings Predictions” for mobile apps in the coming months. At first, it will focus on non-sports event contracts, relating to a smattering of subjects, from finance to culture and entertainment. But the sports prediction markets wouldn’t be too far behind. It coincides with FanDuel’s “FanDuel Markets”, which is also cited for late 2025. DraftKings may beat its rivals to the punch and roll out its app first, but the two will most likely come out around the same time.

Those comments made by Jason Robins, quoted at the beginning of the article, still have a ring of caution around these prediction markets. This is not going to be a full pivot for the sportsbook, but rather an experimental turn in which they can catch the hype around prediction markets first. Jason Robins doesn’t seem to think that this is the start of a new revolution. Conventional sportsbooks have the luxury of providing players with an immense catalog of bets, which prediction markets can’t really do. They deliver fixed odds, and you can place any bet listed on the platform. Prediction markets tend to have limited sports-style wagering opportunities.

However, it will be an interesting story to follow up, as the NFL heads towards the playoffs, and the imminent Super Bowl awaits. If history has taught us anything, it is that the Super Bowl betting frenzy should be the climax of this building momentum. Just how that pans out for the 2026 Super Bowl will be a telling sign of whether prediction markets are here to stay, or just a passing fad.