DraftKings Launches Predictions as Courts and Lawmakers Move In On Kalshi

On 19 December, DraftKings launched its prediction market, DraftKings Predictions, in its latest expansion. Considering it only acquired Railbird Technologies Inc, and its subsidiary exchange market, Railbird Exchange LLC, back at the end of October, DraftKings has whipped up and delivered this new platform in just over a month. The product is available in 38 states, including significant markets where sports betting is still illegal. The biggest of these are Texas and California, as well as Florida, which has a structured gambling monopoly owned by the Seminole Tribe.

Don’t be surprised if you see a new DraftKings app in the App Store or Android Store. The DraftKings Predictions will be rolled out on mobile platforms in the days following the announcement, and with it, DraftKings intends to push itself into the emerging betting trend before its long-term rival, FanDuel. It seems a strong move on DraftKings part, as they can use their marketing power to edge out potential prediction market rivals like Underdog or Robinhood, perhaps even putting Kalshi and Polymarket to the test. But, amid the legal tug of war between lawmakers and prediction market operators, could DraftKings be late to the party?

Background of DraftKings Predictions

DraftKings Predictions rolled out on December 19, just ahead of Christmas, but perhaps more importantly, around 1.5 months ahead of the Super Bowl LX. We mention that because it was the Super Bowl betting activity last year that really fed the US frenzy for prediction markets, specifically among sports bettors. And now DraftKings has propped up its new prediction app well ahead of schedule, available in 38 US states, covering all 4 US major sports and collegiate events. From the moment FanDuel formed a partnership with CME Group back in late August, it seemed DraftKings’ biggest rival was going to beat them to the punch.

Jason Robins, the DraftKings CEO, stated the company was not bothered by prediction markets, not seeing them as a true rival for conventional sportsbooks like DraftKings. That was back in early September, shortly after FanDuel had gone public with its aspirations to launch a prediction market. From then until now, DraftKings acquired Railbird, announced it would launch a product of its own, and has even gone ahead and done just that. Leaving FanDuel trailing way behind, and DraftKings celebrating a win in late 2025.

A Peek Into DraftKings Predictions

DraftKings Prediction currently covers financial markets, crypto, and sports markets. Though the sports markets are only available in 15 states – we will explore this a little later. Just like the other prediction markets in the US, it has real world event contracts, mostly relating to financial exchanges and cryptocurrency prices. There are no predictions based on culture, entertainment, politics, or other categories like you could find at Kalshi or Polymarket, but DraftKings Predictions has only just been launched.

As with other products rolled out by the sports betting giant, it is expected to bolster its offering in the next few weeks, rolling out more player centric features and functionalities to stand out. But while DraftKings may have gotten the better of FanDuel on this occasion, prediction markets are really a completely independent market of their own. And they have other industry giants that DraftKings will have to take on.

The Big Prediction Markets Right Now

Kalshi remains one of the biggest prediction markets out there, and Polymarket, having been exiled from the US in 2022, returned in 2025 through its acquisition of QCEX, gaining the necessary approval to stage a comeback. These are two of the biggest exchanges in the US, followed by Crypto.com, a Singpore based prediction market and financial derivatives exchange. Another financial derivatives exchange is Robinhood, which partnered with Kalshi to launch prediction markets of its own.

Fanatics became the first sportsbook to launch a prediction market when it rolled out Fanatics Market on December 3. These alternative betting products are starting to pile up, and while Kalshi and Polymarket still dominate the trades, US sports fans are slowly starting to explore alternatives. These prediction markets, which have often been compared to sports betting, are not actually legally defined as sports betting platforms.

They are seen as financial derivatives instead, with binary contract markets, and so they fall under the jurisdiction of the federally regulated Commodity Futures Trading Commission. They are legal in all 50 states, and so sports fans in states with no legal betting options, like California and Texas, can turn to these platforms instead.

Class Action Lawsuits and Regulatory Woes

Conventional sportsbooks, while interested in these revolutionary new products that can give them access to restricted states, will also take note of the mounting legal pressures that prediction markets are facing right now. Sports betting is spreading across the US, and with Missouri launching legal sports betting on December 1, there are now 39 states where it is legal.

Prediction markets, alongside fantasy sports, social sportsbooks, and peer to peer betting exchanges, may have taken advantage of a legal loophole up til now. But regulators are starting to push back. New York just banned social sportsbooks, joining the list of states that have outlawed these alternative betting products. And 3 more states look poised to follow suit, with Indiana, Maine and Florida also considering banning the controversial sweepstakes sportsbooks.

Alternative Betting Products At Risk

Kalshi, the most prominent prediction market in the US, has been hit with many class action lawsuits in recent months. Regulators in Nevada, New Jersey, Maryland, Ohio, Connecticut and New York have either sent out cease and desist letters to stop the sports betting style products, or, in the case of New Jersey, ordered Kalshi to stop their sports contracts.

In response, Kalshi has taken to the federal courts, filing lawsuits to block enforcement and ask for preliminary relief from the charges. The cases are still ongoing, with the preliminary relief offering Kalshi the chance to block the cease and desist orders, but not all courts seem to be siding with Kalshi.

It is contentious territory, as even most of the US public thinks they are similar to sports betting. But it is up to state and federal lawmakers to draw the line and decide whether or not Kalshi, and other prediction markets, can offer sports related contracts or not.

Could 2026 Be the End of Prediction Markets?

Sweepstakes casinos and sports betting platforms are in the middle of a similar legal battle across the US. However, their predicament doesn’t seem as positive, as New York recently joined the list of states that have banned sweepstakes casinos. And we know there are 3 more states that could also ban sweepstakes. Like prediction markets, they offer products that are similar to sports betting, but without ticking the boxes to fall into the legal definition of real money sports betting.

The tide may be turning for sweepstakes casinos and sportsbooks. But where prediction markets land is really anyone’s guess. In the worst case scenario for Kalshi, Polymarket, Crypto.com and all the others – including DraftKings now – the platforms will have to delist all their sports related content. In the best case scenario for them, they will be given permission to operate in all 50 states with their federal licenses. Sports markets and all. The middle ground may seem some sports related content taken out, or regulation on a state by state basis, which could effectively cut off prediction markets from some pivotal markets.

2026 will be the decisive year for prediction markets, and ultimately will determine whether they will become a permanent feature of the broader US sports betting sector. Or, whether they will be a short lived experiment, and be replaced by a new big trend.