Way back in time before 2018’s repeal of PASPA, when online sports betting was a strictly nefarious, off-field, affair, DraftKings and Flutter entered the market as the great DFS disruptors.
Today the two digital channels have become the undisputed heavyweights of the market, trailed, respectably, by the MGM Resorts International-Entain combo, BetMGM.
But like all leaders Massachusetts-origin DraftKings and Flutter-owned FanDuel have got a clear target on their back, and in the last 12-months the two iGaming sportsbook giants, along with BetMGM, have been feeling the heat from red-hot, coming prediction market websites Kalshi, Robinhood, Polymarket, et al.
Perhaps it’s a case of perfect timing, but certainly it’s a sign of the times, and the Trumpian impetus, but Kalshi and its prediction market competitors have been slaying all regulatory and legislative opponents who have been trying to block their seemingly inexorable rise.
Kalshi, founded by elite M.I.T. (Massachusetts Institute of Technology) graduates Tarek Mansour and Luana Lopes Lara in 2018, when online sports betting was given the legal green light, have–for heaven’s sake–even found a way of operating in the two mega virgin online sports betting markets of California and Texas.
Railbird
Little wonder then, that with such riches at stake–and still on offer–that DraftKings Founder and CEO Jason Robins has now decided to make a major move on the prediction market juggernaut by buying a newly-licensed site called Railbird.
Robins first tested the prediction market in March this year by trying to launch a site called, wait for it, DraftKings Predict. For reasons unknown his application to register with industry body the National Futures Association (NFA) was withdrawn in short time.
But now, adopting the time-honoured tactic of “if you can’t beat ‘em, join ‘em”, DraftKings–in news that has spread through the iGaming hemisphere like wildfire–is in serious negotiations to acquire Railbird Exchange.
Founded in 2021 by Miles Saffran and Edward Tian, both financial analysts at New York City investment firm Point72, with funding from a clutch of cutting-edge venture capitalists, Railbird was approved as a designated contract market by the Commodity Futures Trading Commission (CFTC) only last month, June, and is expected to launch later this year.
By its own description it “is a federally-regulated prediction market that allows users to trade on the outcomes of real-world events – from economic indicators and public policy to entertainment and cultural trends”.
At this juncture no other details of the impending deal are available.
FanDuel-Kalshi Tie-in?
But if DraftKings does indeed complete the deal, it won’t be long before Flutter’s FanDuel makes a similar move, concur most analysts, if it isn’t already imminent.
“Event contracts represent a largely untapped opportunity for individuals and businesses alike to hedge risk,” Railbird said in a press release, soon after gaining its CFTC approval.
“We are looking forward to allowing our users to apply the power of capital markets to everything from daily news to societal changes.”
Both Saffran and Tian are keen multi-sports fans.
And the timing of the putative DraftKings bid, as the traditional September start of the 2025 NFL season–the biggest ongoing event in American sports betting–draws ever closer, has not been lost on observers.
As for further surprises on the prediction market front.
Look for a FanDuel-Kalshi tie-in.
Flutter’s dynamic CEO Peter Jackson plays second fiddle to no man, especially Jason Robins of DraftKings.
Watch this space!
