DraftKings, the number two digital sports book and iGaming outfit in the United States, has officially joined the great prediction markets race with the acquisition of Railbird Exchange, LLC.
Financial details of the deal were not disclosed, but the buy triggered an immediate eight percent surge in DraftKings shares on New York City’s Nasdaq platform.
Despite the legal precarity of the predictions market space–leading marketeers, such as Kalshi and Polymarket, for example, are embroiled in court proceedings in several states–, Massachusetts-origin DraftKings would appear to be confident in the fiscal worth of de-regulated Futures in the age of “being trumped and who cares”.
“The addition of Railbird positions us to win in this incremental space,” affirmed DraftKings Co-founder and CEO Jason Robins in a statement to the media.
Real World Outcomes
DraftKings, who trail Flutter Entertainment’s FanDuel in the U.S. digital betting stakes, said it now plans to launch “DraftKings Predictions” in the coming months, a mobile app allowing customers to trade regulated event contracts “on real-world outcomes across finance, culture, and entertainment”.
Railbird was founded in 2021 in New York City by Miles Saffran and Edward Tian. Last year its 11-strong team generated a relatively-modest US$1.7 million (£1.27m) in revenue – a far cry from market leader Kalshi, who are believed to have already crossed the billion dollar threshold.
But, crucially, the start-up has a full licence from the regulatory U.S. Commodity Futures Trading Commission (CFTC).
Patently, the acquisition provides DraftKings with the tech and know-how to operate their own fully fledged prediction market, to be called–yes, you’ve guessed it–DraftKings Predictions.
Competition
And from a competition perspective, it keeps them abreast of arch rivals FanDuel, who bought their own entré into the prediction markets space by partnering with Chicago-based CME Group just weeks ago.
“We are excited about the additional opportunity that prediction markets could represent for our business,” said Jason Robins.
“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.”
Saffran Responded: “This is a transformational moment for our company, and we are thrilled to be a part of the future of DraftKings.
“DraftKings’ scale and leadership in the industry creates meaningful opportunities for our team and platform.”
