DraftKings Launches Sports Prediction Markets in California

DraftKings is done waiting for sports betting to be legalized in the Golden State.

The sports betting giant has officially launched sports markets on its DraftKings Predictions platform in California. Because the industry is not currently considered a form of gambling under federal law, the operator can offer sports markets alongside rivals like Kalshi and Polymarket. 

California is the largest US market that has not legalized retail or online sports betting.

A Familiar Name For Bettors

Kalshi and Polymarket have been offering sports markets in California for some time, giving them a head start on DraftKings. However, the two operators only exist in the prediction market space, meaning their reputation is still being built among US bettors.

That is changing as the industry grows in popularity, but they’re still struggling to win public trust.

By contrast, DraftKings is one of the most well-known brands in the US. They advertise during most major sports events and offer a wide range of sports media featuring some former players and top journalists. This exposure has helped them dominate US sports betting market share alongside FanDuel and has made them one of the most trusted names in sports.

With many US bettors still wary of or learning to use prediction markets, having a name they know and trust could help DraftKings cut deeply into California market share. 

DraftKings Takes Big Risk

Sportsbooks offering prediction platforms have a good reason for avoiding California so far. 

If and when California legalizes sports betting, it could eclipse New York and become the country’s largest market. As a result, sportsbook operators with prediction platforms have stayed out of the state, hoping to avoid conflict that could affect future sportsbook licensing.

By launching sports markets, DraftKings is angering California lawmakers and gaming tribes, taking a massive risk. As a result, we are left to wonder whether the operator doesn’t believe legalization is coming, or fears it will result in a tribal-centric framework that would cut commercial sportsbooks out.

Did the Tribes Drop the Ball?

California’s gaming tribes have a lot of power in the state, thanks to a tribal gaming industry that rivals the revenue seen from neighboring Las Vegas. This has given them a large bankroll for lobbying and public messaging, helping defeat all efforts to legalize sports betting. 

However, leaders have confirmed plans to push for it in 2028.

The opposition from tribes comes after a public battle with local card rooms, which they accuse of dishonest negotiations when creating sports betting bills. While this will help ensure the tribes will control the market once legalized, there is reason to wonder if their opposition will come back to haunt them.

With DraftKings now live, bettors in the state now have a familiar name to wager with. This will make it hard for a regulated California market to win those bettors back, limiting its potential revenue. That’s a significant problem for the state, seeing as it can’t tax these platforms.