DraftKings Changes Strategy
The report follows DraftKings' decision to withdraw its application for a prediction market license in April. However, leadership continued to assert that they were closely monitoring the sports prediction market industry. That decision may pay off if the company can purchase Railbird Exchange, which would have allowed the sportsbook to launch its own prediction market far sooner.
Top rival FanDuel Sportsbook has also taken steps towards offering its own sports prediction market platform. Reports are that the industry-leading sportsbook is in talks with Kalshi over a partnership, those no agreement has been reached.
Bad News for the Sports Betting Industry
The recent DraftKings report is a troubling sign for the sports betting industry. It means that both industry-leaders are actively pursuing partnerships is already licensesd operators. This would allow them to have a massive headstart over rival sportsbooks, who many not be able to offer prediction markets for years.
If sports prediction markets end up being protected by the CFTC and federal courts, it will have a massive impact on the country’s sports betting industry. The lack of regulations and lower taxes allow for better odds and a smoother betting experience. This is expected to lure many bettors, especially with the country’s most popular sportsbooks entering the growing industry.
On top of lost revenue, the sports betting industry will also lose its two biggest advocates. Losing that money will make it hard for states and other operators to finance a fight to ban sports prediction markets. If FanDuel and DraftKings decide to invest in the protection of the controversial markets, it could lead to an irreversible blow to the country’s sports betting industry.
Legal Status of Prediction Markets Remains Murky
While DraftKings and FanDuel are attempting to break into the sports prediction industry, the move remains a gamble. That’s because the vast majority of US states, tribes, and sportsbooks have united in opposition to these markets. They have been sounding the alarm about the dangers of sports prediction markets as legal battle begin to unfold across the US.
Former CFTC Chair Brian Quintez is the White House’s nominee to retake the position. He has deep ties to the prediction market industry and top operator Kalshi. He has been stout in his defense of the industry, and made no secret of his intention to protect it if approved to take over the regulator.
While some lawmakers have called for the CFTC nominee to be rejected, party politics may lead some to support him despite the threat to the states they represent.
