DraftKings Sportsbook Pursuing License to Offer Predictions Market

The emerging sports predictions market may be about to get far more competitive.

DraftKings has applied with the National Futures Association (NFA) to begin offering a sports predictions market. If the Commodity Futures Trading Commission (CFTC) regulator approves the application, the operator can launch their new DraftKings Predict platform. They would be the first sports betting operator to enter the emerging industry.

There is no estimated approval date as of yet.

DraftKings Looking to Stay Ahead of Rivals

The American sports betting market has become incredibly competitive, leaving operators looking for new ways to compete. DraftKings believes it has found that in the sports predictions markets, where no other sportsbooks currently operate.

While DraftKings has been eager to enter the market for some time, not all its rivals feel the same way. They believe that prediction markets should qualify as gambling and be subject to the same rules and taxation. Some operators are even attempting to end the industry altogether to protect their own.

How a Sports Predictions Market Works

Many sports betting industry experts have argued that sports prediction markets are a form of legal gambling, and with good reason. These markets allow users to purchase “contracts” for a player or team to win an event. Those contracts rise in value if they win, like being paid out on a bet. 

These markets appeal to many people looking for another way to bet on sports. They feel their odds are better than with sportsbooks, allowing them to win bigger payouts. 

Predictions Market Offerings Under Federal Scrutiny

Over the last year, these controversial new markets have begun to pop up in the US. They became prominent this winter when several platforms offered markets for Super Bowl LIX. While this drew many new customers in, it also gained the attention of the CFTC.

The federal department is investigating these markets and has issued orders for operators to halt them until it is completed. The concern is that the new industry could further expand the rise in problem gambling as users don’t have the protections offered by sportsbooks and regulators.

It seemed the CFTC would shut these markets down before the White House's leadership changed, but that is no longer the case. Several new leaders have spoken out favoring sports prediction markets, and funding and staffing have suffered drastic cuts. 

Apparently, DraftKings believes the CFTC will drop the investigation, allowing it to become the first sportsbook to enter the market.