DraftKings has entered the prediction markets space through its Predictions app, launching in 38 states under Commodity Futures Trading Commission oversight. The move creates direct competition with Kalshi and crypto-based Polymarket, while giving DraftKings access to California, Texas, and Florida—states where its sports betting app does not operate.
DraftKings CEO Jason Robins noted that only about 3% of the company's sports betting customers also use Kalshi, suggesting the prediction markets contest will largely be fought over new users. Robins argued that DraftKings' national reach, marketing data, and pricing models provide competitive advantages, despite Kalshi's head start of less than a year.
Kalshi recently raised $1 billion at a $40 billion valuation, according to the source, up from a $22 billion valuation in May.
Regulatory Uncertainty
The prediction markets sector faces competing legal interpretations that could shape its future. In August, the Ninth Circuit Court of Appeals ruled that Kalshi's sports contracts fall under Nevada gambling law rather than federal commodities regulation. Robins said this decision did not affect DraftKings, as the company never operated in Nevada.
Utah filed criminal charges against Kalshi and its co-founders on Wednesday, the same day the CFTC announced a lawsuit against Utah. The Ninth Circuit's ruling conflicts with a Third Circuit decision favoring Kalshi, making Supreme Court review a possibility.
Polymarket temporarily froze trading on its international crypto-based exchange after users reported drained wallets tied to a third-party provider. The company said it would reimburse affected customers.
The outcome of regulatory disputes could determine whether traditional regulated incumbents or crypto-based venues establish the terms for prediction markets as the category expands.
