DraftKings Eyes Prediction Markets with New NFA Registration
LISTEN TO THIS ARTICLE:DraftKings appears to be preparing for a move into the prediction market space. The company recently registered a new entity, DraftKings Predict, with the National Futures Association (NFA), a regulatory body that oversees the US derivatives industry under the Commodity Futures Trading Commission (CFTC).
The move suggests DraftKings is looking to expand beyond traditional sports betting into the rapidly evolving prediction markets sector, which is currently attracting both regulatory attention and industry interest.
CEO Jason Robins Shows Interest in Prediction Markets
The Closing Line first reported the registration of DraftKings Predict, formally known as Gus II LLC. While specific details about DraftKings’ plans remain unclear, industry experts believe it is a major move that could position the company for future regulatory changes.
DraftKings CEO Jason Robins has previously expressed interest in prediction markets. During the company’s year-end earnings call, he confirmed that DraftKings is closely monitoring the space. He later reiterated this stance at a Morgan Stanley event and said that the company sees prediction markets as an opportunity for expansion rather than a competitive threat.
Robins also spoke of an upcoming CFTC meeting that will address regulations for sports-related event contracts. This discussion could be key in determining whether such bets fall under gambling laws or are classified as part of the broader prediction market sector.
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Unclear Regulations Present Challenges
However, the legal landscape for prediction markets in the United States remains uncertain. The CFTC has previously raised concerns about prediction markets tied to politics and sports, and questioned their regulatory classification. However, there are shifting perspectives within the commission, such as the addition of Brian Quintenz, a former board member of the prediction market platform Kalshi, which suggest potential regulatory changes.
Meanwhile, state-level regulators have also started making moves. The Nevada Gaming Control Board recently became the first state authority to issue a cease-and-desist order against a prediction market platform, which suggests there could be future obstacles for companies like DraftKings. If DraftKings moves forward with its new entity, it may have to deal with both state and federal regulations before officially launching prediction market services.
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