DraftKings renews push for prediction markets with NFA membership filing

DraftKings has reapplied for membership in the National Futures Association (NFA), a move that could position the sportsbook operator to enter the U.S. prediction markets industry alongside rivals Underdog, PrizePicks, and Fanatics.

The filing, made on June 24 under the name Gus III Holdings LLC, seeks approval for DraftKings to operate both as a Swap Firm, which would allow it to run its own exchange as a Designated Contract Market (DCM), and as an Introducing Broker, a role not yet seen in prediction markets.

Executives tied to the new filing include DraftKings CEO Jason Robins, CFO Alan Ellingson, and co-founder Paul Liberman. DraftKings previously submitted an application under Gus II Holdings but withdrew it in April.

Robins had told analysts during the company’s second-quarter earnings call that DraftKings is “actively exploring” prediction markets and is in “monitor mode.” The Boston-based operator has also reportedly explored buying its way into the space, including talks to acquire Railbird, which already has U.S. Commodity Futures Trading Commission (CFTC) approval as a DCM.

Other fantasy sports and betting companies are also pursuing NFA membership. Underdog applied under UDM LLC in April to be both a Swap Firm and a Futures Commission Merchant (FCM), and filed a second application as G&B Broker seeking Swap Firm and Introducing Broker approval.

PrizePicks applied on May 28 under Performance Predictions II LLC for Swap Firm and FCM status. Fanatics Betting & Gaming filed in May as Morton St. Trading OpCo for Swap Firm and Introducing Broker approval, later expanding its request to include Forex Firm status.

NFA membership is not required to operate in prediction markets - Kalshi, an existing CFTC-regulated DCM, is not a member - but it is a necessary step for FCMs, which connect customers to registered exchanges. The process includes vetting of principals and adherence to ethical standards.

Market potential is significant. Robinhood, which acts as an FCM offering access to Kalshi’s event contracts, processed about $1 billion in trades during the second quarter, generating roughly $10 million in revenue with limited overhead.

The new applications underscore how major operators are positioning for opportunities in event-based markets, even as the legality of sports prediction contracts remains contested in federal courts.