PrizePicks secures FCM status as Allwyn acquires 62.3% stake in $2.5B deal

PrizePicks has received approval to operate as a Futures Commission Merchant (FCM) shortly after announcing that Allwyn Entertainment will acquire a controlling interest in the company.

The approval, granted to subsidiary Performance Predictions II LLC, makes PrizePicks the first business affiliated with a daily fantasy sports operator to secure FCM registration from the National Futures Association (NFA). The designation allows the company to accept orders from customers to buy and sell futures contracts listed on Designated Contract Markets (DCMs) regulated by the Commodity Futures Trading Commission (CFTC). The entity will operate under the name “PrizePicks Predict.”
Mike Ybarra, CEO of PrizePicks, said in a release: “The honor of being the first sports entertainment platform to receive an FCM registration from the NFA is a testament to our industry-leading compliance and consumer protection programs that both the NFA and CFTC demand. Acting Chairman Caroline Pham’s vision for the CFTC promotes innovation while reinforcing the importance of strong regulatory standards. Her leadership has set a thoughtful tone for the agency and our industry.”

Chief Legal Officer and Head of Policy Jason Barclay added: “As the nation’s leader in predictions, this is a defining moment for us. We are grateful to the NFA for its thoughtful process and diligent work on our application.”

Allwyn’s planned acquisition

The regulatory approval coincided with Allwyn Entertainment’s announcement that it would acquire a 62.3% stake in PrizePicks. The deal, which values the company at approximately $2.5 billion, includes an initial cash commitment of $1.6 billion and is expected to close in 2026.

Allwyn operates lotteries in Illinois and the United Kingdom and has sought to expand beyond traditional lottery offerings. The transaction marks its largest US investment to date. PrizePicks’ existing leadership team, including Ybarra, will remain in place after the deal closes.

Position in prediction markets

The FCM status permits PrizePicks to enter the regulated prediction markets space, where it can collaborate with platforms such as Kalshi or Crypto.com to facilitate event-based contracts. Competitors are also exploring the vertical. FanDuel has partnered with CME Group, DraftKings has held discussions around acquisitions, and Polymarket reentered the US by purchasing a CFTC-certified exchange.

Other operators have encountered hurdles. Daily fantasy app Sleeper has accused the CFTC of unlawfully refusing to approve its pending application. DraftKings, Fanatics Betting & Gaming, and Underdog also have open applications with the NFA.

PrizePicks would be only the second fantasy operator active in regulated prediction markets. Earlier this month, Underdog Sports began offering sports prediction markets through a partnership with Crypto.com, though it does not hold FCM registration and instead operates as a technology provider.

Business challenges ahead

PrizePicks recently adjusted its core product strategy, moving away from against-the-house Pick’em contests to a peer-to-peer model called Arena. The shift began in California in June and expanded nationwide in August, a move driven by regulatory considerations but one that may pressure future revenue growth.

Analysts at Regulus Partners noted that while PrizePicks promotes availability across more than 90% of US states and Canadian provinces, its presence in regulated jurisdictions such as New York, New Jersey, Michigan, and Ontario is limited to free-to-play games. These markets are dominated by established sportsbook operators DraftKings and FanDuel.

Regulus also observed that the $1.6 billion cash commitment represents a significant investment by Allwyn but carries uncertainty. Analysts suggested that the transaction could be as much about limiting competitors’ expansion into real-money prediction markets as it is about establishing a durable U.S. business.