DraftKings to launch new event contracts app ‘DraftKings Prediction’ after acquiring CFTC-licensed Railbird

DraftKings has announced the acquisition of Railbird Technologies Inc. and its subsidiary Railbird Exchange, marking its official entry into the prediction markets sector. The deal gives the sports betting company access to a Commodity Futures Trading Commission (CFTC)-registered designated contract market (DCM), allowing it to operate and partner in trading event contracts based on real-world outcomes.

As part of the deal, DraftKings will introduce DraftKings Predictions, a new mobile platform that allows users to trade event contracts linked to non-sports outcomes in categories such as finance, culture, and entertainment. The company said the product “will have the flexibility to connect to multiple exchanges,” meaning it could also feature contracts from other CFTC-approved platforms like Kalshi. The app is expected to debut in the coming months.

The acquisition, confirmed through a company statement on Tuesday, enables DraftKings to expand beyond its traditional sports wagering business. “We are excited about the additional opportunity that prediction markets could represent for our business,” said Jason Robins, CEO and co-founder of DraftKings. 

“We believe that Railbird’s team and platform—combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products—positions us to win in this incremental space.”

Founded in 2021 by Edward Tian and Miles Saffran, Railbird secured its CFTC license in July after an extended approval process that began in 2022. The firm, backed by Y Combinator, has yet to launch its own product but has developed a proprietary system for regulated event markets. Railbird’s clearing services are provided by QC Clearing, which is owned by Polymarket.

“This is a transformational moment for our company, and we are thrilled to be a part of the future of DraftKings,” said Saffran, who serves as Railbird’s CEO. “DraftKings’ scale and leadership in the industry create meaningful opportunities for our team and platform.”

Although the launch announcement did not include sports-related markets, DraftKings noted that the product’s scope “may expand into additional categories over time.” This wording leaves open the possibility that sports events could eventually be included, though such a move would raise regulatory challenges.

State gaming regulators in several jurisdictions, including Ohio, Arizona, and Michigan, have stated that sports event contracts constitute unlicensed gambling. Some regulators have warned that sportsbook licensees could face disciplinary action, including license suspension or revocation, if they participate in such markets. Ohio’s Casino Control Commission has also cautioned that even partnerships with entities offering these contracts could be grounds for enforcement.

DraftKings initially filed for registration with the National Futures Association (NFA) in 2024, withdrew the application in March, and reapplied in June before securing this acquisition.

In an August earnings call, Robins said DraftKings was in “monitor mode,” observing developments in the event contract sector before making a move. Earlier this month, he commented that “I just don’t see a world” where customers prefer prediction markets to sportsbooks in states where both are available, but acknowledged their potential in states where sports betting is still illegal, such as California and Texas.

The acquisition follows similar moves by competitors. FanDuel announced a partnership with CME Group in August to form a joint venture seeking futures commission merchant (FCM) status, focusing on short-term markets tied to commodities and financial indices. Meanwhile, Underdog Fantasy has launched a prediction market product through a partnership with Crypto.com, offering sports-based event contracts in states without legalized sports betting.

The purchase price of Railbird was not disclosed. Sullivan & Cromwell LLP advised DraftKings on the deal, while Moelis & Company acted as financial advisor to Railbird, which was also represented by Proskauer Rose LLP and Kirkland & Ellis LLP.

Following the announcement, DraftKings’ shares rose 7.1% in after-hours trading to $36, adding roughly $1.2 billion to its market capitalization and valuing the company at approximately $18 billion. Despite the gain, DraftKings' stock remains down over 25% since late August, prior to the football season boost that benefited competitors such as Kalshi.