Jason Robins, CEO of DraftKings, recently entered his eighth NFL season since the company launched its commercial sportsbook, following the US Supreme Court’s decision to legalize betting beyond Nevada. As the football season picks up, prediction markets have emerged as a new trend, offering potential in states where traditional sports betting remains illegal.
Speaking at the 2025 BofA Gaming and Lodging Conference, Robins highlighted the potential of sports derivatives in these non-betting states. Although he didn’t specify locations, it’s plausible he was referring to states like California and Texas. These areas could provide a substantial market for sports derivatives, even though DraftKings hasn’t yet signaled an imminent launch of a prediction market exchange. Robins explained the rationale: “It’s crucial to ensure we’re ready with the right strategy. The total addressable market is likely significant in states without legal online sports betting.”
Despite the allure, Robins is not rushing to be the first mover in this arena. He stressed a cautious approach in identifying prediction market opportunities, as articulated during DraftKings’ August earnings call. Unlike traditional sportsbooks, prediction markets such as those offered by Kalshi and Crypto.com resemble derivative markets, dealing in futures similar to commodities like oil and soybeans.
Meanwhile, other industry players are making strides. Flutter, a major competitor through its brand FanDuel, recently partnered with CME Group to develop a new prediction market focused initially on non-sports contracts. Crypto.com, in conjunction with fantasy sports company Underdog, plans to integrate prediction markets into Underdog’s app. Furthermore, Polymarket received approval from the US Commodity Futures Trading Commission to operate prediction markets nationwide, albeit without state-level regulation. Polymarket had previously settled with the federal government over unapproved event contracts.
Robins noted that DraftKings must consider state regulatory environments more carefully than federally-regulated exchanges like Polymarket. “The real question is where this space will evolve. Federally, it seems here to stay, but states present a different challenge,” he observed, emphasizing the need to navigate state regulatory risks and revenue implications.
The role of market makers in these exchanges presents another hurdle. While traditional sportsbooks act as the house, betting exchanges rely on market makers to ensure liquidity. These market makers match trades, such as those predicting outcomes of NFL games or political elections. For example, during the 2024 elections, Kalshi handled a large trade betting on Donald Trump, necessitating market makers to balance bets on the opposing candidate.
Robins acknowledged the complexities of launching a prediction market, pointing out the challenges in offering a range as comprehensive as DraftKings’ sportsbook. Liquidity management and market maker partnerships are key components in this model. In contrast, DraftKings controls bet limits to manage risk and offer a variety of betting options, a flexibility that might be constrained in a prediction market scenario.
As the NFL season commenced, Kalshi reported a trading volume of $441 million over the opening weekend, slightly less than its presidential election market figures. Kalshi’s pricing on event contracts was noted to be higher than that of DraftKings and FanDuel, indicating room for competitive pricing improvements.
The expansion of market makers on platforms like Kalshi could narrow spreads and enhance customer pricing. However, traditional sportsbooks may exhibit different pricing dynamics during promotional periods, such as the NFL season’s start.
DraftKings has yet to announce a timeline for deciding on a prediction market launch. The company remains focused on strategic expansion, weighing the potential benefits against regulatory and operational challenges in this evolving segment of the gaming industry.
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