DraftKings to Get into Prediction Markets as It Considers Railbird Purchase
DraftKings is reportedly exploring the possibility of acquiring Railbird, a New York-based operator of prediction markets that recently gained regulatory approval for US operations. The development was first reported by Front Office Sports, quoting an unidentified source, and marks a potential strategic expansion for DraftKings into a new and rapidly evolving sector of financial and event-based wagering.
LISTEN TO THIS ARTICLE:The news comes just months after DraftKings withdrew an application with the National Futures Association (NFA). This would have allowed the company to formally enter the prediction markets space through regulatory oversight.
Related: DraftKings to Refund 7,000 Connecticut Customers in SettlementWhile DraftKings did not confirm specific details of the potential acquisition, the company acknowledged that it routinely engages in discussions with various businesses as part of its standard operations. DraftKings stated that it communicates with a range of companies on a variety of matters but generally refrains from commenting on the nature or specifics of any possible acquisition.
Railbird received formal approval in June from the Commodity Futures Trading Commission (CFTC) to operate as a designated contract market. This status allows the company to legally offer trading on future events in the U.S., similar to platforms like Kalshi and Polymarket.
Railbird was founded in 2021 by Miles Saffran and Edward Tian. The startup has positioned itself as a serious contender in the regulated prediction market landscape, especially with its newly secured CFTC approval.
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M&A Constantly on DraftKings' Radar
DraftKings has demonstrated a consistent willingness to pursue acquisitions as a strategy to expand its operations into new verticals and to enhance its product offerings. In 2023, the company acquired Jackpocket, a leading online lottery provider, in a $750 million deal.
This acquisition gave DraftKings access to the rapidly expanding digital lottery sector and a new customer base that could potentially be transitioned to other online gaming products, including sportsbook and casino services. The Jackpocket acquisition also aligned with broader trends in state-level legalization of online lottery platforms.
Later that same year, DraftKings acquired microbetting technology company Simplebet. The acquisition enabled DraftKings to expand its presence in the live betting space, an area expected to see significant growth as sports betting becomes more embedded in real-time sports viewing experiences.
Should DraftKings proceed with a deal for Railbird, it would mark another step in its strategy to diversify and future-proof its offerings across regulated betting and financial prediction services. Gaining control of Railbird would not only provide DraftKings with a pathway into prediction markets, but also allow it to pre-empt Kalshi and Polymarket.
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