DraftKings is making ready to make a serious enlargement past its conventional sportsbook operations with the introduction of a brand new platform known as DraftKings Predictions, which can permit customers to commerce on the outcomes of sports activities occasions. The corporate confirmed that the product will debut “within the coming months,” signaling an formidable transfer into the rising prediction markets sector—one that would check the bounds of present state gaming legal guidelines.
The announcement was included in DraftKings’ third-quarter 2025 earnings report, the place CEO and Co-founder Jason Robins described his optimism in regards to the firm’s course. “That is probably the most bullish I’ve ever felt about our future,” Robins stated. “Underlying development within the enterprise is accelerating and we’re excited to launch DraftKings Predictions within the coming months, which we view as a big incremental alternative.”
The transfer follows DraftKings’ October acquisition of Railbird Applied sciences Inc., a federally licensed trade acknowledged by the Commodity Futures Buying and selling Fee (CFTC). This buy provides DraftKings a regulatory basis for working within the predictions area, permitting it to supply contracts based mostly on future sporting occasions.
Not like its conventional sportsbook—which operates beneath state-level playing legal guidelines—DraftKings Predictions will concentrate on states the place sports activities betting has but to be legalized. In a shareholder letter, the corporate acknowledged it intends to prioritize “the roughly two-dozen states” with out lively DraftKings Sportsbook operations, together with main markets akin to California, Texas, and Florida, which collectively account for a couple of quarter of the U.S. inhabitants.
Regulatory Resistance and Authorized Challenges
Whereas DraftKings’ new enterprise might open huge new markets, it additionally raises important regulatory questions. A number of state gaming authorities have cautioned licensed operators towards collaborating in prediction markets, suggesting such actions might violate state playing statutes.
In Michigan, as an example, the Michigan Gaming Management Board (MGCB) warned operators that facilitating prediction markets might have an effect on future licensing choices. “The Michigan Gaming Management Board understands that sure licensees could also be contemplating alternatives to function, supply, or facilitate entry to prediction markets,” wrote Henry Williams, the MGCB’s Govt Director. He emphasised that many of those choices “wouldn’t function in accordance with state gaming legal guidelines or pursuant to state-issued gaming licenses.”
Equally, the Ohio On line casino Management Fee issued letters discouraging involvement in sports activities occasion contracts, prompting prediction market operator Kalshi to sue each the fee and the state’s lawyer basic. Regulators in Arizona and Nevada have launched comparable advisories.
Authorized consultants imagine these disputes might finally attain the U.S. Supreme Court docket, as prediction market operators—together with Kalshi and Polymarket—argue that their merchandise perform as federally authorized commodities exchanges quite than state-regulated playing actions.
Enterprise Development and Strategic Focus
Regardless of the potential authorized headwinds, DraftKings stays assured in its development trajectory. The corporate reported $1.144 billion in income for the third quarter of 2025—a 4% improve year-over-year—pushed by robust buyer retention, improved sportsbook maintain percentages, and expanded iGaming exercise.
CFO Alan Ellingson highlighted the corporate’s concentrate on maximizing shareholder worth, asserting that the board had doubled its share repurchase program from $1 billion to $2 billion. DraftKings’ Month-to-month Distinctive Payers (MUPs) rose to three.6 million, marking a 2% improve from the earlier yr, whereas Common Income per MUP (ARPMUP) climbed to $106.
DraftKings is now operational in 25 states, Washington, D.C., and Ontario, Canada, masking roughly half of the U.S. inhabitants. The corporate expects so as to add Missouri later this yr, pending regulatory approval.
Increasing By way of Partnerships
Along with its predictions market initiative, DraftKings introduced a brand new complete partnership with ESPN, making it the official sportsbook and odds supplier for the sports activities media big. Below the settlement, DraftKings’ betting merchandise will probably be built-in throughout ESPN’s platforms starting in December, with a full rollout anticipated by 2026.
“Our betting method has targeted on providing an built-in expertise inside our merchandise,” stated Jimmy Pitaro, Chairman of ESPN. “Working with DraftKings, a pacesetter within the area, will permit us to construct upon that basis, proceed to super-serve passionate sports activities followers and develop our ESPN direct-to-consumer enterprise. We’re enthusiastic about this new collaboration with DraftKings.”
By way of the ESPN integration, DraftKings will energy a devoted betting tab within the ESPN app and supply unique promotions tied to ESPN Limitless, the community’s direct-to-consumer subscription service.
