DraftKings is making ready to make a significant enlargement past its conventional sportsbook operations with the introduction of a brand new platform referred to as DraftKings Predictions, which can enable customers to commerce on the outcomes of sports activities occasions. The firm confirmed that the product will debut “in the coming months,” signaling an bold transfer into the rising prediction markets sector—one that might take a look at the bounds of current 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 path. “This is the most bullish I have ever felt about our future,” Robins stated. “Underlying growth in the business is accelerating and we are excited to launch DraftKings Predictions in the coming months, which we view as a significant incremental opportunity.”
The transfer follows DraftKings’ October acquisition of Railbird Technologies Inc., a federally licensed alternate acknowledged by the Commodity Futures Trading Commission (CFTC). This buy provides DraftKings a regulatory basis for working within the predictions area, permitting it to provide contracts based mostly on future sporting occasions.
Unlike its traditional sportsbook—which operates underneath 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 said it intends to prioritize “the roughly two-dozen states” with out lively DraftKings Sportsbook operations, together with main markets similar to California, Texas, and Florida, which collectively account for a few quarter of the U.S. inhabitants.
Regulatory Resistance and Legal Challenges
While DraftKings’ new enterprise may open huge new markets, it additionally raises vital regulatory questions. Multiple state gaming authorities have cautioned licensed operators towards collaborating in prediction markets, suggesting such actions may violate state playing statutes.
In Michigan, for example, the Michigan Gaming Control Board (MGCB) warned operators that facilitating prediction markets may have an effect on future licensing selections. “The Michigan Gaming Control Board understands that certain licensees may be considering opportunities to operate, offer, or facilitate access to prediction markets,” wrote Henry Williams, the MGCB’s Executive Director. He emphasised that many of those choices “would not operate in accordance with state gaming laws or pursuant to state-issued gaming licenses.”
Similarly, the Ohio Casino Control Commission issued letters discouraging involvement in sports activities occasion contracts, prompting prediction market operator Kalshi to sue each the fee and the state’s legal professional common. Regulators in Arizona and Nevada have launched comparable advisories.
Legal consultants consider these disputes may ultimately attain the U.S. Supreme Court, as prediction market operators—together with Kalshi and Polymarket—argue that their merchandise operate as federally authorized commodities exchanges moderately than state-regulated playing actions.
Business Growth and Strategic Focus
Despite the potential authorized headwinds, DraftKings stays assured in its development trajectory. The firm reported $1.144 billion in income for the third quarter of 2025—a 4% enhance 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, saying that the board had doubled its share repurchase program from $1 billion to $2 billion. DraftKings’ Monthly Unique Payers (MUPs) rose to 3.6 million, marking a 2% enhance from the earlier yr, whereas Average Revenue per MUP (ARPMUP) climbed to $106.
DraftKings is now operational in 25 states, Washington, D.C., and Ontario, Canada, overlaying roughly half of the U.S. inhabitants. The firm expects to add Missouri later this yr, pending regulatory approval.
Expanding Through Partnerships
In addition to 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. Under the settlement, DraftKings’ betting merchandise shall be built-in throughout ESPN’s platforms starting in December, with a full rollout anticipated by 2026.
“Our betting approach has focused on offering an integrated experience within our products,” stated Jimmy Pitaro, Chairman of ESPN. “Working with DraftKings, a leader in the space, will allow us to build upon that foundation, continue to super-serve passionate sports fans and grow our ESPN direct-to-consumer business. We are excited about this new collaboration with DraftKings.”
Through the ESPN integration, DraftKings will energy a devoted betting tab within the ESPN app and provide unique promotions tied to ESPN Unlimited, the community’s direct-to-consumer subscription service.
