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draft kings has acquired prediction platform Railbird and is preparing to launch a mobile platform called DraftKings Predictions in the coming months.
Railbird is licensed by the Commodity Futures Trading Commission to provide event contract exchange. DraftKings targeted the company because of its team and unique technology.
DraftKings CEO Jason Robbins said in a statement to CNBC: “We are excited about the new opportunities that prediction markets represent for our business.” “We believe that Railbird’s team and platform, combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products, will help us win in this progressive space.”
Prediction markets allow DraftKings to expand beyond its sports betting business by allowing customers to trade the outcomes of various events in the world of finance, culture, and entertainment. Markets regarding election results and sports are the most controversial.
Dozens of states, gaming regulators and tribes have filed lawsuits or taken other actions because they consider it unauthorized gambling for companies to offer transactions based on sporting events.
Nevada is among the states warning companies that they risk losing their gambling licenses if they offer sports on prediction markets.
If DraftKings were to offer a sporting event deal, it would likely only focus on states that do not offer licensed sports betting, such as California and Texas, to avoid conflicts with states that offer sports betting. Additionally, technology exists that prevents these sports transactions from being available on tribal lands.
DraftKings may also offer more sophisticated “customer awareness” guardrails (a term commonly used to refer to identity verification) given its experience in regulated gambling markets.
