DraftKings on Friday launched its proprietary prediction markets exchange, DKeX, integrating the platform into its DraftKings Sports & Casino app as the company accelerates its push into federally regulated sports event contracts.
The exchange replaces third-party infrastructure with DraftKings' own technology following its acquisition of Railbird Technologies, giving the company greater control over its prediction markets business as it competes with Kalshi, Polymarket U.S., FanDuel Predicts, Fanatics Markets, soon-to-be Novig and other entrants in the rapidly growing sector.
"DKeX provides a vertically integrated foundation for DraftKings Predictions," CEO and co-founder Jason Robins said in a statement. "It strengthens our prediction markets content and capabilities, gives us greater control over the technology that powers those offerings, and enables us to move faster."
Prediction market platforms have become one of the gambling industry's fastest-growing businesses, allowing customers to trade federally regulated event contracts through Commodity Futures Trading Commission-licensed exchanges rather than place traditional state-regulated sports wagers.
What does this mean for customers?
DKeX allows DraftKings to innovate more rapidly through greater ownership over content depth, operating economics, and the end-to-end customer experience, along with influence over liquidity. This overall strengthens the platform's content and capabilities. - Jeanine Hightower-Sellito, GM & EVP of Prediction Markets at DraftKings
World Cup Adds Fuel To Prediction Markets
The move came the same day that Kalshi announced a partnership with ADI - Predictstreet - the official prediction market of the World Cup. Kalshi deleted a social media post touting the deal, which left the impression that it was partnering with the World Cup itself - and not another FIFA partner. Heading into the knockout stage, Kalshi will be co-branded alongside ADI Predictstreet in stadium, TV, and online placements.
DraftKings said its Predictions platform has reached approximately $3.4 billion in annualized consumer trading volume and roughly $11.3 billion in annualized total trading volume for the week ending June 21. The company expects activity to continue growing through July, citing increased adoption of new contract types and heightened interest surrounding the FIFA World Cup.
The company also said more than 30% of customers have used its recently introduced "combos" feature, which bundles multiple event contracts into a single position.
"We've seen strong engagement on DraftKings Predictions throughout the World Cup with our integrated platform available in all 50 states in both English and Spanish, bringing World Cup betting and trading to a broad audience," Hightower-Sellito said.
DraftKings offers a "free-to-play" product in Nevada. It only offers sports-related trades on its prediction market in states where it does not currently operate a sportsbook. Those include California, Texas, Georgia and Florida.
The launch represents another milestone in DraftKings' strategy of integrating sportsbook betting and prediction markets into a single customer experience. Recent additions include MLB player contracts, No Runs First Inning (NRFI) markets, expanded NBA and NHL offerings and live in-game contracts.
Industry analysts believe the company intends to make prediction markets a major growth driver over the next several years.
DK 'Is Not Going To Lose In The Prediction Market Opportunity'
Following a recent meeting with management, Citizens analyst Jordan Bender wrote that DraftKings "is not going to lose in the prediction market opportunity," arguing the company has the financial resources and technology infrastructure to aggressively compete for market share.
Bender said DraftKings expects to spend heavily on customer acquisition over the next year, potentially adding between 2 million and 3 million prediction market customers. Citizens also noted the company has invested nearly $5 billion in trading technology through acquisitions including SBTech, Mustard Golf, Simplebet and Railbird.
The firm estimates DraftKings could generate more than $500 million in prediction market-related revenue next year through exchange operations, brokerage services and market-making activities, though it cautioned that significant customer acquisition spending could delay meaningful profit contributions until 2027 and beyond.
"Launching our own proprietary prediction markets exchange means DraftKings owns and operates the exchange itself, rather than solely relying on third parties," Hightower-Sellito told Rotowire.
The launch comes as competition in prediction markets continues to intensify. Kalshi remains the industry's largest sports event contract platform. Several traditional sportsbook operators are also evaluating ways to participate as litigation over federal and state oversight continues to work through the courts.
DKeX operates under the CFTC license DraftKings acquired through Railbird Technologies and will continue to offer prediction market products alongside its traditional sportsbook where permitted by state law.
