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Read Full BioPrizePicks has gained approval from the Commodity Futures Trading Commission (CFTC), which could see the company enter prediction markets. This follows news that lottery operator Allwyn has acquired a controlling stake in the fantasy sports platform.
The CFTC granted Performance Predictions II LLC, a subsidiary of the PrizePicks group, approval as a futures commission merchant (FCM) on Monday.
The Closing Line noted that the company will do business under the name PrizePicks Predict. As an FCM, the platform can partner with a prediction market operator, such as Kalshi or Crypto.com, to offer markets.
Robinhood has FCM status and partnered with Kalshi to offer its markets through the Robinhood app. Additionally, Underdog and Crypto.com have partnered to offer a combination of DFS and prediction markets through the Underdog platform.
As a DFS operator, PrizePicks may offer similar betting options as Underdog, which allows users to create parlays across DFS prop markets and Crypto.com’s moneylines.
There is no news as yet about a possible prediction market partner for PrizePicks.
Allwyn Takes Controlling Stake in PrizePicks
The move into prediction markets follows Allwyn’s announcement that it has taken a controlling stake in PrizePicks. The Czech-based company has primarily focused on running lotteries and began operating the UK’s National Lottery last year.
The company takes a 62.3% stake in PrizePicks for an “expected initial cash consideration of $1.6 billion.” The transaction initially values PrizePicks at $2.5 billion. That number could reach $4.15 billion if PrizePicks hits certain performance metrics over the next three years.
According to a press release, “PrizePicks will operate as a standalone brand within Allwyn, led by its CEO Mike Ybarra and the existing leadership team who will be retaining the majority of their existing ownership interest.”
Ybarra said, “Today marks the start of an exciting new chapter for PrizePicks and our growing community of players. There has never been a more electrifying time to shape the future of fan-first entertainment.
“By joining forces with Allwyn, a like-minded and disruptive company that shares our passion for bold product innovation, we will accelerate our mission to make our games more interactive, engaging, and rewarding for fans everywhere.”
PrizePicks Leads Allwyn’s Move Into US Market
The acquisition follows Allwyn’s acquisition of a controlling share of Novibet last year. The online sports betting and gaming company primarily operates in Europe and Latin America. The addition of PrizePicks expands the network’s presence in the US.
Karel Komarek, Allwyn Founder and Chair, said: “This acquisition will continue to drive Allwyn’s momentum and expand our business in the United States. PrizePicks has established its credentials as an industry pioneer, revolutionising the way fans engage with the athletes they love, making the contests more thrilling and immersive. We are excited to work with PrizePicks to shape the future of this new frontier in casual entertainment.”
Perhaps in preparation for the takeover, PrizePicks altered its DFS product last month, ending against-the-house games amid legal pressure.
Prediction markets have also faced their share of legal challenges, so it will be interesting to see the direction the company takes. Other companies will closely monitor the situation to determine the best way to maximize the potential of prediction markets and DFS, while staying within legal boundaries.
