Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for CasinoBeats. He joined CasinoBeats in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market...
Read Full BioDraftKings Inc. has acquired Railbird Technologies and its CFTC-designated exchange arm, marking a significant step into regulated prediction markets.
The move, which has been speculated about for months, highlights the inevitable convergence between sports wagering and fintech platforms. However, that could be under threat as the legal environment becomes more complex, with a spotlight on one defining battleground: Massachusetts.
Strategic Move, with Sports Omitted—For Now
In the announcement, Jason Robins, CEO and Co-Founder of DraftKings, said:
“We are excited about the additional opportunity that prediction markets could represent for our business. Railbird’s team and platform — combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products — positions us to win in this incremental space.”
The press release confirmed plans to launch an app called “DraftKings Predictions,” which will cover outcomes across “finance, culture, and entertainment” and allow connectivity to multiple exchanges. Notably, DraftKings did not mention sports event contracts in the release.
The omission mirrors the approach taken by rival FanDuel, which in August announced a partnership with CME Group to develop prediction market offerings. Similarly, in the announcement, FanDuel did not mention sports markets.
At the same time, recent reports suggest that CME is looking to offer sports event contracts by the end of this year. Naturally, speculation has begun that FanDuel is a natural partner to provide them to retail customers.
What This Means for DraftKings
By acquiring Railbird, DraftKings receives faster access to a CFTC-registered exchange. DraftKings can build a prediction-market platform offering non-sports contracts and expand its footprint, especially in states where its sportsbook is not available.
Also, if DraftKings chooses to distribute the new “DraftKings Predictions” via its existing mobile app, it could increase its exposure.
In terms of a strategy, DraftKings could already have an exchange ready if CME and FanDuel launch sports event contracts. Still, the omission of sports in the announcement suggests caution. DraftKings might play the waiting game while it watches how the legal framework evolves.
Lawsuits in Massachusetts, Nevada, New Jersey, Maryland, and those involving tribes show that prediction markets cannot assume a smooth ride.
Sports event contracts may attract more regulatory scrutiny due to concerns over youth access, addiction risk, and the legacy of state-licensed sports wagering regimes.
For DraftKings, entering sports markets prematurely—or in states with ambiguous law—could trigger licensing, tax, consumer-protection, or gaming-regulation issues. Several state gaming regulators, such as the Nevada Gaming Control Board, have already announced potential enforcement actions against licensed operators getting involved with prediction markets.
Legal Red Flag: Massachusetts
While players gear up for launch, regulatory risk is intensifying with a growing number of lawsuits against platforms like Kalshi and Robinhood. One particular case, in Massachusetts, could play a pivotal role in shaping the future of prediction markets.
In September, the state’s Attorney General, Andrea Joy Campbell, filed suit against KalshiEX LLC (Kalshi). Campbell alleges that Kalshi’s “event contracts” for sports constitute unlicensed sports wagering. The complaint states:
“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences.”
Key points of the Massachusetts complaint:
- Kalshi is accused of offering money-line, point-spread, and over/under contracts on sports without a license from the Massachusetts Gaming Commission (MGC).
- It allegedly allows users over 18 to participate. Massachusetts law requires users to be 21 and above for online sports wagers.
- It allegedly lacks required responsible-gambling protections (self-limiting options).
- The complaint claims that more than 75% of Kalshi’s trading volume was tied to sports during one key period.
- The state asks the court to order Kalshi to cease offering sports event contracts in Massachusetts while the case proceeds.
A Kalshi spokesperson told Casino Beats: “Kalshi offers its users a fair, transparent, federally-regulated, and nationwide marketplace. Rather than engage in dialogue with Kalshi…Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas.”
Meanwhile, Robinhood Markets, Inc., which offers Kalshi’s event-contract markets, has filed its own suit against Massachusetts.
In a recent development, a group of tribes has requested permission to file an amicus brief in the ongoing litigation. They want to introduce the argument that the contracts violate the Indian Gaming Regulatory Act (IGRA) and threaten tribal sovereignty, similar to a separate lawsuit in California.
What to Watch For
- Will DraftKings delay or exclude sports-contract markets until the regulatory path clarifies?
- How fast will CME/FanDuel move into sports event contracts—and in which states?
- Will state-level regulators replicate Massachusetts’ strategy, setting a precedent for the enforcement of prediction markets?
- Will the federal regulator (the Commodity Futures Trading Commission) provide more explicit guidance on sports-linked event contracts?
- Will DraftKings’ prediction front-end become a new engagement channel even if sports markets remain constrained?
