DraftKings Challenges Kalshi and Polymarket With Prediction Markets

DraftKings is launching its Predictions app in 38 states and targeting markets where sports betting is banned. Kalshi and Polymarket are also facing growing legal pressure and CFTC oversight.

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Key Takeaways

• DraftKings is launching prediction markets to compete with Kalshi and crypto-based Polymarket and gain access to California, Texas, and Florida.
• CEO Jason Robins says only about 3% of DraftKings customers in allowed states deposit money on Kalshi.
• Kalshi and Polymarket are facing new legal and operational pressure as the sector comes under tighter oversight.

DraftKings is making a direct move against Kalshi and crypto-based Polymarket with its prediction markets. CEO Jason Robins says the new service gives the company a path into California, Texas, and Florida, three states where the sportsbook app is not allowed to operate. That shifts the battle not just to new customers, but also to a market that is coming under more and more oversight.

A New Route for DraftKings

Robins said that only about 3% of DraftKings customers in states where sports betting is allowed also deposit money on Kalshi. He sees that as an upper limit, which he says means the real competition is mostly about new users. DraftKings is trying to reach that group through its Predictions app, which has launched in 38 states under the oversight of the Commodity Futures Trading Commission.

Prediction markets are markets where users buy and sell contracts tied to the outcome of an event. DraftKings wants to use its own marketing data and pricing models to benefit there. Robins called Kalshi’s lead small and said the market actually creates opportunities for new players.

Pressure on Kalshi and Polymarket

The timing stands out, because Kalshi raised $1 billion on Thursday at a $40 billion (€35.9 billion) valuation, after a $22 billion (€19.8 billion) valuation in May. At the same time, the legal environment remains shaky. In August, the Ninth Circuit Court of Appeals ruled that Kalshi’s sports contracts fall under Nevada gambling law instead of federal commodity protection. Robins said that did not change much for DraftKings, since the company was never active there.

Utah also put pressure on the sector by filing criminal charges against Kalshi and its two founders on Wednesday. The CFTC filed a lawsuit against Utah the same day. Polymarket had its own problem on top of that: the company temporarily froze trading on its international, crypto-based platform after users reported drained wallets through a third party. Polymarket is meanwhile expanding under CFTC oversight, even as the company also faces new compliance questions.

Why This Matters

For European crypto readers, this is especially relevant because Polymarket is one of the best-known crypto-based prediction platforms. The mix of new competition, lawsuits, and oversight shows how quickly this market is maturing, but also how different the rules can be from one country or state to another. It makes clear that prediction markets are no longer a niche, but a space where traditional betting companies, crypto platforms, and regulators are facing off directly.