The online sports betting company officially launched its new prediction market Friday.
DraftKings (NASDAQ:DKNG) stock was trending higher on Friday, buoyed by the launch of its new prediction market, DraftKings Predictions.
The standalone app, DraftKings Predictions, became available on December 19, but has been anticipated for a couple of months. In October, DraftKings announced that it acquired the Railbird Exchange with the goal of launching DraftKings Predictions in the coming months.
DraftKings stock ticked up about 1% on Friday to around $34.50, but it has gained roughly 19% over the past month as investors anticipated the December launch.
In November, both DraftKings and its rival FanDuel left the American Gaming Association and bowed out the Las Vegas online betting market in anticipation of entering the prediction market. Neither the AGA or the Nevada Gaming Control Board allow prediction markets as they view event contracts as unauthorized gambling.
DraftKings Predictions will allow customers to trade on outcomes in sports and finance initially, expanding into other categories like entertainment and culture over time.
“DraftKings Predictions is a significant milestone and reflects our ongoing commitment to delivering products that tap into the passion of our customers,” Corey Gottlieb, chief product officer at DraftKings, said. “We will create an unparalleled customer experience, leveraging key strategic relationships like ESPN and NBCUniversal to provide an authentic, real-time product that moves at the speed of sports. Along with our operational footprint, marketing and analytics infrastructure and advanced in-house technology, we believe we are uniquely positioned to lead this space over the long term.”
Lots of competition
DraftKings and FanDuel are the two largest online sports betting apps, by a fairly wide gap. But prediction markets are highly competitive with Kalshi and Polymarket the leaders – both of which began offering sports events contracts in the U.S. in 2025.
In addition, Robinhood (NASDAQ:HOOD) and Coinbase (NASDAQ:COIN) just entered the fray this month, so the room is even more crowded.
DraftKings does have the advantage of its massive sports betting base in roughly 33 states, along with its association with ESPN following the demise of ESPN Bets.
DraftKings officials see this as an opportunity to expand its reach into the states that do not allow sports betting, including the three largest by population – California, Texas, and Florida.
While DraftKings Predictions will be available in 38 states, those who live in states that already have legalized online sports betting won’t be able to trade on sports event contracts – only financial on financial markets. But those states that don’t allow sports betting will be able to trade sports event contracts.
In addition, DraftKings Predictions plans to connect to multiple exchanges, starting with the derivatives exchange CME Group at launch for financial and economic predictions.
DraftKings stock is down about 7% year-to-date, but analysts are mostly bullish on the stock, rating it a consensus buy. DraftKings stock has a median price target of $45 per share, which suggests about 30% upside. It has a reasonable forward P/E of 19.
