DraftKings Secures Federal Approvals for U.S. Prediction Markets Platform Launch

The company’s subsidiary, Gus III LLC, received approval on December 4 from both the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) to operate as an introducing broker (IB). The entity is now listed as an approved NFA member and an approved swap firm, giving DraftKings formal access to federally regulated, event-based derivatives markets.

“This registration marks an important step in the company’s federally regulated operations and supports the upcoming launch of DraftKings Predictions. We appreciate the NFA’s diligence in the process and remain committed to operating responsibly, transparently, and in full compliance with federal regulation.”

The approval allows DraftKings to expand beyond traditional sports betting by offering derivatives-style event contracts tied to future outcomes. Its IB and swap-firm designations also provide flexibility to route orders to exchanges beyond its own infrastructure as the company scales its new business line.

Entry Follows Railbird Acquisition

DraftKings’ entry into the sector follows its acquisition of Railbird Technologies Inc., a CFTC-licensed Designated Contract Market (DCM) that gives the operator direct access to regulated real-money event markets. Railbird is not currently active, and terms of the deal were not disclosed.

Interest in prediction markets has surged across both the financial and gaming industries. CME Group and Intercontinental Exchange are exploring how existing derivatives licenses could enable participation in gambling-adjacent markets. CME has partnered with FanDuel to develop event-based contracts tied to economic indicators, signaling deeper involvement from Wall Street firms.

Competitive Landscape Intensifies

A growing list of operators, including PrizePicks, Underdog, Novig, Polymarket, Kalshi, Truth Predict, and Fanatics, are competing for market share. Fanatics launched its prediction markets app this month after acquiring IB-licensed Paragon Global Markets. Kalshi reported roughly $4.4 billion in October trading volume, its strongest month to date, while Polymarket rebounded from a recent decline in user activity.

DraftKings has not announced a launch date for DraftKings Predictions, though regulatory momentum suggests a debut is approaching. The product will allow users to trade yes-or-no contracts tied to finance, culture, and entertainment. The company has not determined whether it will offer sports-related event markets, a move that may face resistance from state gaming regulators who bar operators from running both state-regulated sportsbooks and federally regulated exchanges.

CEO Weighs in on Market Opportunity

“We’re excited about the additional opportunity that prediction markets could represent for our business and are actively exploring the sector as rules evolve.”

CEO Jason Robins previously shared this perspective but downplayed competitive threats in October, saying he "just doesn’t see a world" where consumers choose platforms like Polymarket or Kalshi over established sportsbooks in states with legal wagering.

The approval caps a lengthy regulatory process for DraftKings. The company first filed with the NFA in 2024 under a different corporate entity before withdrawing. It re-filed in June 2025 under Gus III Holdings LLC, naming Robins, CFO Alan Ellingson, and co-founder Paul Liberman to its submission. DraftKings also withdrew a separate federal application in April, calling prediction markets an "emerging product that warrants thoughtful consideration."

As it positions for launch, DraftKings has exited the American Gaming Association and rolled out Spanish-language features aimed partly at users in non-sports betting states such as California and Texas.

Source: DraftKings