DraftKings secures federal approvals ahead of predictions product launch

• DraftKings subsidiary Gus III LLC gains National Futures Association and CFTC approval as introducing broker.
• Approvals clear path for DraftKings Predictions platform offering yes-or-no contracts on finance, culture and entertainment.
• Launch timeline remains unconfirmed as operator enters rapidly expanding prediction markets sector.

DraftKings has received key federal approvals bringing the sports betting operator closer to launching its DraftKings Predictions platform in the United States.

The company’s subsidiary, Gus III LLC, was approved on 4 December by both the National Futures Association and the Commodity Futures Trading Commission to operate as an introducing broker and approved swap firm.

The approvals position DraftKings to expand into federally regulated event-based markets, an area attracting growing interest from both sportsbook operators and financial exchanges. The operator has not announced a launch date for the platform beyond stating it will arrive “in the coming months.”

A DraftKings spokesperson told SBC Americas the registration marks an important step in the company’s federally regulated operations. “We appreciate the NFA’s diligence in the process and remain committed to operating responsibly, transparently, and in full compliance with federal regulation,” the spokesperson added.

Regulatory pathway enables derivatives-style products

The green light from the NFA and CFTC gives DraftKings a legitimate pathway into regulated derivatives-style products tied to future events, allowing the operator to broaden its offering beyond traditional sports betting. An introducing broker offers customers access to contracts made by a designated contract market without technically handling customer funds.

DraftKings Predictions will allow users to trade yes-or-no contracts tied to finance, culture and entertainment. Chief Executive Officer Jason Robins previously said the company is “excited about the additional opportunity that prediction markets could represent for our business.”

The operator has not yet decided whether it will offer sports-related contracts, a move that could face pushback from state gaming regulators who insist that companies under their purview cannot simultaneously operate federally regulated event markets. Robins said in October he “just doesn’t see a world” where consumers choose platforms like Polymarket or Kalshi over established sportsbooks in states with legal wagering.

Second application succeeds after earlier withdrawal

DraftKings originally filed with the NFA as Gus II Holdings LLC in June 2024 seeking approval to do business as DraftKings Predict. The company withdrew that application in March 2025 before re-filing on 24 June under Gus III Holdings LLC.

The application took almost six months for approval. The NFA website notes that applications may take six weeks or longer to process. Registration involves extensive background checks and strict ethical standards for principals and key stakeholders.

The filing includes Robins, Chief Financial Officer Alan Ellingson and co-founder Paul Liberman among the listed principals. DraftKings’ approval as an introducing broker and swap firm would allow it to offer event contracts via exchanges other than Railbird, something the company suggested it would pursue in its prediction market launch announcement.

Railbird acquisition provides in-house exchange

DraftKings acquired CFTC-licensed Railbird Technologies in October, giving the operator an in-house designated contract market. Railbird was approved as a DCM shortly before the acquisition but is not currently active in the market.

The acquisition came as heavyweight financial exchanges explore how existing derivatives licences could allow entry into gambling-adjacent markets. Chicago Mercantile Exchange Group and Intercontinental Exchange are both evaluating participation in the sector.

Whilst NFA membership is not required for designated contract markets, it is mandatory for futures commission merchants, which handle customer accounts and compliance. DraftKings’ introducing broker status effectively allows the registered entity to act as the front end for a DCM.

Entering crowded and rapidly expanding market

DraftKings is entering a sector experiencing rapid acceleration. Rival operator FanDuel is partnering with CME Group on a new event-contracts joint venture expected to launch early in 2026. Over the past two years, the prediction markets space has exploded with entrants, including PrizePicks, Underdog, Novig, and Truth Predict backed by President Donald Trump.

On 3 December, Fanatics launched its own platform across 10 states, including Delaware, South Dakota and Utah. Fanatics gained introducing broker status by acquiring Paragon Global Markets rather than waiting for NFA approval.

PrizePicks gained NFA approval as a futures commission merchant in September and was the first operator in the sportsbook and daily fantasy sports space to launch prediction markets in October. Underdog offers sports event contracts as a technology partner of DCM and FCM Crypto.com.

Prediction market platform Kalshi closed October with its strongest performance to date, logging around $4.4bn in trading volume according to multiple industry reports. The figure represents not only a record month for the company but also a clear signal of how far regulated prediction markets have come in attracting mainstream participation.

Strategic positioning reflects market opportunity

As DraftKings positions for launch, the operator has exited the American Gaming Association alongside rival FanDuel in November. The departures came after AGA chief executive Bill Miller criticised prediction markets as “free riders” that bypass consumer protections embedded in state gaming laws.

DraftKings also withdrew its application for Nevada sports betting licences in November after state regulators warned that prediction market bets are incompatible with maintaining Nevada gaming licences. The moves reflect strategic planning for a product designed to reach markets where the company cannot currently operate traditional sportsbooks.

The operator has rolled out Spanish-language functionality aimed partly at users in non-sports betting states such as California and Texas. These positioning moves come as co-founder Matt Kalish prepares to step down from his executive role in March 2026, though he will remain on the board.

During the second quarter earnings call, Robins told investors that DraftKings is “actively exploring” prediction markets as regulations evolve. The CEO has described the upcoming launch as representing a potentially major opportunity for the business.

The approval caps a lengthy regulatory process that saw DraftKings initially pursue, then withdraw from, prediction markets before re-committing to the sector. The company previously pulled a separate federal application in April 2025, calling prediction markets an “emerging product that warrants thoughtful consideration.”

DraftKings plans to offer sports event contracts only in states where its sportsbook is not available, addressing concerns from state gaming regulators. Some states have warned licensees that offering sports event contracts in another state could be grounds to revoke a licence. Robins has said the company’s conversations with regulators have led it to believe its prediction market strategy will not put its sportsbook operating licences at risk.

DraftKings has downplayed competitive threats from pure-play prediction market platforms, with Robins maintaining that the company’s established customer acquisition capabilities, product development expertise and compliance infrastructure provide advantages over competitors. Recent partnerships with major media outlets ESPN and NBCUniversal are expected to further enhance DraftKings’ visibility and engagement across the sports landscape.

The timeline for DraftKings actually launching its predictions platform remains unconfirmed beyond the company’s statement that sports contracts would arrive in the coming months. A company spokesperson declined to offer an updated timeline following the regulatory approvals.

Interest in prediction markets has surged across both the financial and gaming industries as operators seek new revenue streams and financial institutions explore how derivatives licences could enable participation in gambling-adjacent markets. The convergence represents a significant shift in how event-based wagering is structured and regulated in the United States.