DraftKings Launches CFTC Regulated Predictions App in 38 States

DraftKings Inc. launched DraftKings Predictions on December 19, offering U.S. retail customers federally regulated event contracts through a CFTC supervised brokerage structure. The product is operated by the company’s wholly owned subsidiary GUS III Inc., doing business as DraftKings Predictions, which is registered with the Commodity Futures Trading Commission as an Introducing Broker and is a member of the National Futures Association.

The standalone mobile app and companion web product will initially connect customers to the CME Group for order routing, with the company planning to add additional exchange connectivity over time to broaden market eligibility and liquidity. Eligible customers will be able to buy and sell event contracts that pay out based on real world outcomes, with initial markets focused on sports and finance. DraftKings said it will expand into additional categories later, including entertainment and other non sports markets.

The product is available in 38 states at launch. DraftKings specifically noted that sports event contracts will be offered in large states such as California, Florida, Georgia and Texas. Where the company’s sportsbook does not operate, the platform will offer both sports and finance markets, while in states where DraftKings operates a sportsbook the initial offering may be limited to finance markets only. The company corrected an earlier internal plan and confirmed the 38 state footprint rather than 39.

DraftKings framed the offering as a CFTC regulated derivatives business rather than gambling, and it said the product will avoid gambling oriented terminology. The company’s move places it in competition with established crypto native prediction platforms and newer entrants from brokerage and fintech firms that have introduced event contracts. DraftKings highlighted that its product operates within the existing financial and regulatory system, using CFTC registration, NFA membership and exchange connectivity rather than relying on blockchain or stablecoin rails.

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Operationally the platform will route orders through a brokerage model that begins with CME Group connectivity. Inter brokerage order fills across customers using different brokers require limit order functionality to enable trade matching and to preserve orderly execution, a technical and liquidity challenge the company will need to manage as it links to more venues.

The launch represents a material extension of DraftKings’ product set beyond sportsbook and daily fantasy offerings. DraftKings is publicly traded on Nasdaq under the ticker symbol DKNG and maintains official partnerships with multiple major leagues and sports organizations. For context, DraftKings’ daily fantasy product is available in 44 states, the District of Columbia and certain Canadian provinces, a footprint that differs from the 38 states served by DraftKings Predictions.

Regulators and public interest groups will now watch how the product operates in practice, and whether retail traders treat these contracts like traditional derivatives or more like betting products. There is an ongoing legal and public debate about whether CFTC regulated prediction markets are materially distinct from gambling, with critics pointing to typical retail outcomes on betting exchanges and the role brokers and exchanges play in taking a cut of trading. DraftKings said it intends to expand market categories and add exchange partners, but provided no specific timeline for those developments.