Report Shows DraftKings Pursuing Purchase of Railbird Exchange

DraftKings may be about to shake up the sports betting industry.

According to a report from Front Office Sports, the industry-leading sportsbook has initiated talks to purchase Railbird Exchange. The sports betting prediction market operator was recently licensed by the Commodity Futures Trading Commission (CFTC), clearing the way for its launch. No details around the pricing or negotiations have been confirmed.

In April, DraftKings dropped its CFTC application to launch its own prediction market platform. The company confirmed that it remained interested in joining the emerging industry but had shifted its focus to purchasing an already licensed operator.

The sale would allow the sports betting giant to bypass the licensing process and potentially launch 1-2 years earlier. Given that top rival FanDuel Sportsbook is also rumored to be seeking an entry into the industry, DraftKings would gain a massive edge if it could secure a deal first.

DraftKings has not confirmed or denied the report involving Railbird Exchange. However, it has confirmed that they are actively pursuing several options to enter the sports prediction market industry.

Is Sports Betting in Trouble?

While legal battles between states and prediction market operators, such as Kalshi, continue to rage, it appears the new industry may be here to stay. The current nominee to lead the CFTC is a strong supporter of prediction markets and appears likely to protect them if approved for the role.

FanDuel and DraftKings are betting that the industry will survive its legal challenges, and are on pace to be the first sportsbooks to enter it. Given that they collectively own around 90% of the US sports betting market share, tribes, states, and other operators fear that their massive user bases will make the switch. That means less revenue for sportsbooks and states with legal markets.

Launching prediction market platforms would also allow DraftKings and FanDuel further to expand their footprint in states like Texas and California. Sports betting remains illegal in both of those massive markets, and sports prediction platforms are allowed. The user base that the two operators could build would give them a massive advantage if and when those states legalize sports betting.