DraftKings CEO Predicts Upside as Kalshi and Polymarket Gain New Competition

CEO Jason Robins said the sportsbook’s prediction markets open a path to California, Texas and Florida, all of which block its betting app, and leave it facing Kalshi and the crypto-based Polymarket.

Only about 3% of DraftKings users in sports betting states also make deposits at Kalshi, according to Robins, and he views that figure as a ceiling. The overlap points to a battle for new users, with Polymarket and Kalshi now up against a competitor that has national reach.

Can DraftKings Prediction Markets Outmatch Polymarket on Distribution?

In prediction markets, participants trade contracts whose value depends on the outcome of an event. DraftKings moved into the arena through its Predictions app, which became available in 38 states under the supervision of the Commodity Futures Trading Commission (CFTC).

Kalshi has a lead of less than a year, Robins said, and he contends that DraftKings’ marketing data and pricing models give the company an edge.

On Thursday, Kalshi took in $1 billion at a valuation of $40 billion, up from $22 billion in May.

“I think that anytime there’s disruption, it creates opportunity.”

Jason Robins — CNBC

LeBron James’ time as a DraftKings endorser came to a close this summer, and he has since revealed a partnership arrangement with Polymarket.

Can Regulatory Risk Hold the Opportunity Down?

A Ninth Circuit Court of Appeals ruling in August put Kalshi’s sports contracts under Nevada gambling law as opposed to federal commodities protection. Robins said DraftKings never did business there, meaning the outcome did not affect the company.

Then, on Wednesday, the state of Utah lodged criminal charges against Kalshi and its two co-founders. The same day, the CFTC announced a lawsuit against Utah.

Polymarket halted trading for a time on its international exchange, which is the crypto-based arm, after customers flagged wallets emptied in connection with a third-party provider. The platform promised to reimburse those affected.

Because the Ninth Circuit’s ruling clashes with a Third Circuit decision that came out for Kalshi, the case could reach the Supreme Court. Whatever the result, it may determine whether established regulated firms or crypto-based venues control the shape of a market that now includes sportsbooks.