DraftKings CEO says prediction market exchange ranks third in US

NEW YORK · DraftKings' new prediction market exchange has quickly become the third-largest in the United States by trading volume, according to CEO Jason Robins. The DKeX platform launched in late June and by mid-October held a 3.57% market share with $1.04 billion in weekly trades, based on data from Aldrin Research. Robins announced the milestone during a session at the NEXTPredict Summit in New York City on Thursday. He said the company continues to gain market share in the competitive sector.

"We only launched the DraftKings exchange a few months ago, and we're already the clear No. 3, which is great, and we continue to gain share," Robins said. The exchange trails market leader Kalshi and second-place operator Polymarket. Robins credited the company's extensive experience operating one of the country's two largest online sportsbooks for the rapid growth. He said this background provides full control over prediction market economics and a deep understanding of customer preferences.

The company's prediction market platform, DraftKings Predictions, is available in 38 states but offers its complete range of event contracts in only 18 jurisdictions. These include major markets like California, Florida and Texas. In states where DraftKings holds a sports betting license, such as Colorado, New York and Pennsylvania, the company only offers financial event contracts and avoids sports-related ones. This self-imposed restriction is not followed by its competitors in the prediction market space.

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Robins acknowledged that offering sports contracts in a state like New York would make the platform more prominent. "The alternative was we would have had our licenses under threat, and I think that wouldn't have been a smart move," he said. The legality of sports event contracts, the most popular prediction market product, is under legal scrutiny and may eventually be decided by the US Supreme Court. Robins noted that some rival companies have heavily bet on a specific outcome from that process.

"We actually feel like we put ourselves in this win-win spot where no matter what the outcome of that whole process is, we are well positioned going forward," he said.

Robins said DraftKings was pleasantly surprised by strong growth in non-sports markets, including financial contracts, which would remain viable even if sports contracts are restricted. This growth is part of the reason for the company's significant investment in the prediction platform. He said the company plans to further develop these non-sports offerings in the coming months. DraftKings integrates its prediction markets with its sportsbook, casino and other products through a unified app and wallet as part of a "super app" strategy.

Shares of DraftKings have declined more than 40% this year despite the expansion into prediction markets. Robins suggested that investor uncertainty about the legal future of the federally regulated exchange business is a key factor, not fear of prediction markets cannibalizing the core sportsbook. "Private markets love uncertainty," Robins said. "Public markets are the opposite. They do not like uncertainty." He believes the stock will gain more credit as the company's positioning and the legal landscape become clearer.

During the summit, Robins also defended the company's use of artificial intelligence and its responsible gambling protocols following recent critical reports. He stated that the company does not target problem gamblers and instead refers them to a specialized team for intervention. "It's just completely not how we're built and how we philosophically and in-practice operate," Robins said. He added that the company sends responsible gaming notices and offers tools like cooling-off periods when potential issues are identified.