DraftKings prediction markets give the sportsbook a route into California, Texas, and Florida, three states closed to its betting app, CEO Jason Robins said, setting up direct competition with Kalshi and crypto-based Polymarket.

Robins said only about 3% of DraftKings customers in sports betting states also deposit on Kalshi, a figure he treats as a ceiling. The overlap suggests the contest is for new users, where Polymarket and Kalshi face a rival with national reach.

Can DraftKings Prediction Markets Out-Distribute Polymarket?

Prediction markets are venues where users buy and sell contracts tied to event outcomes. DraftKings entered through its Predictions app, which launched in 38 states under oversight from the Commodity Futures Trading Commission (CFTC).

Robins said Kalshi’s head start is under a year and argued that DraftKings’ marketing data and pricing models give it an edge.

Kalshi raised $1 billion at a $40 billion valuation on Thursday, up from $22 billion in May.

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

Jason Robins, CNBC

LeBron James’ DraftKings endorsement ended this summer, and he has since announced a Polymarket partnership deal.

Does Regulatory Risk Cap the Upside?

In August, the Ninth Circuit Court of Appeals ruled that Kalshi’s sports contracts fall under Nevada gambling law rather than federal commodities protection. Robins said DraftKings never operated there, so the decision changed nothing for the company.

Utah then filed criminal charges against Kalshi and its two co-founders on Wednesday. The CFTC announced a lawsuit against Utah the same day.

Polymarket temporarily froze trading on its international exchange, the crypto-based arm, after users reported drained wallets tied to a third-party provider. The company said it would reimburse affected customers.

The Ninth Circuit’s ruling conflicts with a Third Circuit decision favoring Kalshi, which makes Supreme Court review plausible. The outcome could decide whether regulated incumbents or crypto-based venues set the terms for a category that sportsbooks have now entered.

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