DraftKings acquires predictions platform Railbird

Kings Project Railbird is acquiring the predictions platform as it prepares to launch a mobile platform in the coming months called DraftKings Predictions.

Railbird is licensed by the Commodity Futures Trading Commission to offer event contract exchanges. DraftKings targeted the company because of its proprietary team and technology.

“We are excited about the additional opportunity that prediction markets can represent for our business,” Jason Robbins, CEO of DraftKings, said in a statement to CNBC. “We believe the Railbird team and platform – combined with DraftKings’ scale, trusted brand and proven expertise in mobile-first products – enables us to win in this additional space.”

Prediction markets allow customers to trade on the outcomes of various events in the worlds of finance, culture and entertainment, which will allow DraftKings to expand beyond the sports betting business. The markets for election results and sports are the most controversial.

Dozens of states, gaming regulators and tribes are suing or taking other action to try to prevent companies from offering deals based on sporting events, because they view them as unlicensed gambling.

Nevada is among the states warning that companies risk losing their gambling licenses if they feature sports in their prediction markets.

If DraftKings does offer contracts for sporting events, it will likely focus only on states that do not offer licensed sports betting, such as California and Texas, to avoid conflicts with states where it does offer sports betting. Additionally, technology exists to prevent this sporting trade from existing on tribal lands.

DraftKings may also offer more advanced “know your customer” guardrails, a term commonly used to refer to identity verification, given its experience in the regulated gambling market.