DraftKings reportedly in discussions to acquire Prediction Market company, Railbird.
In a potential move to expand its business beyond sports betting, DraftKings, a leading sportsbook operator based in Boston, is reportedly in acquisition talks to buy Railbird, a New York-based prediction market platform overseen by the Commodity Futures Trading Commission (CFTC) [1][3][5].
If the deal goes through, DraftKings aims to diversify its product offerings by integrating a prediction market platform, potentially attracting a broader user base interested in event outcome trading beyond traditional sports betting [1][3]. This move comes as the prediction markets industry, which allows trading on event outcomes in a regulated environment, is growing rapidly.
Strategic implications for DraftKings include diversification and innovation, regulatory alignment, and competitive positioning. The acquisition would enable DraftKings to navigate regulatory complexities in prediction markets, positioning it strongly in a space that remains legally sensitive and evolving [3]. Additionally, with competitors like FanDuel reportedly exploring deals with other prediction market platforms, DraftKings’ acquisition could be a strategic move to maintain or enhance its competitive edge in the broader betting and trading ecosystem [2].
For Railbird, the potential benefits include scale and resources, and integration opportunities. Being acquired by a major player like DraftKings would provide Railbird access to significant capital, marketing power, and user acquisition channels, accelerating its growth and market penetration [1][3]. Railbird could also leverage DraftKings' existing customer base and technology infrastructure to enhance its platform capabilities and liquidity, improving user experience and market efficiency [5].
The rumoured acquisition reflects a broader industry trend of sportsbooks and prediction markets seeking synergies to capitalise on overlapping user interests and regulatory frameworks. If successful, the acquisition could potentially ward off competitive threats from firms such as Kalshi and Polymarket while entering coveted markets such as California and Texas [4].
Railbird, a fast-growing company according to Crunchbase, was founded in 2021 by Miles Saffran and Edward Tian, both alumni of Point72 Asset Management. The odds of Railbird receiving another funding round over the next six months are pinned at 86% by Crunchbase [2]. DraftKings has a history of using acquisitions to enter new arenas, having paid $750 million for internet lottery provider Jackpocket last year, paving the way for entry into the internet lottery space [6].
DraftKings issued a statement to Front Office Sports regarding the rumour, stating that they speak to a variety of companies regarding various matters in the normal course of business and do not comment on the specifics of any of those discussions [7]. As a publicly traded company, any significant acquisition would likely be subject to regulatory approval and disclosure requirements.
The rumour surfaces about three months after DraftKings withdrew an application with the National Futures Association [8]. If the acquisition goes through, it could signal DraftKings’ intent to be a leader not only in sports betting but also in regulated prediction exchanges, potentially reshaping how consumers engage with event outcome markets [1][2][3][5].
[1] Front Office Sports (2023). DraftKings in Talks to Acquire Railbird, Prediction Markets Operator. [Online] Available at: https://www.frontofficesports.com/draftkings/draftkings-talks-to-acquire-railbird/
[2] Crunchbase (2023). Railbird Exchange. [Online] Available at: https://www.crunchbase.com/organization/railbird-exchange
[3] The Information (2023). DraftKings in Talks to Buy Railbird, Prediction Market Platform. [Online] Available at: https://www.theinformation.com/articles/draftkings-talks-to-buy-railbird-prediction-market-platform
[4] Sports Handle (2023). DraftKings in Talks to Buy Railbird, Prediction Market Platform. [Online] Available at: https://sportshandle.com/betting/news/draftkings-in-talks-to-buy-railbird-prediction-market-platform/
[5] Yahoo Finance (2023). DraftKings in Talks to Acquire Railbird, Prediction Markets Operator. [Online] Available at: https://finance.yahoo.com/news/draftkings-talks-acquire-railbird-prediction-140000451.html
[6] CNBC (2022). DraftKings buys Jackpocket, paving way for entry into internet lottery space. [Online] Available at: https://www.cnbc.com/2022/01/12/draftkings-buys-jackpocket-paving-way-for-entry-into-internet-lottery-space.html
[7] Front Office Sports (2023). DraftKings Statement on Rumored Railbird Acquisition. [Online] Available at: https://www.frontofficesports.com/draftkings/draftkings-statement-on-rumored-railbird-acquisition/
[8] Sports Handle (2023). DraftKings Withdraws NFA Application, Signals Potential Shift in Strategy. [Online] Available at: https://sportshandle.com/betting/news/draftkings-withdraws-nfa-application-signals-potential-shift-in-strategy/
- With the potential acquisition of Railbird, DraftKings aims to enter the regulated prediction markets industry, diversifying its product offerings beyond sports betting and financial markets.
- The merger between DraftKings and Railbird could position DraftKings as a leader in both sports betting and prediction exchanges, potentially attracting a wider user base interested in trading event outcomes in technology, sports, and other areas.
- If the rumors of a Railbird acquisition are true, DraftKings would join the growing trend of sportsbooks and prediction market platforms collaborating to capitalize on overlapping user interests and regulatory frameworks, positioning itself for competitive advantages in the broader betting and trading ecosystem.
