DraftKings Focuses on Pushing Prediction Markets in California

California is a rare exception when it comes to sports betting rules in the United States. The state does not support legal sports betting the way Nevada and New Jersey have, but this does not mean that trading on the outcomes of games is prohibited. In fact, DraftKings is betting on it, as the company, usually associated with sports betting and iGaming, has expanded in the state through its prediction market platform. Prediction Markets vs. Traditional Sports Betting Prediction markets, unlike sports betting markets, are regulated under the Commodity Futures Trading Commission (CFTC) and arguably do not constitute gambling, meaning that California state gaming laws do not apply. DraftKings is hardly the only company to have probed the depths of prediction markets locally, with event contract natives Kalshi and Polymarket also offering their products in the state and catering to the millions of adults living there. DraftKings is further pushing ahead with a new advertising campaign launched by its prediction market platform, DraftKings Predictions, in a bid to strengthen its presence locally and deliver commercial success across its newest product arm. Data from Aldrin, a research firm specializing in prediction markets, also suggests that DraftKings Predictions is now shifting into a higher gear, hoping to capitalize on states that have huge sports betting potential but have not yet explored it. This could happen through the introduction of prediction markets, which are technically not subject to gaming laws, although the argument has already caused a lot of tension between regulators, businesses, and the judiciary, as well as problem gambling advocates. DraftKings, for example, is pushing into places such as Georgia, Texas and California, and even encroaching on Hard Rock Bet’s territory in Florida, where the sportsbook enjoys a full monopoly in the market. A Growing Divide Between Regulators and Operators Marketing attempts put forward by DraftKings Predictions fall under the same narrative painted by competitors such as Kalshi and Polymarket. Because their offering is regulated by the CFTC, they argue it can supersede state gaming laws. Furthermore, companies in the sector argue that their products constitute financial markets and are not true sports betting. Many state regulators have begged to differ. The difference in opinion has even caused companies such as Fanatics, DraftKings, and FanDuel, which offer traditional sports betting markets, to quit the American Gaming Association, a trade group defending the interests of the legal gambling sector, which has been antagonistic towards prediction markets. At the same time, the sector is getting busy, with most analysts suggesting there would only be room for five to eight prediction market platforms, with traditional betting giants willing to muster resources and try to capitalize on this emerging trend, not least to penetrate states that have previously been off-limits to them.