• DraftKings (NasdaqGS:DKNG) announced an expansion of its federally regulated prediction markets through a new partnership with Crypto.com.
• The company is growing its Predictions platform to include event contracts tied to sports, culture, and politics.
• New offerings include player specific event contracts for NFL and NBA games, along with contracts linked to entertainment and broader cultural events.

For you as an investor, this move signals DraftKings pushing beyond its traditional core of online sports betting and fantasy contests into a broader set of prediction markets. The company is focusing on areas where consumer interest in event contracts is building, including political outcomes and entertainment events, not just game results.

This expansion may reshape how DraftKings (NasdaqGS:DKNG) competes with both sportsbooks and dedicated prediction platforms as the segment develops. The Crypto.com partnership could also influence how users fund, access, and perceive these products as event contracts receive more regulatory clarity and wider consumer attention.

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This partnership looks like DraftKings leaning into the same trend that has raised competitive questions for its core sportsbook. By expanding federally regulated prediction markets with Crypto.com, DraftKings is tying its brand to event contracts that already appear to be attracting betting-style volume in other venues. For you, the key question is whether this extension supplements or diverts activity from its existing betting products. The company already reports a transition from a net loss in 2024 to slightly positive full year net income in 2025 and a profitable Q4, so management now has a bit more flexibility to test new categories without relying solely on promotional spend.

How This Fits Into The DraftKings Narrative

• The broader Predictions offering lines up with the view that new markets and regulatory liberalization can expand DraftKings' addressable market, especially in states that permit event contracts but not traditional online sports betting.
• At the same time, analysts have flagged prediction markets as a possible headwind for earnings, since they may pressure margins and make future growth less straightforward than sportsbook led scenarios in the narrative suggest.
• The partnership with a CFTC regulated derivatives exchange and the plan to integrate Railbird Exchange introduce an extra layer of federal and exchange style oversight that is not fully reflected in the existing narrative focus on state led sports betting and iGaming.

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The Risks and Rewards Investors Should Consider

• ⚠️ Event contracts on sports, culture, and politics depend on evolving regulation, and any tighter stance from federal or state authorities could limit where and how DraftKings can offer these products.
• ⚠️ Prediction markets may overlap with traditional sportsbooks from DraftKings, FanDuel, and BetMGM, raising the risk that handle simply shifts channels instead of adding incremental activity.
• 🎁 The agreement with Crypto.com gives DraftKings a way to participate directly in prediction market growth that has already drawn interest to rivals such as Kalshi and Polymarket.
• 🎁 Player specific contracts across multiple sports and potential future categories like politics broaden the product set, which may help DraftKings retain users if prediction markets keep gaining traction alongside traditional betting.

What To Watch Going Forward

From here, it is worth watching how DraftKings reports user engagement and revenue contribution from Predictions relative to its sportsbook and iGaming operations, and whether management frames the product as incremental or overlapping with existing betting activity. Competitive responses from FanDuel, BetMGM, and newer prediction focused platforms will also matter, especially if they secure their own high profile distribution partners. Any regulatory developments affecting event contracts, particularly at the CFTC level and in larger states, will likely shape how central this business line becomes to the DraftKings story.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.