In a bold stride into the prediction market arena, DraftKings has announced its acquisition of Railbird, a CFTC-regulated platform, marking a pivotal moment in the evolution of sports betting. This acquisition, finalized this week for an undisclosed sum, is set to catapult DraftKings into the forefront of a rapidly growing market, as it prepares to launch its new mobile app, DraftKings Predictions, in the coming months.
DraftKings Predictions aims to cover a diverse array of markets, ranging from finance to entertainment and cultural events, providing users with a comprehensive platform for betting on future outcomes. The strategic partnership with Polymarket will see the latter serve as the clearinghouse for the new app, a move confirmed by Polymarket CEO Shayne Coplan via social media. Coplan expressed enthusiasm for the collaboration, emphasizing the significance of DraftKings’ entry into the prediction market space.
As a clearinghouse, Polymarket will play a crucial role in verifying trades, holding collateral, and ensuring that contracts are settled fairly, thus reducing counterparty risks and maintaining trust among participants in this burgeoning market. DraftKings has indicated that the new product will connect with multiple exchanges, allowing for a wide range of offerings to its users.
This partnership signifies DraftKings’ first major foray into cryptocurrency and blockchain technology since the closure of its NFT marketplace in July 2024, a move that has been anticipated by industry watchers. Notably, Polymarket recently enhanced its clearinghouse capabilities through the acquisition of QCEX for $112 million earlier this year, positioning itself as a leader in the prediction market sector.
Record-Breaking Trading Volumes
The prediction market landscape has been experiencing an unprecedented surge in trading volumes this October. Polymarket and Kalshi have collectively surpassed $4.63 billion in trading volume through the first 23 days of the month, breaking the previous record of $4.17 billion set in September. Kalshi alone accounted for $2.87 billion this month, marking its highest monthly total to date, while Polymarket witnessed its weekly trading volume soar past $2 billion for the week ending October 19, the highest in its history.
Polymarket’s Ambitious Funding Goals
In line with its growth trajectory, Polymarket is currently in discussions with investors for a new funding round, targeting a valuation between $12 billion and $15 billion. This ambitious goal represents a dramatic increase from its valuation of $1 billion just a few months prior, following a $200 million round led by Peter Thiel’s Founders Fund.
Earlier in October, the Intercontinental Exchange made headlines by agreeing to invest up to $2 billion in Polymarket, which valued the platform at $8 billion pre-money, propelling CEO Shayne Coplan into the ranks of the youngest self-made billionaires.
Meanwhile, Kalshi is also attracting significant investor interest, fielding offers that value it above $10 billion, more than double its recent valuation. This indicates a booming interest in prediction markets, with Polymarket further solidifying its position by forming partnerships with major entities like the National Hockey League, marking a significant milestone as the first collaboration between a major US sports league and the prediction market sector.
Additionally, Polymarket has expanded its capabilities to support deposits and withdrawals on Binance’s BNB Chain, enhancing its existing integrations with Polygon and Chainlink. This expansion reflects a commitment to innovating and adapting within the rapidly evolving landscape of prediction markets.
As DraftKings and Polymarket pave the way for a new era in prediction markets, the industry eagerly anticipates how this partnership will reshape the betting experience and drive further growth in this dynamic sector.
