Everything DraftKings' CEO Just Said About Prediction Markets

Jason Robins spoke extensively on the topic at a Bank of America event, but he didn't reveal much about the gambling company's plans. Roundup: Kalshi trading volume hits $300M for the weekend.

DraftKings CEO Jason Robins talked at length about the nascent prediction markets industry and his company’s potential place in it.

Robins spoke Thursday at the Bank of America Securities 2025 Gaming & Lodging Conference. The full webcast is here.

Some high-level takeaways from Robins’ remarks:

• Robins said he thinks sports event contracts could be a compelling offering in states without state-regulated sports betting.

• He said it would be “challenging” for the prediction markets product to compete with a more traditional online sports betting offering.

• He was coy about DraftKings’ plans in the space, saying he wasn’t in a rush to announce any plans but that didn’t mean nothing was going on in the background.

• He could see a world where there’s a further convergence between financial products and sports products — noting Robinhood’s entrance into sports betting — and that could be something DraftKings could pursue.

Here’s the full transcript of the questions and answers (lightly cleaned up for readability):

Question: So I want to switch gears a little bit. Of the big topics that have come up in our conversations, I don't know if there's been a bigger one in the last three months than prediction markets. … I know since even last public comment, a heck of a lot has evolved here. So FanDuel announced a partnership with CME. Underdog announced sort of a unique relationship with Crypto.com. And Polymarket, as of yesterday, from what we can tell, is officially back in the US. I don't have a product slide, but they are able to operate here more independently than they were prior to that. So a lot going on in this vertical. You had a very interesting — sort of open to the idea of always need to be around the hoop, but maybe don't want to or need to be first mover in some way, shape or form — I may have paraphrased that poorly. But unpack that for us a little bit. And just as you started to see some of the strategic moves around you, where is DraftKings at right now?

Robins: Well, I mean, I think the most important question is where is the space going to evolve? And then I'll come back to kind of where we're going. But right now, you're right, there's a lot of cards being turned over in real time. And so we're getting a lot of information on these things like -- and it continues to appear that at least at the federal level, there is going to be -- this is going to be here to stay.

And so then the question becomes, OK, what happens with the states. And obviously, for someone like a Polymarket, they don't have to worry about that, and they also don't have any revenue risk in the states. But I think for somebody like us, we would view both the revenue opportunity as well as the place where we could not have as much risk is largely focusing on places that did not have online sports betting for anything that resembles sports. And I think for other types of things like non-sports predictions, which was, I think, what Flutter announced they were doing at least initially. I think that's probably a little more widespread, but also depends, and we have to sort of see how that goes, too.

We've always kind of been — and this applies not just to this, but I think it's especially important for this of the mindset — that why make an announcement before you have to on anything. And so I don't think we feel like we have to announce what our plans are until if the time came, we were ready to actually act on those plans or pretty close to ready to act on those plans. And I think that's just the best way of kind of seeing what happens without being committal, but also doesn't mean internally we can't be preparing and doing things and slowing down at all there.

So I don't know if it's as much … we don't think that we should be an early mover or anything like that as much as it is. We have to make sure we have the right thing and we are prepared to do it. And when that happens, if that happens, we'll announce something, but we don't feel like we need to announce anything ahead of that, which is a different strategy than I think others take, but there's pros and cons to both, I think. But that's just … for better or worse, how we've always kind of operated in these types of situations.

Q: I mean, you made an interesting point around just like — where I would go — like if I uplevel this a little bit, I would just start with, is this a TAM that you can't ignore, right? So when you think about size of what's happening because there is a debate in the industry of … we look at the UK and we say that this is — pick your number, high single digit of mix, and it's a product that's always existed. But then you see a product evolution, and there were a heck of a lot of people that did similar UK analysis to the US and we're like, ‘Oh, sports betting is probably not going to be that as big of a deal or as disruptive either.’ Kind of how do you … come out on this — people talk about right to win in this vertical and then people also talk about, oh, that's probably not as big of a deal as you think. Where are you out on it? And I need to pay attention here.

Robins: I mean I think it's pretty simple. I think the TAM opportunity is likely to be very significant in states that do not have legal online sports betting. And I think it is likely to be fairly small in states that do have online sports betting. And I give you two reasons. One, evidence-based UK example, that is a market where both products coexist together, and it's a single-digit percentage of the total revenue, which I think is an indication that when both products are available, customers overwhelmingly prefer the traditional online sports betting product.

The other thing I would say is just if you think about it conceptually, it's going to be very difficult to ever have as full-featured and offering in a prediction market setup as you could in an online sportsbook. One of the chief reasons being risk management, when you are putting as a market maker, a market up on an exchange, you just have to be comfortable with anyone taking that liquidity. Anyone can fill that order vs. we are able to place limits on sharps and other people. And that is the only reason we're able to offer the variety of bets and things that we can. If we offered all the different bets that we offered, and we weren't able to do that, we would get picked off and destroyed, right? So I think that is going to be a limiting factor for not just the variety of bets, but parlays and other sorts of combinability and things like that. For example, if you are putting out — we were just talking about this earlier, actually, a very high leg parlay, you have to collateralize the potential winnings on that every time you do that.

So it's pretty hard even if you know you're going to win the vast majority of these parlays and you have enough variety out there that you're not going to lose on — you're not going to — even if you somehow knew that and you could manage the risk, which is also an if because you don't know who's taking your bet on the -- or who's taking the order on the other side. You also have to then collateralize all that, too.

So I just think it's virtually impossible under that type of regulatory framework to ever have something that could be as rich and varied as what you see in an online sportsbook. But no doubt, there will be in a state that doesn't have an online sportsbook available, at least the legal one, there will be people that just want to go and do game lines and other simpler stuff that's available on it. So that's kind of like the way I look at it. I think where you have both, it's clearly, in my mind, going to be challenging for that product to compete. But I think where you don't have anything else, it's pretty good.

Q: One thing that also evolved differently in the UK was the kind of verticality of the tech stack. Here, it became just absolutely required that you own your own tech. You guys were super early and a lot of foresight around SBTech, which I think has turned into a huge amount of your platform. You've brought in further technology, Simplebet and other things that you've built around that beyond that. But it's become, again, de rigueur, and that's what you do in American online sports betting. Do you think the same requirement is going to be there for prediction? Because right now, one of the things that has allowed for faster move to market for the public announcements that have occurred has been owning -- has been some sort of partnership or B2B framework. It has not been owning a vertical tech stack. So do you think that's going to be a necessary part of this landscape? Or is the exchange-based model different?

Robins: Hard to know because it's really not even a question of do you want to own your tech, but what parts of the tech are absolutely essential to own and what's not. And I think it's too early to know exactly what the answer to that will be. But I think as a general strategy, controlling more is always in almost any case I can think of in a technology product better. But it doesn't mean everything. Even today … we use plenty of partners for different parts of the tech stack. We use Amazon Web Services. I mean there are a lot of pieces.

So I don't think I have enough understanding of this ecosystem to know that yet. And I think what we did in sports betting, it could end up being a template where we actually did start off partnering on the B2B side with Kambi, and it took us a couple of years before we really realized — or maybe a year before we realized like we got to own this thing, and that's when we did the SBTech deal and went public and all that. And I think part of that was the notion of owning or having our own tech initially wasn't even realistic at that point. And I think if we did, it would have had to been an acquisition of a level we weren't comfortable making. So like those are all factors, I think, that you have to consider. But generally speaking, I think owning more of the tech is usually better in almost any consumer product than not.

Q: And maybe kind of last on this area, but just be zooming out, as a CEO, there seems to be some nexus of financial technology that's entering this discussion here, whether you look at — the primary name that comes up increasingly in our discussions is Robinhood as sort of an onboard or obviously on the brand or broker side of this. But I kind of want to ask this from DraftKings’ perspective, is there a world where you could be a meaningful platform in sort of a non-sports context? Or … how important is the sports overlay to DraftKings as we start to think about some world where convergence of financial products and again, what we'd consider today as truly a sports offering start to come together?

Robins: It's a very interesting question you're asking. And I think that if things continue the way that they are trending today, there will be some convergence there. And it's actually really for one simple reason, which is if we do end up going into something like predictions or sports predictions, we're going to have to build out or acquire or partner to … build out the regulatory framework to operate the same types of products that are financial instruments of a variety, right?

So once you kind of have that, it was sort of similar to when we were just doing fantasy sports, it was a huge dig to think of getting into online in any way when it was smaller in the US because it was just a lot of effort. And at that time, I think it was just New Jersey doing iGaming. But once sports came, we're like we're going to make the investment and we built out everything we need to do sports betting, yes, we might as well do iGaming. We already have a lot of that, and we know that there's a market opportunity there. And so I kind of think of that as similar.

Now, hopefully, that becomes successful for us. But like if I were approaching, for example, the other way and saying will we just jump into financial products absent of anything like this, I'd say, I don't know if we have a right to win and if that's the place we want to focus now. But if we're going to build out the other stuff, then you might as well at least explore extending into there. And I think that's sort of what you're seeing is that the Robinhoods, the financial products are starting to dip into sports. And I think potentially, you could see the other side happen too, once this all gets built out, if it all gets built out.

Prediction markets roundup

• Kalshi’s trading volume in the first full football weekend: It was the first weekend that Kalshi had both college and pro football. What did that look like? For Saturday and Sunday, Kalshi saw $300 million in trading volume (which is NOT the same as sports betting handle). Some more on that data:

  • 96% of all volume was sports

  • 84% was football

  • 53% was NFL game winners; Sunday night’s game between Buffalo and Baltimore was the most traded game

  • $196 million traded on Sunday, the biggest day since the launch of sports markets

  • Here’s a glance at the most bet on traded NFL games:

• The case of the headless Wall Street regulator (Politico): “Brian Quintenz, a veteran financial regulator with ties to the powerful venture capital firm Andreessen Horowitz and the up-and-coming prediction market operator Kalshi, seemed to be a shoo-in as Wall Street’s next top derivatives regulator. And then Tyler and Cameron Winklevoss came calling. Now, six weeks after the cryptocurrency billionaires pressed President Donald Trump to reconsider his nominee for Commodity Futures Trading Commission chair, Quintenz is in limbo. The uncertainty surrounding the agency’s future comes at an awkward time: The Senate is considering a bill handing the CFTC sweeping new power over the $4 trillion digital asset market. The Senate Agriculture Committee has yet to hear from the White House about whether to move on Quintenz’s nomination, spokesperson Sara Lasure said. Earlier this summer — after the Facebook-famous Winklevii told Trump that Quintenz doesn’t align with his agenda — the administration asked the panel to delay a scheduled vote on the nomination.

  Lobbyists and executives across the traditional finance and crypto industries are now musing about potential alternative CFTC chairs, should it not be Quintenz.”

• Polymarket hits all-time high for new markets created as platform eyes US return (The Block): “As Polymarket gears up for a return to the United States, the predictions markets platform hit a milestone last month. The number of new markets on a monthly basis reached 13,800 in August, blowing past the previous record from July by about 2,000 markets. Markets represent individual events that users can wager on.”

• The Inside Story of Crypto.com’s Deal With Underdog (Brogan Law): This is a must-read, for the insight into Crypto.com’s side of things from this Substack:

  • In a discussion with the Brogan Law Newsletter, Crypto.com general counsel Nick Lundgren described time to market for this type of product as brisk, saying they could come to market in as little as thirty days. The reason it is so fast is that it piggybacks the back-end architecture from the underlying exchange. The front end acts on behalf of the exchange, shuttling customers seamlessly into an environment running on NADEX servers. Users become NADEX customers, and Underdog sits outside the flow of funds. This likely makes the build-out extremely light, much more closely comparable to hosting a webpage in a browser than building a new financial product.

  • Crypto.com has interpreted existing law to say that this analogy pertains across context. In other words, if you can host it, as long as it is ultimately running through the exchange, then the regulatory remains light. According to Lundgren, “if you open up your X app or Facebook app or and they wanted to put prediction markets in. We could have a technology service provider arrangement on that. If you had CNN or Fox News articles and you wanted to put prediction market side by side to it, we could have a TSP arrangement there as well.”

  • The model allows a variety of vendors to access prediction markets easily, presenting a fascinating vision of the future. As fast as setting up a splash page, prediction market portals could pop up across the internet. As much as I pressed insiders on the legal margins of this paradigm, none articulated any. As it stands, these markets could simply be hosted anywhere.

  • Anywhere? What a time to be alive.

• ICYMI this morning, from attorney Andrew Kim: