DraftKings is reportedly engaged in acquisition talks with Railbird Exchange, a relatively new entrant in the prediction market industry. The discussions, still in preliminary stages, reflect DraftKings’ ongoing efforts to gain a foothold in the regulated predictions arena after earlier attempts to enter the space independently stalled.

According to Front Office Sports, DraftKings has shown interest in acquiring Railbird Exchange, which recently received federal authorization to operate as a prediction market platform. While no deal has been finalized and financial terms remain undisclosed, the timing of these discussions aligns with heightened industry movement ahead of the football season—a critical window for sportsbook innovation and expansion.

A DraftKings spokesperson commented, “DraftKings speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to comment on the specifics of any of those discussions.” Railbird, for its part, has not issued any public response to the acquisition rumors.

Railbird’s Regulatory Milestone and Growth Trajectory

Railbird Exchange, founded in 2021 by Point72 Asset Management alumni Miles Saffran and Edward Tian, recently secured regulatory approval from the Commodity Futures Trading Commission (CFTC) to operate in the United States. The New York-based company joins a small group of federally authorized prediction market platforms, a notable achievement in a space often fraught with legal ambiguity and regulatory friction.

The platform’s backers include Y Combinator—through its Winter 2022 accelerator program—and Jack Groetzinger, co-founder of SeatGeek, as well as other unnamed venture investors. Crunchbase currently lists Railbird as a fast-growing company and places the likelihood of it securing another funding round in the next six months at 86%. The platform is even described by Crunchbase as a “likely” target for acquisition, further fueling speculation around its future.

DraftKings Looks to Prediction Markets After Past Setbacks

DraftKings’ interest in the prediction markets is not new. The Boston-based sportsbook previously explored entering the space through its own product, DraftKings Predict, by registering with the National Futures Association (NFA). However, that effort stalled earlier this year when the company abruptly withdrew its application, suggesting a change in strategy.

With competitors like Kalshi and Polymarket steadily advancing despite legal hurdles, DraftKings appears to be reassessing its position. By potentially acquiring an already-licensed entity like Railbird, DraftKings may bypass some of the regulatory complexities that hampered its earlier initiatives and avoid falling behind in a rapidly evolving market.

Although prediction markets have long been viewed as a regulatory minefield, they are increasingly being seen by private companies as a valuable frontier for diversification. These platforms offer a different kind of engagement—where users wager on political outcomes, economic indicators, and cultural events rather than sports—potentially broadening DraftKings’ customer base.

A Strategic Pattern of Acquisitions

This potential move is consistent with DraftKings’ broader strategy of expanding through acquisitions. In 2023, the company acquired internet lottery operator Jackpocket for $750 million in cash and stock, a move that allowed it to tap into the growing iLottery sector and position itself for future state-level legalizations. That was followed by the purchase of Simplebet Inc., a provider of microbetting technology, which enabled DraftKings to strengthen its real-time wagering capabilities.

These acquisitions highlight the company’s commitment to remaining competitive and innovative in an increasingly fragmented gaming landscape. Should the Railbird deal come to fruition, it could serve as DraftKings’ entry point into prediction markets, helping it counter emerging competition and expand into key markets like California and Texas—jurisdictions where other forms of online betting face more resistance. As of now, neither DraftKings nor Railbird has publicly confirmed any binding agreement.