DraftKings and FanDuel expand into prediction market making
Updated
Updated · Front Office Sports · May 8
DraftKings and FanDuel expand into prediction market making
13 articles · Updated · Front Office Sports · May 8
DraftKings said on Friday the new business is already profitable, while Flutter said FanDuel started market making last month for a major third-party platform.
Both groups told investors prediction markets could add customers and revenue, with DraftKings citing strong April momentum and FanDuel aiming to provide liquidity across as many platforms as possible.
Analysts called the opportunity underappreciated but said uncertainty remains high, as regulatory complexity and FanDuel parent Flutter's executive shake-up cloud an early-stage strategy.
Amid a federal-state legal clash, what is the ultimate fate of the booming $20 billion prediction market industry?
As insider trading prosecutions begin, how can companies shield themselves from these new and complex legal dangers?
In Q1 2026, DraftKings and FanDuel intensified their focus on prediction markets, with DraftKings investing $200-$300 million and FanDuel's parent Flutter committing $300 million for later in the year. DraftKings integrated its prediction market into its Sportsbook Super App and launched its own market-making platform, achieving over $2.3 billion in annualized trading volume and early profitability. FanDuel, operating a standalone app partnered with CME Group, faced user criticism and generated minimal revenue. Both companies plan to scale around major events like the World Cup and NFL season. However, ongoing legal conflicts between federal and state regulators create uncertainty, driving industry consolidation and skepticism about long-term profitability until regulatory clarity emerges.