DraftKings is discussing the acquisition of Railbird, a prediction market with federal regulation, as mentioned by Front Office Sports. Completing this deal could represent a step for sportsbooks wanting partnerships with legal event-based exchanges before football season. Railbird started in 2021, built by ex-Point72 analysts Miles Saffran and Edward Tian, and works out of New York.

Railbird Gains Federal Approval as Designated Contract Market Among DraftKings’ Strategic Moves

The U.S. Commodity Futures Trading Commission (CFTC) gave Railbird approval in June 2025 to function as a Designated Contract Market (DCM). This federal license puts Railbird among a small number of legal prediction markets nationwide. On Railbird, people can trade contracts tied to actual event outcomes, such as politics, economics, sports, or weather. The founder’s project attracted investment from the SeatGeek CEO plus several venture capital companies and targeted operations in all 50 U.S states.

DraftKings declined to directly confirm these talks and instead stated, “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,” as told by Front Office Sports. DraftKings earlier looked for federal permission to run its own prediction market but took back that application in April.

DraftKings Explores Prediction Markets Amid Regulatory Challenges and Industry Partnerships

A spokesperson said, “DraftKings continues to monitor developments related to prediction markets as an emerging product that reflects evolving consumer engagement and warrants thoughtful consideration.” This deal idea appears as sportsbooks and prediction markets come closer together. In the previous month, FanDuel was said to have discussed with Kalshi, a CFTC-regulated provider that links to Robinhood and added sports market options.

Still, Kalshi faced regulatory actions, with cease-and-desist notifications in at least seven U.S. states, like Nevada and New Jersey. Kalshi answered by filing lawsuits in three states, gaining its first legal success in two locations. An industry source shared with Front Office Sports, “Every major sportsbook is lining up partnerships,” in the report that first revealed news about DraftKings and Railbird.

Normal sportsbooks get licensed state by state, but federal prediction markets like Railbird can work in California and Texas, where gambling on sports is illegal. Having federal permission may open more access for platforms such as Railbird, which could turn them into important tools for companies trying to enter new regions.