TLDR
- DraftKings is acquiring Railbird Technologies to enter the prediction markets business, though deal terms were not disclosed.
- The company will launch “DraftKings Predictions” app in coming months for trading regulated event contracts on finance, culture, and entertainment outcomes.
- Railbird Exchange is a CFTC-licensed platform that gives DraftKings an established entry into the predictions market space.
- Shares rose 2% on the news but remain down 8% for 2025 as the company faces growing competition in online betting.
- Stifel maintained its Buy rating and $51 price target following the acquisition announcement.
DraftKings announced Tuesday it is buying Railbird Technologies. The move marks the company’s expansion into the prediction markets business.
Financial terms of the deal were not disclosed. Railbird Exchange is a CFTC-licensed exchange that will provide DraftKings an established platform in the space.
The online sports betting operator plans to launch a new standalone app called “DraftKings Predictions” in the coming months. The app will allow customers to trade regulated event contracts on real-world outcomes.
These contracts will cover finance, culture, and entertainment categories. DraftKings said it may expand into other categories over time.
Co-founder and CEO Jason Robins said the addition of Railbird “positions us to win in this incremental space.” The acquisition follows earlier reports from Front Office Sports in July that suggested DraftKings had interest in buying Railbird.
Taking On New Competitors
The move puts DraftKings in direct competition with prediction market operators Kalshi and Polymarket. Both platforms have seen their popularity and valuations soar this year.
Online prediction markets have surged in popularity in 2025 as they’ve expanded into new markets. Sports betting has been a major driver of growth for these platforms.
This pits them against more heavily regulated online sports betting operators like DraftKings. The purchase of Railbird could help DraftKings compete in this space.
Stock Performance and Analyst Response
Shares of DraftKings rose 2% following the announcement. However, the stock remains down about 8% for 2025.
The company has faced growing competition in the online betting market this year. Stifel maintained its Buy rating and $51 price target for DraftKings after the acquisition news.
The analyst firm made no changes to its financial model. Stifel plans to update its outlook during its typical quarterly preview.
InvestingPro data shows analysts expect both sales and net income growth this year. The company is projected to turn profitable.
DraftKings currently operates with a moderate debt level. The stock trades at a high Price/Book multiple.
Citizens has maintained its Market Outperform rating for DraftKings. However, the firm anticipates a weak upcoming quarter with sports betting and iGaming revenue expected to fall short of market expectations.
Berenberg recently upgraded DraftKings’ stock rating from Hold to Buy. The upgrade was attributed to the company’s growth and margin improvements.
DraftKings recently alerted customers about account breaches from credential stuffing attacks. The company is actively investigating the security incident.
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