DraftKings Eyes Futures Contracts, Crypto as Laws, Regulations Shift #CriptoNews

DraftKings would consider offering futures contracts on sports outcomes—gambling-adjacent markets that have gained popularity recently at fintech companies—should the U.S. government give them the green light, CEO Jason Robins said Friday in an interview.

The company (Nasdaq: DKNG) may also explore the possibility of accepting some cryptocurrencies, Robins said. That comes as crypto markets have seen a surge in both value and opportunity with the incoming Donald Trump presidency.

“We’re 30-ish days into the new administration—I think everyone has a sense of where things are going in some regard, but it’s still early,” Robins said. “From a DraftKings perspective, we have to be paying very close attention to anything that can be an opportunity or in any way affect us.”

Futures contracts are likely the more immediate opportunity. Legislated by the Commodity Exchange Act, they have historically existed for predicting and hedging the price of commodities such as oil and agriculture. Companies have expanded the products to areas more familiar to retail investors, such as prediction markets surrounding U.S. election results, and most recently, sports outcomes. Those offerings are controversial, as critics say similarities to sports gambling make it inappropriate to be overseen by the federal Commodity Futures Trading Commission (CFTC) rather than the state regulators who govern sportsbooks such as DraftKings.

Kalshi and Crypto.com are the two U.S. financial technology companies with active sports event futures markets, pushing ahead despite regulatory uncertainty. Kalshi, for example, says it saw about $27 million in contracts purchased on last week’s Super Bowl. Robinhood listed sports futures for one day this month through a partnership with Kalshi before following the CFTC’s request to take them down. Webull this week announced a pact with Kalshi to power futures trades on its platform—but without sports.

The CFTC is currently in a 45-day review period analyzing the merits of sports futures, and Robins said his company is awaiting the commission’s official ruling. As a potential indication of where things may pan out, Donald Trump Jr. is an advisor to Kalshi, and President Trump nominated Kalshi board member Brian Quintenz to run the CFTC. Even after the CFTC ruling, DraftKings would need to decide how to square that result with its general deference to state gambling regulators for its other products.

Robins said his company is not spending any lobbying dollars on the topic and does not have a problem with the competition from fintech companies.

“I don’t view it as a threat,” he said. “It increases the total addressable market for people who like those types of products, which is a good thing.”

That’s notable, because others in the industry have issues with the new players. The American Gaming Association, whose members include DraftKings, wrote in a statement this month that it was “concerned” with “efforts by certain trading platforms and digital exchanges to launch national sports event contracts that appear to circumvent state regulatory framework.”

Accepting stablecoins—cryptocurrencies pegged to a fiat currency, like the U.S. dollar—is another opportunity that could expand DraftKings’ user base and allow it to match offerings currently made by other companies. For DraftKings to accept stablecoins, it would require the go-ahead from individual state regulators, Robins said, and there’s only a few who currently would allow it. If that number were to grow, it could change DraftKings’ approach to digital currencies.

“You have to look at the overall momentum right now as being very positive for crypto,” he said.

In both instances, Robins said, the company’s calculus will consider more than just legality and regulation. Launching new products takes money and manpower.

“What does it mean for our product roadmap if we have to deprioritize other things to build something new?” he said. “Those are all conversations that we have in preparation for different outcomes that could occur, so we’re ready to go.”

DraftKings released fourth quarter earnings after the close on Thursday. The stock is up 12% on Friday.