DraftKings Considers Adding Election Betting

The golden halo surrounding prediction markets following Donald Trump’s election victory could attract some powerful rivals betting on future political events. competitions.

DraftKings Chief Executive Jason Robins said Friday morning that his company, which offers sports betting and casino gambling through mobile apps, is now considering adding election betting.

“We’re definitely looking at something in the run-up to the next presidential election, and there will potentially be an opportunity to look at something sooner,” Robins said in response to a question on a call with analysts.

Election betting on prediction markets such as Kalshi and ForecastEx began to move forward this year amid widespread uncertainty over the battle between Trump and Vice President Kamala Harris. Kalshi, for example, said this traded over $1 billion on election day. And interest has increased sharply now that it has become clear that Prediction markets did a better job than opinion polls in projecting a landslide victory for Trump..

Federal regulators last year banned prediction markets from accepting bets on elections, but a U.S. appeals court in October trade allowed about the election results to resume. However, US citizens are prohibited from betting on Polymarket, arguably the largest prediction market of all.

The format for betting on elections in prediction markets is very different from sports betting on DraftKings and competing apps.

Each election bet is a contract that requires the prediction market to match the buyer and seller for each bet. Contract prices directly reflect traders’ demand.

Sports betting apps use mathematical models to set betting odds, although they also try to balance bets placed on each side. This doesn’t always work out. DraftKings said its revenue will be almost In the fourth quarter, a decrease of $200 million. than previously thought, because the players at football games got lucky and won more than the company could compensate for the players’ losses.

And while sports betting is regulated at the state level, election betting is regulated by the Commodity Futures Trading Commission, a federal agency in Washington.

The different formats and rules would require DraftKings to develop a new service that might not be worth the effort, Robins said.

“It’s a different structure,” he said. “It’s not licensed as a betting product, it’s licensed as a financial market. So it’s definitely a different matter. So we’ll have to see where that ranks on the priority list.”

Aaron Pressman can be reached at [email protected]. Follow him @ampressman.