DraftKings Launches In-House Prediction Exchange as Trading Volume Explodes

• DraftKings has officially rolled out its proprietary, in-house prediction markets exchange, branded as DKeX
• The underlying technology and critical CFTC license powering the exchange were acquired through the company’s previous deal for Railbird Technologies
• The platform is experiencing explosive growth, with DraftKings reporting $3.4 billion in annualized consumer volume—and $11.3 billion in total trading volume—for the week ending June 21

Shares of DraftKings (NASDAQ: DKNG) surged Friday (June 26) after the gaming operator rolled out its highly anticipated proprietary exchange, DKeX—a move structurally designed to supercharge the economics of its fast-growing prediction business.

DraftKings Predictions, which debuted last December, has been routing trades through CME Group’s derivatives exchange with Wedbush serving as the Futures Commission Merchant (FCM).

By getting DKeX up and running, DraftKings not only exerts greater control over its prediction market’s financial future, but it also allays investor concerns about making good on the Railbird Technologies acquisition announced last October.

DKeX leverages the technology and Commodities Futures Trading Commission (CFTC) license from DraftKings’ acquisition of Railbird Technologies,” according to a statement issued by the gaming company.

DraftKings has confirmed the DKeX platform will be integrated into the company’s “Super App,” which provides customer with access to (in the states where it’s allowed) iGaming, lottery courier services, online sports betting and prediction markets under one umbrella.

Good Timing by DraftKings

Bringing DKeX to life when it did amounts to good timing for the gaming company because thanks to a World Cup boost, volume on DraftKings Predictions is soaring. Company data confirm the importance of the DKeX launch timing.

Boston-based DraftKings “expects continued growth throughout July, driven by ongoing enhancements to the platform, growing adoption of new event contracts and features such as combinations, and heightened interest surrounding the World Cup,” it said in the statement.

“Since launching in mid-May, more than 30% of customers have used combinations, which allow multiple individual contracts to be bundled into a single position, highlighting strong demand for a customizable, sports-first prediction markets experience,” DraftKings added.

The debut of DKeX also arrives as DraftKings Predictions is expanding its combo or parlay menu while adding more sports event contracts. Additions include player and futures contracts and No Runs First Inning (NRFI) as well as more NBA, NHL and international sports derivatives.

DraftKings Seeing Prediction Market Momentum

The U.S. prediction market industry is still in its formative stages, but some analysts expect it will eventually morph into a five-horse race with DraftKings being one of those competitors. That makes sense from the perspectives of brand awareness and trading competencies.

Indeed, there’s a momentum case for DraftKings Predictions. One analyst forecast that business could tack on $10 billion to $14 billion to the company’s enterprise value by 2030 if DraftKings Predictions reaches 30% market share.

“The momentum we’ve seen on DraftKings Predictions in recent months reflects the significant progress we’ve made in delivering a more seamless and connected experience for sports fans,” DraftKings CEO Jason Robins added.