DRAFTKINGS

Brief Background on DraftKings Predictions

DraftKings, one of the pioneers of regulated online sports betting in the United States following the repeal of PASPA, initially resisted the emergence of sports prediction markets offered by platforms such as Kalshi, Polymarket, and Robinhood. Like much of the traditional sportsbook industry, DraftKings argued that sports event contracts resembled sports wagering and should be subject to the same regulatory framework as state-licensed sportsbooks. As prediction markets continued to gain legal traction under the oversight of the U.S. Commodity Futures Trading Commission (CFTC) and courts increasingly recognized their distinct regulatory status, however, it became apparent that opposing the category would do little to slow its growth. Rather than remain on the sidelines, DraftKings shifted its strategy by entering the market itself, acknowledging that prediction markets had become a significant new segment of the sports trading landscape.

That strategic pivot led to the launch of DraftKings Predictions, the company’s own CFTC-regulated prediction market platform, allowing customers to trade sports event contracts alongside other real-world events. Because these contracts are regulated as financial derivatives rather than traditional gambling products, DraftKings can offer them in many jurisdictions where conventional online sports betting remains prohibited, including states such as California, Hawaii, and Utah, substantially expanding its potential customer base beyond the states where sportsbook operations are permitted. This regulatory distinction enables DraftKings to deliver a sports betting-like experience to consumers across much of the United States while operating under the CFTC’s jurisdiction instead of individual state gaming regulators. As an established sportsbook brand with a large customer base, DraftKings is emerging as one of the dominant forces in the U.S. prediction market industry. While this may grow their revenue prospects, it also suggests that they must share responsibility for growing public health concerns regarding prediction market addiction.

How DraftKings Predictions Design May Promote Addictive Behavior

DraftKings Predictions app and website features that researchers and regulators have identified as potentially increasing engagement or posing risks for vulnerable users when implemented without adequate safeguards:

• Continuous opportunities to trade or enter new event contracts throughout the day.
• Real-time price movements and live market updates that encourage frequent checking of the DraftKings Predictions app.
• Instant notifications about market activity, price changes, and contract settlements.
• A mobile-first experience that makes participation on DraftKings Predictions available virtually anywhere.
• Rapid settlement of many event contracts, allowing users to quickly reinvest proceeds.
• Frictionless deposits and account funding that reduce barriers to additional spending on the DraftKings Predictions app.
• Personalized recommendations based on prior activity and interests.
• Gamified elements, such as visual animations, progress indicators, or achievement systems that can make DraftKings Predictions participation feel more like a game.
• A large selection of markets covering numerous sports and events, increasing opportunities for repeated participation.
• Time-sensitive markets that create a sense of urgency or fear of missing out (FOMO).
• Social media integration and news-driven market discovery that can encourage impulsive decisions.
• DraftKings Predictions promotional offers or incentives that encourage initial or continued participation, where permitted.

Further, DraftKings’ use of green and orange throughout its app aligns with color psychology principles suggesting that green is commonly associated with positive outcomes and financial gains, while orange is often used to attract attention and encourage action—color combinations that many digital products employ to increase user engagement, although the effect of color alone on user behavior is difficult to isolate and varies by individual.