DraftKings has submitted a new application for membership with the National Futures Association (NFA), potentially allowing the sportsbook to enter the U.S. prediction markets sector in competition with Underdog, PrizePicks, and Fanatics.
The application, filed on June 24 under the entity name Gus III Holdings LLC, requests approval for DraftKings to function as both a Swap Firm—enabling the operation of its exchange as a Designated Contract Market (DCM)—and an Introducing Broker, a position currently absent from the prediction markets landscape.
Key figures behind this application include Jason Robins, DraftKings CEO; Alan Ellingson, CFO; and Paul Liberman, co-founder. Earlier, DraftKings had applied under the name Gus II Holdings but subsequently retracted the submission in April.
During the company’s second-quarter earnings discussion, Robins mentioned that DraftKings is “actively exploring” prediction markets and is in a “monitor mode.” The Boston-based firm has also considered acquiring existing companies in this space, including discussions to purchase Railbird, which holds U.S. Commodity Futures Trading Commission (CFTC) approval as a DCM.
Other fantasy sports and gambling companies are also seeking NFA membership. For instance, Underdog filed an application under UDM LLC in April seeking status as both a Swap Firm and a Futures Commission Merchant (FCM), later submitting a second application as G&B Broker for both Swap Firm and Introducing Broker approval.
PrizePicks applied on May 28 under Performance Predictions II LLC for Swap Firm and FCM credentials. Fanatics Betting & Gaming also submitted an application in May under Morton St. Trading OpCo, initially for Swap Firm and Introducing Broker approval, later broadening its request to include Forex Firm status.
While NFA membership is not a prerequisite for operating in prediction markets—exemplified by Kalshi, a CFTC-regulated DCM not affiliated with the NFA—it remains essential for FCMs that facilitate customer access to registered exchanges. The membership process involves thorough vetting of principals and compliance with ethical standards.
The market presents substantial potential. Robinhood, acting as an FCM by providing access to Kalshi’s event contracts, handled approximately $1 billion in trades during the second quarter, resulting in around $10 million in revenue with minimal operational costs.
This latest wave of applications highlights how major players are gearing up for opportunities in event-based markets, despite ongoing legal uncertainties surrounding the legality of sports prediction contracts in federal courts.