DraftKings Keeps Sportsbook and Prediction Markets on Separate State Maps

DraftKings has structured its sports event contract business so that it never overlaps, state by state, with its regulated online sportsbook, according to reporting by Gambling Insider. The company’s own availability page splits every U.S. state into one of three categories, and no state appears on more than one list.

Twenty-seven states plus Washington, D.C., and Puerto Rico carry DraftKings’ online sportsbook. A separate group of 18 states, including Texas, Florida, Georgia and California, gets “prediction sports markets” instead. Five more states get free-to-play contests only. Gambling Insider reports that Stephen Miraglia, DraftKings’ senior director of communications, confirmed the company does not run predictions where it has a sportsbook.

A design that answers three audiences at once

The split lets DraftKings promote a “Take Your Game Anywhere” campaign, launched Aug. 31, claiming coverage in all 50 states. It also keeps the company inside NFL advertising rules. The league confirmed to Gambling Insider that prediction-market ads are banned from games, stadiums, club deals and player endorsements, and that sportsbook partners can only advertise approved sportsbook products.

Because DraftKings’ prediction product has no customers in states where its sportsbook advertises, that restriction costs the company little. A state-specific predictions push on Aug. 25 targeted California, Texas, Georgia and Florida, the four largest states without legal online sports betting, offering $200 in bonuses after a $5 first trade. CEO Jason Robins said those states were chosen precisely because they have no sportsbook alternative.

Investors hear “no cannibalization”

For shareholders, the geographic split underpins DraftKings’ argument that predictions and sports betting barely touch. In the first-quarter update Robins wrote there was “no discernible impact from the rise of predictions” on the sportsbook business. The Aug. 6 second-quarter update went further, citing roughly 1% customer overlap between DraftKings Sportsbook and the largest prediction operator in sportsbook states, based on Carbon Arc card-deposit data.

DraftKings also estimated internally that 80 to 90 percent of prediction market volume in sportsbook states comes from professional betting syndicates and institutional traders, not casual bettors. Gambling Insider notes the low overlap is arguably a product of the map itself rather than proof of what customers would choose given both options side by side.

Volume climbs as margins thin

The growth numbers are substantial. Robins told the second-quarter call that annualized volume traded on predictions rose from $2.3 billion in April to $11 billion in July. More than 600,000 customers had engaged with the offering year to date, and parlay-style combos approached 20 percent of predictions volume within weeks of launch. Folding predictions into the main DraftKings app cut customer acquisition cost by more than 80 percent in April.

DraftKings launched its in-house exchange, DKeX, on June 26, and the original Predictions app went live in December across 38 states, with financial-only markets offered in some sportsbook states such as Connecticut.

The whole arrangement rests on a legal premise still unsettled in U.S. courts: that a contract tied to an NFL spread, sold outside a regulated sportsbook state, is not sports betting. Canadian operators and iGaming Ontario watch that fight closely, since any federal ruling on prediction markets could reshape how similar products are framed if they ever reach regulated provincial markets.

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