DraftKings in negotiations for purchase of prediction platform Railbird Exchange, according to a source
In a move that could significantly reshape the sports betting landscape, DraftKings is reportedly in advanced discussions to acquire Railbird Exchange, a federally licensed prediction market platform. The potential acquisition, if successful, would provide DraftKings with a shortcut to access prediction markets, potentially expanding its reach into states like California and Texas, where sports betting remains illegal.
Railbird Exchange, an upstart prediction markets platform, received approval from the Commodity Futures Trading Commission (CFTC) earlier this year. This federal licensure may be a key factor in its potential acquisition by DraftKings, as the latter had previously applied for a federal license to operate a prediction market but withdrew the application in April.
The discussions between DraftKings and Railbird Exchange are taking place within the context of a growing trend in the sports betting industry. The anticipated integration between sportsbooks and prediction markets is expected to be a significant development in the near future.
Neither DraftKings nor Railbird Exchange has confirmed the details of the talks, and the financial terms of the potential acquisition remain unknown. The spokesperson for DraftKings declined to comment on the specifics of the discussions, while Railbird did not respond to a request for comment.
Benchmark, a research firm, views this potential acquisition as a "very positive development" and has raised its price target on DraftKings, reflecting optimism about the deal's potential impact. However, the timeline for a finalized deal between the two companies is not currently known.
It's important to note that the potential acquisition of Railbird Exchange by DraftKings is one of several discussions the company is currently having regarding various matters. The sports betting industry is expected to see increased integration between sportsbooks and prediction markets in the near future, and DraftKings is strategically positioning itself to be at the forefront of this trend.
As always, more information will be released as it becomes available. Stay tuned for updates on this developing story.
DraftKings, with its potential acquisition of the federally licensed Railbird Exchange, could expand its business into states like California and Texas where sports betting is illegal, leveraging technology to reshape the sports betting landscape and potentially integrating with the prediction markets industry. This strategic move is viewed positively by Benchmark, a research firm, who has raised its price target on DraftKings, reflecting optimism about the deal's impact on the finance sector.
