In brief
- PrizePicks becomes first sports entertainment operator to receive FCM license from National Futures Association, allowing it to offer prediction markets.
- The move follows European lottery giant Allwyn International’s $1.6 billion acquisition of 62.3% stake in PrizePicks earlier this week.
- PrizePicks joins FanDuel as the second major brand in sports entertainment and gaming to enter the prediction market space, estimated to reach $95 billion by 2035.
Fantasy sports company PrizePicks is entering the prediction market game, after just landing a Futures Commission Merchant, or FCM, license from the National Futures Association.
That makes the company the first sports entertainment operator to receive an FCM from the NFA, which allows it to list contracts from licensed prediction markets. It also makes it at least the second major brand in the sports gambling and gaming space next to FanDuel to enter the red hot prediction market biz, which analysts estimate could reach $95 billion by 2035. Competing sportsbook DraftKings has also been rumored to be exploring a jump into prediction markets but has yet to confirm those intentions.
The new license for PrizePicks also marks the expansion of European lottery giant Allwyn International into the U.S. market. At the start of the week, the company acquired a 62.3% stake in the DFS operator in a deal valued at $1.6 billion.
Allwyn is a global lottery operator and manages the UK National Lottery. In fact, the company already had a small foothold in the U.S. before the deal was finalized.
“For Allwyn, the transaction is a unique opportunity to enter the strategically important sports and entertainment industry in the United States, expanding its business in the country beyond its existing operation of the Illinois Lottery,” the company said in a press release.
PrizePicks offers its real money, peer-to-peer game in 35 states and Washington, D.C.
The daily fantasy sports app specializes in “pick em” style contests. Instead of drafting an entire team and competing against other bettors, users make parlay-style bets on whether an athlete will go over or under a stat—like how many passing yards Kansas City Chiefs quarterback Patrick Mahomes will get in a specific game.
“The honor of being the first sports entertainment platform to receive a FCM registration from the NFA is a testament to our industry-leading compliance and consumer protection programs that both the NFA and CFTC demand,” Mike Ybarra, CEO of PrizePicks, said in a press release.
A PrizePicks spokesperson told Decrypt the company has “nothing concrete to share just yet,” about its plans to offer prediction markets to its users.
The FCM grants PrizePicks permission to offer prediction markets by teaming up with a company that has a Designated Contract Markets, or DCM, license. The list of DMC holders has grown considerably in the past year and includes the two largest prediction market operators: Kalshi and Polymarket.
A company can list and clear its own prediction market contracts with just a DCM, but not with an FCM. The latter allows companies to act as third-party brokers for prediction market platforms. For example, Robinhood is able to offer Kalshi prediction markets to its users because its derivatives arm holds an FCM license.
Sportsbooks and prediction market companies alike have been racing to obtain such licenses from the CFTC in order to legally enter the U.S. market, which is so far dominated by Kalshi. Just last week, Kalshi reported hitting $1 billion in monthly volume from its markets as it leapfrogged Polymarket in global market share in the sector.
Editor’s note: This article was updated after publication for clarity.
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