A busy and potentially lucrative week for PrizePicks continues.
A day after announcing that the sprawling daily fantasy sports platform had been acquired by Allwyn Entertainment, which runs lotteries in Illinois and the United Kingdom, it became the “first company affiliated with a fantasy sports operator to be registered as a Futures Commission Merchant (FCM) by the National Futures Association,” according to a release.
Translation: Through a new vertical, or in collaboration with an existing prediction market, PrizePicks customers will be able to buy and sell futures contracts offered by Designated Contract Markets (DCMs) that are regulated by the Commodity Futures Trading Commission (CFTC).
According to the NFA website, the new venture would do business as “PrizePicks Predict.”
“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 release. “Acting Chairman Caroline Pham’s vision for the CFTC promotes innovation while reinforcing the importance of strong regulatory standards. Her leadership has set a thoughtful tone for the agency and our industry.”
DraftKings, Fanatics Betting & Gaming, and Underdog currently have pending applications with the NFA. PrizePicks’ application had been pending since May 28.
DFS app Sleeper also has a pending application with the NFA, but the process has apparently become contentious. Lawyers representing the company, in a letter to the Office of the Inspector General, last week accused the CFTC of illegally “refusing to approve” the application.
Moving, shaking, preparing
PrizePicks’ move puts it squarely in the latest gambling industry repositioning in response to an emergent vertical.
The Kalshi exchange’s on-going legal campaign to offer, in effect, national sports betting under the federal purview of the CFTC has prompted companies offering state-regulated sports betting or DFS to prepare for what could become a massive disruption of their business models.
FanDuel has partnered with CFTC-registered derivatives marketplace CME to eventually launch a predictions platform. DraftKings has reportedly been in talks to purchase Railbird. Polymarket bought entry back into the U.S. market by purchasing CFTC-certified QCEX and is poised to relaunch.
Now what, PrizePicks?
PrizePicks Chief Legal Officer and Head of Policy Jason Barclay called the NFA designation a “defining moment” for the Atlanta-based company.
Launched by Adam Wexler and Jay Deuskar in 2015, PrizePicks was among a wave of DFS and DFS+ platforms traversing the salad of vague gambling laws in the U.S. when contemporaries like DraftKings and FanDuel pivoted to include sports betting.
PrizePicks has offered its “pick ’em” against-the-house-style games in more than 30 states, but retrenched to emphasize peer-to-peer as numerous state attorneys general issued cease-and-desist letters to it and similar sites like Betr.
Allwyn’s deal to acquire an initial 62.3% of PrizePicks values the company at $2.5 billion. Allwyn will pay an initial $1.6 billion in a deal set to close in 2026.
According to a release, the remainder of PrizePicks will remain under the control of the company’s current leadership, Ybarra, who will maintain his position as chief executive officer.
