DraftKings could soon be rolling out parlays on its in-house prediction market exchange DKeX rather than sending the trades to Crypto.com, as it self-certified a “combos” contract Friday.
The filing submitted to the Commodity Futures Trading Commission (CFTC) covers a contract titled “Will all [outcomes] occur?” It settles based on “the joint outcome of two or more constituent contracts,” using their rules.
DraftKings offers prediction markets through DraftKings Predictions, which is registered as a futures commission merchant (FCM), allowing it to offer its customers access to contracts on multiple exchanges. Those exchanges include DKeX, which DraftKings purchased last year, when it was named Railbird.
DKeX launched in late June, but DraftKings has taken a slow approach so far when it comes to directing customers to the exchange. Though DraftKings Predictions processed around $30 million per day in total volume in July, volume on DKeX is still typically below $1 million per day. Most volume from DraftKings Predictions, including parlays, goes through Crypto.com at the moment.
Although several new exchanges have come to market in the past year, few have offered parlays at scale. In particular, other companies that own both an FCM and an exchange, like DraftKings, have so far sent most parlay volume to exchanges with more established parlay infrastructure.
Robinhood’s exchange Rothera does not yet offer parlays, while Underdog began offering parlays on its in-house exchange beyond small testing volume on Aug. 5. Its parlay volume on Aug. 7, the most recent day for which data is available, was $1.2 million.
Parlays already big part of DraftKings Predictions volume
The self-certification comes as DraftKings plans to lean into prediction markets following a better-than-expected early performance.
“Our confidence in our ability to win in predictions has only grown,” CEO Jason Robins said on Friday’s earnings call discussing the company’s second-quarter results.
Robins added that “more than half” of DraftKings Predictions customers have used combos, and that the product is approaching 20% of “consumer volume” at DraftKings Predictions. Consumer volume is volume from the taker-side only, stripping out market makers. Unlike total volume, consumer volume for parlays is not inflated, as only the taker side — which tends to be much smaller on parlays — is counted.
For comparison, parlays are typically between 10% and 15% of consumer volume at Kalshi, despite being upward of 30% of total volume.
