Daily fantasy sports operator PrizePicks will offer its customers access to Polymarket’s sports event contracts when the prediction market relaunches in the U.S.
The deal — announced via press release Tuesday — comes after PrizePicks received approval from the National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC) to be a futures commission merchant (FCM).
An FCM is allowed to offer its users access to contracts created by a CFTC-registered exchange. Currently the most prominent FCM in prediction markets is Robinhood, which offers its users access to Kalshi’s contracts, and makes up about half of Kalshi’s volume.
PrizePicks said the deal would give its customers access to “a wide range of sports, entertainment, and cultural moments.”
“As the No. 1 daily fantasy sports operator in the U.S., PrizePicks is thrilled to partner with Polymarket, a trailblazer in the prediction space, to open up new experiences for our millions of existing members and introduce our platform to millions of new customers,” PrizePicks CEO Mike Ybarra said in a statement.
Polymarket could relaunch in US soon
The partnership comes as Polymarket prepares to reenter the U.S. market. Polymarket currently blocks all customers from outside the U.S. on its global site, but it acquired a CFTC-registered exchange in July and has set to work on launching a separate U.S. offering.
As reported by InGame last month, the exchange has not been able to launch new contracts on its CFTC-registered site, effectively making it unable to operate, until the federal government resumes activity, as self-certifications are not being processed. However, with the shutdown seemingly nearing a close, Polymarket’s reentry could be coming soon.
Tuesday’s press release described Polymarket’s U.S. offering as “soon-to-launch.”
“By entering the U.S. predictions market, PrizePicks will create greater competition, drive innovation, and deliver even more value directly to members,” Ybarra said. “Together with Polymarket, we’ll continue to focus on product, innovation, and exceeding our customers’ expectations.”
Shayne Coplan, founder and CEO of Polymarket, said he was excited about the prospect of partnering with a daily fantasy company like PrizePicks.
“PrizePicks has built one of the nation’s most exciting sports communities, and we are excited to help bring prediction markets into that world,” Coplan said. “As we prepare to return to the U.S., this partnership shows how prediction markets can enhance fandom while setting a new standard for interactive, regulated sports engagement.”
Polymarket last week revealed its fee structure for its U.S. site, significantly undercutting Kalshi’s fees, in a sign that it is getting closer to launch.
Following Underdog into prediction markets
PrizePicks will be the second major daily fantasy sports company to get into prediction markets, after its main rival Underdog did so in September, via a deal with Crypto.com. Unlike PrizePicks, however, Underdog is not a CFTC-registered FCM, and instead acts as a “technical service provider” to Crypto.com.
The PrizePicks press release noted that it was “the first and only sports entertainment operator to be registered as a Futures Commission Merchant.”
Sleeper also has an active application for NFA membership, a step toward FCM status. However, in September it filed a lawsuit against the CFTC, arguing that the regulator had acted unlawfully by stepping in on the NFA’s approval process and holding up its application.
Sleeper claims that the CFTC did so due to “unspecified concerns” about the exchange that it planned to partner with, which has not been named.
Last week, sports betting giant DraftKings revealed that it planned to offer sports event contracts “in the coming months.”
Gaming regulators have generally opposed the rise of sports event contracts across the U.S., arguing that they are illegal gambling. Regulators in Arizona, Ohio, Illinois, New York, and Michigan have warned licensees about getting involved with prediction markets, even telling operators that engagement with the product in another state or partnering with a company that offers them in another state could make a company unsuitable for licenses.
Last month, PrizePicks received a fantasy sports license in New York. It is also licensed in Arizona.
Allwyn bought majority stake in September
The partnership comes less than two months after European lottery giant Allwyn — which runs lotteries in the U.K., the Czech Republic, and Illinois — bought a majority stake in PrizePicks. Allwyn will pay an initial $1.6 billion for a 62.3% stake in PrizePicks, valuing its full business at $2.5 billion.
The deal also includes conditional payments based on whether PrizePicks meets “certain performance metrics.” Those metrics were not disclosed, but the extra payments would be up to $1 billion, which would put the total payment at $2.6 billion for 62.3% of PrizePicks.
