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DraftKings chief executive Jason Robins says the company’s in-house exchange, DKeX, has become the third-largest prediction market operator in the US just a few months after launch. “We only launched the DraftKings exchange a few months ago, and we’re already the clear No. 3,” Robins said at New York’s NEXTPredict Summit on Thursday, in a Q&A hosted by CNBC’s Contessa Brewer, .
DKeX went live in late June 2026. According to Aldrin Research figures cited in the report, the exchange was third by notional trading volume for the week to October 18, handling $1.04 billion in trades for a 3.57% share of the market. That was up from a 2.33% share in the week ending September 26. Kalshi remains well ahead in first place, with Polymarket a distant second. Notional volume measures potential contract payouts rather than cash committed, a distinction covered in this .
A smaller footprint by design
Robins stressed that DraftKings reached that position with fewer markets than its rivals. “We’ve done that with a much more limited state footprint,” he said.
DraftKings Predictions is available in 38 states, but the full range of event contracts is offered in only 18 of them, including California, Florida and Texas. Where DraftKings operates a licensed sportsbook, including Colorado, New York and Pennsylvania, the product is limited to financial event contracts. Robins said the company avoids offering sports contracts in places where it also takes traditional sports wagers. In Nevada, it offers only free-to-play sports contests.
He acknowledged that the exchange would be more prominent if sports contracts were available in New York, but said that route carried too much regulatory risk. “The alternative was we would have had our licenses under threat,” Robins said.
Uncertainty weighs on the stock
The legal status of sports event contracts is still being fought in the courts, with the issue moving toward the US Supreme Court. Robins argued that DraftKings is positioned to benefit whatever the outcome, and that expansion beyond sports, for example into financial contracts, could support the business even if sports contracts are curtailed.
Investors have been less patient. The company’s stock is down more than 40% so far this year, and Robins linked that caution to the unsettled rules around federally regulated exchanges. “Private markets love uncertainty,” he said. “Public markets are the opposite. They do not like uncertainty.”
Responsible gambling questions
Robins also addressed recent criticism of how DraftKings uses artificial intelligence and handles responsible gambling. He said the company does not target problem gamblers and that customers identified as at risk are passed to a dedicated team. “It’s just completely not how we’re built,” he said. The comments come as regulators in several states examine the company’s marketing, including in Louisiana, where DraftKings is operating under a .
He said little about the Seminole Tribe’s lawsuit against DraftKings in Florida, beyond noting that he found it interesting the company had been singled out when other prediction markets also operate in the state.
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The Commodity Futures Trading Commission has told prediction-market operators Novig and ProphetX not to list a set of sports event contracts the two companies had already self-certified, according to . The agency also asked both firms to explain how the markets would comply with federal commodities law.
A CFTC spokesperson confirmed that letters had been sent to both companies. “Any derivatives contract offered by a CFTC-regulated exchange must be compliant with the Commodity Exchange Act,” the spokesperson said.
Micro contracts and scorigami
The two letters target different products. Novig was told that its micro contracts, such as a market on which player opens the scoring in a basketball game, are open to manipulation. ProphetX was told that its scorigami contracts, which settle on whether a game finishes with a scoreline that has never occurred in that sport, do not meet the Commodity Exchange Act’s definition of a swap.
Sources told Front Office Sports that the letters describe the filings as false self-certifications, the term used when an exchange certifies a contract that may not be permitted under the statute. Neither set of contracts had been listed, so no customer has traded on them.
ProphetX framed the request more narrowly. A company spokesperson said CFTC staff “requested that we voluntarily defer listing the Scorigami contracts pending further review, not that we withdraw them.” The company said it complied, has since supplied further analysis on the contracts’ compliance and economic utility, and remains in contact with agency staff. Novig did not immediately respond to a request for comment, the outlet reported.
A signal to the wider market
Under the current framework, exchanges can self-certify and list new contracts without prior approval, and the CFTC can step in afterward. The agency would not say if it has ever before told an operator to hold back a self-certified sports contract. One source described the letters as “kind of a warning shot” for the sector.
The move does not appear to be limited to two companies. Senior CFTC officials have also spoken with DraftKings and FanDuel and cautioned that listing micro contracts could bring the same response, according to the report. Other exchanges have voiced frustration with the agency’s stance, pointing out that many state regulators allow comparable in-game wagers at licensed sportsbooks.
The letters follow a separate round of CFTC inquiries last month into incentive programs at Kalshi, Polymarket, Rothera and Novig. They also come ahead of a final rule the agency is expected to issue after its June proposal, a 267-page notice that would restrict in-game props and limit markets on high school sports. The proposal sits inside a wider dispute over , with several states arguing those products should fall under gambling law.
Leagues have pushed for limits
One source said the Novig and ProphetX markets were exactly the type of event contracts professional leagues have objected to most. On October 19, the NBA tightened the rules on player props and micro bets for its sportsbook partners, among them markets on who scores a game’s first basket, . Those league rules cover traditional sportsbooks, not prediction markets.
It is not clear what the CFTC would do if either company went ahead and listed the contracts. Both firms have the chance to make their case to the agency, and the outcome is likely to shape how far other exchanges push into single-play sports markets before the final rule lands. Sports already account for most of the activity on the largest platforms, as shown in recent data on .
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The Louisiana Gaming Control Board has unanimously granted DraftKings a conditional four-month license extension while it examines the company's use of artificial intelligence in customer practices and delays a decision on full renewal. DraftKings can continue operating in the state under the interim arrangement.
The company's existing Louisiana license expires November 10, 2026. The board has scheduled a renewal hearing for February 18, 2027, with a final decision expected afterward; the conditional extension is set to keep DraftKings authorized through February 19.
The Louisiana Gaming Control Board's review follows a New York Times report alleging that DraftKings used AI to direct promotions and bonus inducements toward customers considered more likely to bet more. The reported practice was referred to internally as "elasticity." The allegations are part of a broader .
There is also a separate ownership issue. The Louisiana State Police Gaming Enforcement Division found information indicating that some DraftKings shareholders with stakes of 5% or more had not completed customary suitability reviews. Assistant Attorney General Houston told the board the investigation was incomplete and that regulators needed additional time to examine the allegations and shareholder question.
The board has not found evidence that DraftKings violated a licensing or moral obligation. Its decision leaves both matters under review while the company operates under conditional authorization.
DraftKings disputes the reported AI use
DraftKings President of Operations and cofounder Paul Liberman appeared before the board to address the concerns. He denied that the company used AI in the manner described in the reporting or used the technology to harm consumers. Liberman also said DraftKings keeps records showing whether customers are winning or losing.
Legal Sports Report reported that the conditional renewal includes deadlines for DraftKings to provide shareholder suitability materials and written responses about AI use, prediction-market activity, digital offerings to Louisiana residents, and other regulatory questions. The company must also review and certify its marketing materials, commercials and digital ads for responsible-gambling compliance.
The conditions require a senior company representative to handle communications with the board within seven days. DraftKings must submit several materials within 30 days and provide monthly compliance reports covering areas such as new digital products, promotions, responsible-gambling systems, customer complaints and unresolved compliance issues.
Board Chairman Chris Hebert described the conditional approval as a way for regulators to complete their oversight and give DraftKings an opportunity to respond. The board's action is not a finding that the company engaged in wrongdoing.
February hearing will set the next decision point
DraftKings will remain authorized to operate while state investigators continue their work and the company responds to the board's conditions. The February 18 hearing is the next scheduled step toward a full license decision, with the extension running through the following day.
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New Jersey's online casinos posted the third-highest monthly win in the state's history in September 2026 and again beat Atlantic City's casino floors. With sportsbook revenue shrinking by double digits, online play is now carrying the state's gaming growth.
New Jersey’s online casinos won $274.8 million in September 2026, up 13.0% from a year earlier, the Division of Gaming Enforcement reported. That beat the $227.8 million won by Atlantic City’s nine casino hotels.
The online figure trailed two earlier months this year. Only July, at $276.9 million, and May, at $276.3 million, came in higher. July rose 12.0% and May rose 11.9%.
The result reversed the order seen a month earlier. In August, online casino win grew only 4.4% to $259.3 million. Atlantic City’s casinos still won more that month, taking $294.9 million despite a 5.5% drop.
Atlantic City floors stumble while online growth holds up
The slump on the casino floors came after a stronger summer. Stockton University gaming analyst Brian Tyrrell said the land-based casinos went from a strong May-to-July run to “one of the worst Septembers in recent history.”
Online play moved the other way. The year-on-year comparison is like-for-like on tax. New Jersey raised its gross revenue tax rate on internet gaming from 15% to 19.75% on July 1, 2025. Last September was therefore already taxed at the higher rate.
The state collected $82.7 million in gross revenue taxes from gaming in September. That brought the year-to-date total to $756.8 million. Total gaming revenue for the first nine months of 2026 reached $5.39 billion, 5.1% more than the $5.13 billion recorded over the same stretch of 2025.
Market share is also moving among online operators. BetFanatics’ win jumped 187% to $14.7 million in September.
Sports betting slides as prediction markets draw scrutiny
Sportsbooks had a much weaker month than online casinos. The calendar played a part, with one fewer football weekend this September. Tyrrell suggested that prediction markets such as Kalshi and Polymarket may be pulling bets away from regulated sportsbooks. He added that this could cut state tax revenue.
The sports slowdown is not new. In August, the decline came mainly from a later start to some fall sports, including college football, compared with August 2025. A lower win percentage also weighed on that month.
The split matters beyond New Jersey. That gives lawmakers in states weighing online casino bills concrete figures on tax revenue and on how online play compares with land-based casinos.
Virginia is one of those states. Its House and Senate each passed online casino bills in 2026. The two chambers could not agree on a final version before the session ended on March 14. Virginia will have to try again next year.
Sources
- (New Jersey Office of Attorney General – Division of Gaming Enforcement)
- (New Jersey Division of Gaming Enforcement)
- (Las Vegas Review-Journal)
- (SBC Americas)
: Lowlova, , via Wikimedia Commons
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The NFL's Supreme Court brief said $1.8 billion of $3.3 billion in prediction-market trading on the 2026 season's opening Sunday was tied to the league. That figure reflects notional trading volume, which measures potential contract payouts rather than the cash traders paid.
What the $1.8 billion measures
USA TODAY tested the claim using trading data and contract details from Kalshi and Polymarket US. Its analysis found that NFL-related contracts made up 59% of the two exchanges' combined notional volume on Sept. 13, broadly consistent with the NFL's estimate.
Kalshi and Polymarket together represented about 88% of trading across nine exchanges tracked by DeFi Rate during the 30 days ending Oct. 14. Notional volume counts the total potential payouts associated with contracts traded; it is not a tally of the money participants put down. The distinction matters when comparing prediction-market figures with cash wagered in conventional sports betting. The different measures are explored in this .
On a cash-paid basis, the NFL's share was about half in Week 1, according to USA TODAY's analysis. That share increased to 60% by Oct. 11, while the NFL-related share of notional volume rose to 69%.
The figure sits inside a regulatory fight
The NFL included the $1.8 billion figure in an Oct. 8 Supreme Court brief supporting New Jersey regulators in a dispute over whether sports contracts on prediction markets should fall under state gambling laws. Kalshi argues that its contracts are subject to the CFTC's exclusive authority; some states treat them as sports betting subject to their gambling rules.
The size of the market also grew over the period USA TODAY examined. Combined notional volume on Kalshi and Polymarket US increased from $2.83 billion on Sept. 13 to $4.6 billion on Oct. 11, a rise of about 62%. The changing share of NFL-related trading therefore came alongside growth in the overall volume measured on those exchanges.
Combination trades and sportsbook competition
All-NFL combination trades were the fastest-growing category in USA TODAY's analysis, rising from 30% of relevant volume on Sept. 13 to 45% on Oct. 11. A combination bundles multiple outcomes into one ticket, and every selection must be correct for the participant to receive a payout.
Prediction markets are also drawing more sports activity and competition from established sportsbook operators. Sports accounted for 78% of Kalshi's trading volume and 82% of Polymarket's in July 2026, according to a Pew Research Center analysis of data from The Block cited by USA TODAY. DraftKings launched DraftKings Predictions in December 2025 and DKeX in June 2026, while FanDuel Predicts also launched in December 2025. Those products place sportsbook companies in a market where sports contracts are central to the volume being reported.
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