PrizePicks has gained approval from the Commodity Futures Trading Commission (CFTC), which enables the platform to expand its product offerings, including esports, into prediction markets.
The DFS operator, which offers a wide range of fantasy esports markets, has been granted status as a Futures Contract Merchant (FCM).
As an FCM, the company may partner with a prediction market platform, such as Kalshi or Crypto.com, to offer event contracts.
The CFTC has granted PrizePicks prediction market approval. Image Credit: Austin Hervias/Unsplash
Robinhood has the same status, which allows the app to offer users the ability to trade through Kalshi’s markets.
Kalshi also offers some esports markets, but as a DFS operator, PrizePicks has a wider range. Collaborating with an established prediction market platform could provide users with increased trading opportunities.
There has been no news as yet of which company may partner with PrizePicks. The move into prediction markets follows fellow DFS operator Underdog partnering with Crypto.com.
Underdog is not licensed by the CFTC, but uses Crypto.com’s license to combine its markets with fantasy predictions.
Allwyn Takes Control Of PrizePicks
The approval comes after Allwyn announced it will take a controlling stake in PrizePicks. The Czech-based company has acquired a 63.1% stake for an initial $1.6 billion. This may rise depending on the company’s performance over the next few years.
In a press release, Adam Wexler, PrizePicks Founder, said: “From day one, we set out to create a more accessible style of fantasy sports that could appeal to casual players.
“As the industry evolved, PrizePicks was the first to go all-in on the simplest prediction model and take it to scale, reshaping how fans engage with fantasy sports. Now, with Allwyn’s backing, we’ll accelerate our vision and bring our games to even more players on a much bigger stage.”
Allwyn Expands Presence in the US
Allwyn has been expanding its presence in a range of gambling markets. The company took over the running of the National Lottery in the UK last year, as well as acquiring a controlling stake in Novibet.
Novibet is an online sports betting and gaming company that primarily operates in Europe and Latin America.
The acquisition of PrizePicks gives Allwyn the opportunity to grow in the US market. Robert Chvatal, Allwyn CEO, stated: “This is a significant European investment, and Allwyn’s biggest in the United States to date.
“PrizePicks is an entrepreneurial company that is empowering a new generation of fans who want to engage with their favourite sports and athletes, not just spectate. PrizePicks has created an intuitive platform that simplifies the process of making skilled predictions.”
Currently, esports fantasy players can make a range of predictions at PrizePicks, including kill counts in CS2, Valorant, Dota, and League of Legends.
Allwyn looks set to expand the platform’s offerings, with CFTC approval the first step.