DraftKings has gained approval from the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) to function as an introducing broker (IB), putting it one step closer to creating its own prediction market platform.
The NFA website revealed that DraftKings’ IB application, filed under the name Gus III LLC, had been approved.
In the world of CFTC-registered event contracts, an IB provides customers with access to contracts issued by a designated contract market (DCM). An IB does not formally handle customer funds, however this is not always apparent to the end user.
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A representative told InGame, “DraftKings has been approved as a registered Introducing Broker with the U.S. Commodity Futures Trading Commission and a Member of the National Futures Association under its wholly-owned subsidiary Gus III LLC (d/b/a DraftKings Predictions).” “This registration supports the impending launch of DraftKings Predictions and is a significant step in the company’s federally regulated activities.
“We value the NFA’s diligence in the process and are still dedicated to conducting business ethically, openly, and in complete accordance with federal regulation.”
DraftKings declared in November that it would introduce its prediction market, which includes contracts for sporting events, “in many states” during the “coming months.”
DCM is already owned by DraftKings.
Railbird, which has not yet debuted but was authorized as a DCM earlier this year, is owned by DraftKings. Railbird has the same contracting authority as Kalshi because it is a DCM. In October, it purchased the exchange. Because of this, the business might have been allowed to operate without an IB clearance, but the approval might provide it more alternatives for how it can sell those contracts to clients.
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