DraftKings Emphasizes Role of Regulation Amid NBA Betting Scandal

The fallout from last week's revelations involving alleged illegal betting by several NBA figures continues to ripple across professional sports. DraftKings, the Boston-based leader in legalized sports wagering, framed the controversy as proof of the effectiveness of regulated betting systems in identifying suspicious behavior.

A DraftKings spokesperson said the company believes legal, regulated online betting provides the best safeguards for detecting irregularities and ensuring consumer protection. The statement noted that advanced monitoring tools and cooperation between the best sports betting sites, leagues, and law enforcement agencies make it far harder to conceal illicit activity within a legal framework.

“While regulation cannot eliminate all concerns related to game integrity, it significantly reduces risks by enabling collaboration between operators, leagues, teams, and relevant authorities to identify and hold accountable anyone engaged in illegal behavior,” said the DraftKings spokesperson. 

Investigators have not disclosed specific evidence, but some findings are thought to have originated from the same integrity-monitoring systems cited by DraftKings. Integrity firms such as IC360 and the International Betting Integrity Association continuously analyze data from operators like DraftKings.

Both alert sportsbooks to irregular wagering trends. Such alerts can trigger immediate market suspensions or bet removals when unusual activity occurs, such as a low-stakes bettor suddenly placing a large wager on a single in-game prop.

DraftKings employs around 5,000 people and generated $1.5 billion in second-quarter revenue this year. It is also an official NBA betting partner. The company said it remains committed to helping preserve public trust in game integrity by collaborating with the league and regulators.

DraftKings expands into prediction markets

That same trust in regulated oversight underpins DraftKings' latest strategic move. It completed its acquisition of Railbird, a federally licensed exchange supervised by the Commodity Futures Trading Commission (CFTC), last week.

The deal gives DraftKings a foothold in the emerging market for event-based prediction contracts, expanding from the sports betting and daily fantasy sports it already offers. Building on that acquisition, DraftKings plans to launch a new app, DraftKings Predictions, which will initially provide contracts in finance, culture, and entertainment. It hopes to join the ranks of the best prediction markets immediately.

“We are excited about the additional opportunity that prediction markets could represent for our business. We believe that Railbird’s team and platform—combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products—positions us to win in this incremental space,”  said Jason Robins, CEO and Co-Founder of DraftKings. 

The acquisition involved several legal and advisory firms, including Sullivan & Cromwell for DraftKings, Proskauer, and Moelis & Co. for Railbird.

“This is a transformational moment for our company, and we are thrilled to be a part of the future of DraftKings. DraftKings’ scale and leadership in the industry creates meaningful opportunities for our team and platform,” said Miles Saffran, CEO and Co-Founder of Railbird. 

The DraftKings Predictions app's launch is expected in the coming months.