PrizePicks Secures New Prediction Market Deal With Kalshi
Another day, another PrizePicks prediction market transaction. This time, it's with Kalshi, the US leader in the volume of event contracts.
The prediction markets behemoth and the daily fantasy sports (DFS) company announced on Friday that they are engaging into a "multi-year partnership" and that Kalshi yes/no derivatives are now available on the PrizePicks mobile application. The relationship's financial details were kept a secret. Only three days had passed before PrizePicks and Polymarket, a rival of Kalshi, announced a similar agreement.
"Customers on PrizePicks are now able to make predictions on outcomes across sports, entertainment, and pop culture directly within the PrizePicks app through Kalshi’s extensive library of event contracts. All event contracts listed on PrizePicks are Kalshi markets,” according to a statement.
The announcement is consistent with August speculations that Atlanta-based PrizePicks was searching for ways to enter the prediction markets. These rumors intensified after the company was granted Futures Commission Merchant (FCM) status by the National Futures Association (NFA). Because of this certification, it is able to sell derivatives that are governed by the Commodities Futures Trading Commission (CFTC), which is in charge of regulating businesses like Kalshi and Polymarket.
Deal May Be Important for PrizePicks and Kalshi
PrizePicks may benefit from the agreements with Kalshi and Polymarket since they signify the company's continued development. Prior to switching to the more regulatory-friendly player vs. player (PVP) model, the operator was an anti-the-house DFS operator.
In the majority of DFS games, players construct lineups or wager on the stats of athletes, including hits, passing yards, or points. In other words, traditional DFS games—including those that PrizePicks has been offering for a long time—often focus on individual players rather than teams. PrizePicks now gives customers access to team-driven results through its collaboration with Kalshi.
“Team Picks introduces a new way to predict, giving customers the ability to pick the winner of a game, fight, match, and more,” according to the press release. “For the first time on PrizePicks, customers can experience the excitement of predicting team outcomes, from individual matchups to season-long futures like win totals, playoff chances, and championship winners.”
Additionally, this is the first time PrizePicks will expose its customers to anything other than sports. That may be relevant because, according to volume, only four of the top 12 open contracts on Kalshi as of right now were sports derivatives.
The PrizePicks partnership might benefit Kalshi in a number of ways. As DraftKings and FanDuel launch their prediction markets, the prediction markets operator adds a new distribution partner with sports-focused skills.
What Distinguishes Polymarket and Kalshi Deals?
The fact that Kalshi is currently operational seems to be the primary distinction between PrizePicks' agreements with Polymarket and Kalshi. The government shutdown caused a delay in Polymarket's re-entry into the US, but the firm is beta testing in this market, has a queue, and plans to launch its US platform by the end of November.
