PrizePicks gains National Futures Association approval

Abi Bray

24 September 2025 at 6:39am UTC-4

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Daily fantasy sports operator PrizePicks has secured National Futures Association approval under its subsidiary, Performance Prediction II, allowing the company to enter the predictions market.

Having received approval late Monday, PrizePicks can now undertake customer orders for futures contracts offered by designated contract markets regulated by the Commodity Futures Trading Commission.

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PrizePicks Chief Executive Mike Ybarra said, “The honor of being the first sports entertainment platform to receive a Future Commission Merchant registration from the National Futures Association is a testament to our industry-leading compliance and consumer protection programs that both the National Futures Association and Commodity Futures Trading Commission demand.

“Acting Chairman Caroline Pham’s vision for the Commodity Futures Trading Commission promotes innovation while reinforcing the importance of strong regulatory standards. Her leadership has set a thoughtful tone for the agency and our industry.”

The company highlighted that it will continue collaborating with regulators while exploring partnerships with platforms like Robinhood or Kalshi to launch prediction markets.

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PrizePicks Chief Legal Officer Jason Barclay called the approval “a defining moment” and credited the National Future Association’s process.

PrizePicks was accredited first out of several gaming companies that applied to become registered as a Future Commission merchant, ahead of daily fantasy sports operator Underdog, DraftKings, and Fanatics Betting and Gaming.

The approval came on the same day Allwyn announced it had agreed to acquire a 62.3% stake in PrizePicks for US$1.6 billion, valuing the firm at US$2.5 billion.

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The Backstory

Inside PrizePicks’ pivot from daily fantasy to federally regulated prediction markets

From fantasy to futures

PrizePicks’ move to secure National Futures Association approval under its Performance Prediction II subsidiary marks a strategic turn from traditional daily fantasy sports toward federally regulated prediction markets. With the registration in hand, the company can now accept customer orders for futures contracts offered by designated contract markets overseen by the Commodity Futures Trading Commission, a step that positions the Atlanta-based operator to compete at the intersection of gaming and financial markets. The company framed the milestone as an industry first among sports entertainment platforms and said it was exploring tie-ups with brokerages and prediction exchanges, including potential partnerships with Robinhood and Kalshi.

The timing underscores a shift that has been building inside the company. PrizePicks has been expanding its national footprint and mainstream visibility, including a multi-year pact as the official daily fantasy sports partner of the Houston Astros, with prominent in-stadium branding and media integrations. But the Futures Commission Merchant approval signals a larger ambition: to distribute regulated event contracts to consumers under federal market rules rather than purely under state-by-state gaming regimes.

Capital is following that strategy. On the same day the approval was finalized, lottery giant Allwyn agreed to acquire a 62.3% stake in PrizePicks for $1.6 billion, valuing the company at $2.5 billion, according to the initial report on the NFA approval. The investment gives PrizePicks both institutional backing and a broader platform as it looks to bridge consumer entertainment with exchange-style trading.

Building a compliance moat

PrizePicks has been laying groundwork for a regulated future. The firm became the first daily fantasy operator to complete the National Council on Problem Gambling’s Internet Compliance Assessment Program, an independent audit of responsible gaming controls. The iCAP accreditation assessed culture, training, KYC procedures and consumer protections. The accreditation complements partnerships with behavioral health and harm-prevention groups, positioning the company to argue that consumer safeguards can travel with users as product lines evolve.

PrizePicks also fortified regulatory expertise by hiring former Massachusetts Gaming Commission general counsel Todd Grossman as director of gaming regulatory compliance. In that role, Grossman is charged with harmonizing multi-jurisdictional oversight and advancing licensure objectives across an “evolving regulatory landscape,” per the company’s announcement of his appointment. The compliance posture is central to PrizePicks’ pitch that federally regulated prediction products can coexist with state gaming frameworks without undermining consumer protections.

A shifting rulebook and emerging rivals

The broader backdrop is a regulatory environment in flux. Federally supervised prediction markets have gained traction even as states test legal boundaries. A federal court fight last year cleared a path for Kalshi to operate certain political event contracts after a showdown with the CFTC, while state officials in gaming hubs have pushed back. In Nevada, the state’s casino lobby is pressing to be heard in litigation over whether Kalshi’s federally regulated markets amount to unauthorized sports betting. A judge will decide whether to let the Nevada Resort Association intervene in Kalshi’s suit against the state regulator, according to court filings summarized here. The outcome could determine how state agencies assert jurisdiction over federally regulated event contracts that touch sports.

At the same time, crypto-native prediction venues are reentering the U.S. under the CFTC’s umbrella. Polymarket won a U.S. relaunch via a no-action letter after buying a derivatives exchange and clearing house, a pivot that lets it bring onshore some markets on sports and elections. As reported here, the decision has split opinion across finance and policy circles, with backers calling prediction markets a frontier for information discovery and critics warning they risk becoming “digital casinos.” These developments set competitive benchmarks for PrizePicks as it eyes partnerships and distribution inside federally regulated channels.

What this means for the market

The NFA approval gives PrizePicks a regulated pathway to offer event-driven contracts via CFTC-supervised exchanges while it continues operating fantasy sports in 46 states. In practice, that could let the company layer exchange access and order routing onto a sizable consumer base built through fantasy games and sports partnerships. It also may accelerate mainstream adoption by limiting frictions that have kept prediction products siloed — particularly KYC, payments and trust.

The stakes are high for incumbents across gaming and brokerage. If consumer-friendly apps can package event contracts with familiar UX, spectator sports and real-time data feeds, prediction markets could move from niche to mass-market. That prospect helps explain the rush to lock down compliance credentials and public-sector experience, from the iCAP designation to executive hires with licensing chops. It also explains why state regulators and casino operators are testing legal lines in court, wary of federally approved products siphoning engagement from state-licensed sportsbooks.

For now, PrizePicks’ next chapter hinges on execution: deepening exchange partnerships, proving consumer safeguards translate to futures-style products and navigating a bifurcated oversight system. The company’s recent approvals and investments suggest a bid to define the model for responsible growth in a sector where the rulebook is still being written.