DraftKings Faces Legal Battle Over Prediction Market in California

DraftKings launched its prediction market product, Predictions, in December. The product has now landed the company in a legal battle, as a class-action lawsuit in California accuses DraftKings of allowing illegal gambling through its platform. The lawsuit seeks injunctive relief and financial damages from DraftKings.

Plaintiff Ricardo Andrio and other California residents allege they lost money using the DraftKings Predictions platform. They claim they would not have used the platform had they known it was illegal. The lawsuit follows extensive marketing by DraftKings in states with large populations but without legal sports betting, including California, Texas, Georgia, and Florida.

Tribal gaming groups in California are concerned about prediction markets taking market share from them. Three tribal gaming groups are battling Kalshi and Polymarket in court over prediction markets. California Nations Indian Gaming Association Chairman James Siva stated that tribes are unified in opposing prediction markets in the state.