PrizePicks Gains CFTC Approval as Futures Commission Merchant, Plans Expansion into Prediction Markets

PrizePicks Receives Regulatory Green Light to Enter Prediction Markets

PrizePicks, a daily fantasy sports operator serving North America, has achieved a major regulatory milestone that positions it to explore the prediction markets sector. This development follows closely on the heels of Czech lottery giant Allwyn’s recent move to acquire a controlling interest in the company.

New Futures Commission Merchant Status Enables Growth

PrizePicks secured approval from the Commodity Futures Trading Commission (CFTC) to operate as a futures commission merchant (FCM). This registration permits the launch of a new prediction markets platform managed by PrizePicks.

The approval was granted to PrizePicks’ subsidiary, SidePrize, which has also attained membership in the National Futures Association (NFA). This step reflects the rising popularity and expansion of prediction markets, as more players are drawn to these innovative platforms.

According to regulatory filings, the planned prediction markets platform will be named PrizePicks Predicts. While this CFTC approval represents an initial stage, it clearly signals the company’s intent to tap into a high-growth vertical and extend its presence within the U.S. market.

Mike Ybarra, CEO of PrizePicks, noted that theirs is the first sports entertainment platform to receive FCM registration from the NFA. He emphasized that this achievement highlights the company’s commitment to rigorous compliance standards and robust consumer protections.

Allwyn’s Acquisition to Boost U.S. Expansion Strategy

This regulatory advancement coincides with Allwyn’s recent announcement to acquire a 62.3% majority stake in PrizePicks. The deal entails an initial cash payment of $1.6 billion, with the possibility of an additional $1 billion contingent upon the company’s future performance over three years. The acquisition is expected to be finalized in the first half of 2025.

Under Allwyn’s ownership, PrizePicks will continue operating as an independent brand. However, the takeover will enhance Allwyn’s footprint in the U.S. market and enable it to leverage emerging opportunities in North America. Given PrizePicks’ ambition to enter the prediction markets space, this investment could prove highly profitable.

Prediction markets have been experiencing swift growth, as evidenced by market leaders like Kalshi recently surpassing $1 billion in monthly trading volume, reflecting the sector’s expanding appeal and economic potential.