DraftKings Predictions Faces Wave of Prediction Market Lawsuits

_{The blurry line between prediction markets and sports betting is affecting DraftKings with its latest product offering. (Photo: Maria Kraynova / Alamy)}

While DraftKings Predictions may be a newer player on the scene than big names in the prediction markets space like Kalshi and Polymarket, that hasn’t prevented the platform from being the target of lawsuits just like its better-known competitors.

A class action lawsuit filed in the U.S. District Court for the Central District of California on Aug. 13 alleges that DraftKings Predictions is simply a sports betting site operating in states where DraftKings lacks licensing to offer a sportsbook to customers.

Predictions ‘Indistinguishable’ from Sportsbook, Lawsuit Says

While DraftKings might dispute exactly how its efforts are framed in the suit, the general concept is correct. The online gambling giant has used its prediction market – available even in most states where DraftKings doesn’t hold a license to offer sports betting – in order to advertise that its products are now available in all 50 states, in one form or another.

The California lawsuit, brought by a man named Ricardo Andrio, seeks to represent residents of the state who bought sports event contracts on DraftKings Predictions and lost money after allegedly being misled about the nature and legality of the platform.

“DraftKings leverages its reputation as a licensed sportsbook by promoting Predictions to the same customer base and through the same platform, despite offering an unlicensed product that is, in substance, indistinguishable from sports betting,” the lawsuit states. “By operating an unlicensed sports betting platform, DraftKings has violated California gambling laws and unjustly enriched itself at the expense of consumers.”

This isn’t the first instance of a lawsuit being filed this summer against DraftKings Predictions, which launched in December 2025.

Summer of Lawsuits for DraftKings Predictions

On July 28, a proposed class action lawsuit was filed in a Massachusetts federal court, alleging that DraftKings misled consumers into believing its Predictions platform was “lawful and safe.” On Aug. 3, another potential class action was filed by three Massachusetts plaintiffs who say they lost money on DraftKings Predictions, and call the platform “an illegal, unlicensed sportsbook.”

Another lawsuit, filed on July 29 in a South Carolina state court, targets DraftKings along with competitors such as Polymarket and Crypto.com. That lawsuit notes that sports betting has been illegal in South Carolina since 1912, and cites the “Statute of Anne,” which allows third parties to sue for damages on behalf of other gamblers.

After those lawsuits, a DraftKings spokesperson told Front Office Sports that its prediction market followed applicable federal law and regulations under the Commodity Exchange Act.

“We remain confident in our legal position,” the spokesperson said.

That legal position will likely rely on the argument that the federal Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over prediction markets, and that the platforms are not sports betting operations subject to state-level gambling laws. That argument has been applied with mixed results in courts across the United States, with two federal courts recently siding with states seeking to enforce their online gambling laws against prediction markets.

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