- A PrizePicks subsidiary recently received approval as a National Futures Association
- The company is now an approved Futures commission merchant
- It can now enter the predictions market
It’s been quite a week so far for PrizePicks, one of the largest daily fantasy sports companies in the U.S. On the same day the company announced a new majority stakeholder, it also received approval as a futures commission merchant and can now potentially enter the predictions market.
PrizePicks subsidiary Performance Prediction II LLC received National Futures Association (NFA) approval late Monday, and is now registered as a Futures Commission Merchant. PrizePicks is the first to receive NFA approval out of a group of gaming company applicants that includes Underdog, DraftKings, and Fanatics Betting and Gaming.
“The honor of being the first sports entertainment platform to receive a FCM registration from the NFA is a testament to our industry-leading compliance and consumer protection programs that both the NFA and CFTC demand,” said Mike Ybarra, CEO of PrizePicks. “Acting Chairman Caroline Pham’s vision for the CFTC promotes innovation while reinforcing the importance of strong regulatory standards. Her leadership has set a thoughtful tone for the agency and our industry.”
Next step predictions market
The designation allows PrizePicks to accept orders from it members to buy and sell futures contracts offered by designated contract markets that are regulated by the Commodity Futures Trading Commission.
PrizePicks will continue its collaboration with the CFTC and NFA to providing secure predictions experiences for its customers. The company can now work with a company such as Robinhood or Kalshi to offer prediction markets to users.
“As the nation’s leader in predictions, this is a defining moment for us. We are grateful to the NFA for its thoughtful process and diligent work on our application,” Jason Barclay, Chief Legal Officer and Head of Public Policy for PrizePicks, said.
Ybarra, and several other PrizePicks C-suite executives including Chief Financial Officer Marcus Edward Sanford, submitted a Performance Predictions II LLC application for NFA member approval this past May.
Big week for PrizePicks
The NFA approval came on the same day Allwyn announced it will acquire a 62.3% stake of PrizePicks for an expected initial price of $1.6 billion. Based on the $1.6 billion price tag for the majority stake in the company, PrizePicks has an implied upfront enterprise value of $2.5 billion.
The implied valuation could rise to $4.15 billion over the next three years if PrizePicks meets certain performance metrics.
“Today marks the start of an exciting new chapter for PrizePicks and our growing community of players. There has never been a more electrifying time to shape the future of fan-first entertainment. By joining forces with Allwyn, a like-minded and disruptive company that shares our passion for bold product innovation, we will accelerate our mission to make our games more interactive, engaging and rewarding for fans everywhere,” Ybarra said.
Robert is an expert on sports betting in the United States, specifically the legalization process and regulation surrounding the industry.
