DraftKings‘ expansion into the prediction market space will in part be powered by an unlikely partner: Polymarket.
The deal lies in the use of Polymarket’s own Derivatives Clearing Organization (DCO), Polymarket Clearing.
The arrangement, announced by Polymarket CEO Shayne Coplan, means that trades on DraftKings’ forthcoming DraftKings Predictions platform will be managed and financially settled by a key piece of infrastructure owned by Polymarket.
Congrats to @DraftKings on their acquisition of @RailbirdHQ.
We’re proud for Polymarket Clearing to be their designated clearinghouse as they enter the prediction market space.
— Shayne Coplan 🦅 (@shayne_coplan) October 22, 2025
What is a clearinghouse and what does this mean for DraftKings Predictions?
This back-office collaboration follows DraftKings’ acquisition of Railbird Exchange, a CFTC-registered Designated Contract Market (DCM), which positions DraftKings to offer regulated event contracts on real-world outcomes across categories like finance, culture, and entertainment.
Every DCM exchange requires a DCO, a clearinghouse that stands between all buyers and sellers, takes collateral up front, and pays winners when markets resolve. The clearinghouse basically acts as the bank/settler, becoming the financial backstop required for all exchanges regulated by the CFTC.
That role here is Polymarket Clearing, formerly QC Clearing, part of the QCEX package Polymarket purchased for $112 million in July, enabling Polymarket’s U.S. return via its own exchange entity.
Why the Polymarket, DraftKings/Railbird partnership makes sense
The partnership may raise eyebrows but is a win for both parties:
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- Plugging a new exchange into an existing registered DCO avoids the cost, time, and regulatory lift of building a clearinghouse from scratch. That expedites DraftKings’ entry as it aims to roll out DraftKings Predictions in the coming months.
- It’s very likely that markets on DraftKings Predictions will look much like those on Polymarket U.S. when it launches.
- For Polymarket, this creates new, reliable B2B revenue stream that diversifies their business beyond their own market volume — which, for now, is not bringing any revenue in as its primary exchange does not charge fees.
- This is speculative but it’s possible that shared, neutral clearing later paves the way for more concentrated liquidity across the two platforms. In fact, iGaming analyst Alfonso Straffon suggests it could open global possibilities for DraftKings:
Thinking out loud here (sort of)… but if states give DKNG too much crap about prediction markets in the US, perhaps this opens up a path for DKNG to go international leveraging Polymarket’s global footprint. What is to stop @DraftKings from making markets (or pricing those RFQ… https://t.co/p9lrlV89Yh
— Alfonso Straffon 🇨🇷🇺🇸🇲🇽 (@astraffon) October 22, 2025
For context, Kalshi initially cleared through LedgerX before launching its affiliate DCO Kalshi Klear last fall which let it ship user-facing features faster—most notably paying interest to users and more creative contracts/markets. That’s a good precedent for what a prediction market-aligned clearing layer can unlock, in addition to an expedited product launch.
By partnering with Polymarket Clearing, DraftKings gets a clearinghouse already tuned to meet the demands of prediction market users—positioning DraftKings Predictions to compete on speed of listings, settlements, and feature rollouts in the rapidly growing prediction market space.
