DraftKings Directs Record Volume to Proprietary DKeX Exchange Ahead of NFL Season

DraftKings for the first time sent serious volume to its in-house exchange DKeX last week, including millions in parlay volume. Total volume reached $10 million on Thursday and $13.4 million on Friday. Before last week, DKeX had never processed more than $1.5 million in a single day.

For the first time the DKeX volume included parlays, which the exchange self-certified last month. Parlay volume over four days hit $11.3 million. On Saturday for college football’s “Week 0,” volume fell back to $4 million as the company routed the vast majority of sports customers to Crypto.com.

DraftKings made $130,000 in DKeX fees Friday. In July, annualized total volume on DraftKings Predictions across all exchanges was $11 billion, suggesting volume within the month itself was just under $1 billion, or about $30 million per day. According to reporting by InGame, this performance is still short of what would occur if all sports trades were directed to DKeX for a day.

Routing Decisions Based on Real-Time Merit

DraftKings owns DraftKings Predictions, a futures commission merchant that can direct users to multiple exchanges, and DKeX itself. The company has moved slowly since the June launch of DKeX in directing customers away from Crypto.com. Mike Barber, DraftKings Head of Program Product, told InGame the company will choose which exchange to route customers toward based on what makes the most sense at the time.

“At the end of the day, we’re going to offer the best possible NFL offering at kickoff, and we’ll make the decision between the two exchanges for what that is,” he said. “We’re not necessarily just copying the competition.”

Regulatory Distinctions Within a Single App

Rather than promoting its prediction market and sportsbook separately, DraftKings has marketed around a single “super app” that includes its sportsbook offering in sportsbook states and sports event contracts where available. The aim is to make the betting and trading experiences feel similar so the product is never too different from state to state.

Barber said a user can travel across the country and experience the same sports offering, while the company adheres to all regulatory compliance requirements for sports betting versus trading depending on the state. The CFTC required prediction markets to stop displaying American-style odds, so DraftKings now shows percentages in non-sportsbook states.

The company is incorporating price graphs familiar to prediction market users into its sportsbook. “We’ve launched that now inside of the Super App, and when we launched it, it’s build once, deploy twice,” Barber said.

Reporting: InGame

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