PrizePicks Sells $1.6B Stake, Launches Prediction Markets Business

Atlanta-based fantasy sports company PrizePicks is having its biggest week ever.

First, on Monday, it sold a majority stake to European lottery and gaming company Allwyn for $1.6 billion. On Tuesday, a PrizePicks subsidiary received regulatory approval to enter the controversial, but growing, prediction markets arena.

PrizePicks CEO Mike Ybarra tells Front Office Sports the company, founded in 2015 and most known for its daily fantasy sports offerings, is only just beginning to hit its stride.

“We believe we’re the next $40 billion company in the U.S.,” Ybarra says. “That’s our ambition.”

Allwyn is acquiring a 62.3% stake for $1.6 billion. The deal values the company at $2.5 billion and gives Allwyn the option to invest more at a valuation of $4.15 billion, including debt, if PrizePicks hits performance targets over the next three years. 

Ybarra tells FOS there was no formal sale process, but once the company met with one potential suitor, the phone started ringing off the hook. 

“We weren’t saying ‘we are for sale,’ or that we wanted to be infused with investment,” he says. “But to do our job as board members, when the phone is ringing, you have to pick it up.”

Allwyn is a private company that operates national lotteries across Europe, but until now was only in the U.S. through its operation of the Illinois Lottery. It was looking for a real foothold in the country, which it found in PrizePicks. Ybarra says it wants to be the “worldwide leader in gaming.”

“I believe that, combined with us, there’s a better opportunity to achieve that,” he tells FOS. 

Ybarra is sensitive to the idea that big transactions like this often result in layoffs  as the new parent looks to streamline operations. But PrizePicks’ employees needn’t worry, he says.

“There will be no organizational changes because of this,” he says. “I didn’t want people to think ‘wow, am I going to lose my job because of this?’ The answer is absolutely not. We are going to continue to grow.”

Andrew Steinberg, founder of investment firm Phoenix Capital Ventures, called the deal a “milestone achievement” for PrizePicks, which was the first investment PCV ever made.

Allwyn is buying PrizePicks even as daily fantasy sports products face scrutiny in states including Arizona, Iowa, Hawaii, and, most recently, California. In July, California attorney general Rob Bonta issued an opinion stating daily fantasy sports are considered illegal sports betting under state law. The same day, a group of consumer protection law firms filed four separate proposed class actions against PrizePicks, FanDuel, DraftKings, and Underdog.

“What we do is legal,” Ybarra tells FOS. “We do not operate in states where we feel something is illegal.”

As far as regulatory pushback in states like California, he says “welcome to the gaming business in the U.S.”

PrizePicks is also entering another controversial area: prediction markets. On Tuesday, it said its subsidiary Performance Predictions II LLC became the first fantasy sports–affiliated company approved to offer futures event contracts,either independently or in partnership with existing platforms such as Kalshi or Polymarket.

Sports event contracts—which allow users to “trade” on the outcome of events such as which team will win a given NFL game or whether a certain player will score a touchdown—have garnered controversy because they appear so similar to sports betting. Traditional sportsbooks are regulated state by state, while prediction market platforms like Kalshi are federally regulated by the Commodity Futures Trading Commission, and have therefore been operating in states where sports betting is illegal, like Texas and California. 

“We’re not going to ignore prediction markets, it’s too big of a topic in the industry,” Ybarra tells FOS.