Drive By DraftKings Ready to ‘Double Down’ on Real-Money Gaming

Venture Capital firm Drive by DraftKings has announced its second fund will target real-money gaming (RMG). 

The group was founded in 2019 by leaders from DraftKings, General Catalyst, Boston Seed Capital, and Accomplice. Previously, it has backed companies in SportsTech, media, and human performance, but now plans to focus increasingly on RMG. 

In a blog post, the company stated that it plans to “double down” on RMG, which includes fantasy sports and DFS, skill-based contests, prediction markets, crypto-enabled platforms, sweepstakes, and creator-led cash games.

The industry is currently valued at $100 billion and is expected to grow to $150 billion by 2030, justifying the company’s investment strategy. 

Drive by DraftKings CEO Meredith McPherron commented in a post on LinkedIn, “Real Money Gaming is no longer a niche. It’s a $100B+ sector reshaping how we engage with entertainment, and we believe it’s just getting started.”

Technology, Regulation, and Normalization Fuel RMG Growth

The company blog post went on to add that it believes RMG provides a resilient source of investment due to technology advances, regulation changes allowing a diverse range of gambling options, and cultural normalization, making gambling more mainstream. 

In terms of technology, faster payment methods make it easier for users to deposit and withdraw funds. Gambling companies can also apply KYC checks and utilize geolocation to comply with different state regulations. 

States have also increasingly regulated gambling, with more than 30 states allowing online sports betting and seven states legalizing online casinos. 

New forms of gambling present both challenges and opportunities for companies like DraftKings. The platform’s stock has risen by over 23% this year as it explores new opportunities in prediction markets and crypto gambling. 

Its Q2 figures are set to be released this week, which will provide a clearer indication of whether the company is reaching profitability. 

Drive also noted that “the line between gamer and gambler continues to blur” with gamers able to stake real-money bets on games such as Fortnite and Doodle Jump. 

“This normalization expands the addressable audience. Even players historically monetized through free-to-play mechanics are now open to real-money experiences. Founders are leaning in, exploring how real money can reshape competitive entertainment.”

Additional Taxes & Regulatory Scrutiny Present New Hurdles for RMG

While Drive notes many positives for the future of RMG, potential difficulties are also identified, most notably tax increases and a crackdown on certain forms of gaming.

Illinois has most notably introduced a tax on every bet in the state, to which leading sportsbooks DraftKings, FanDuel, and Fanatics responded by adding a surcharge for users placing bets in the state. 

DFS has also faced increased legal scrutiny with California’s Attorney General declaring certain games illegal in the state. A host of states across the country have also introduced legislation banning sweepstakes casinos. 

Legal challenges to the expansion of prediction markets into sports have so far been unsuccessful, and companies such as Kalshi and Polymarket eye further expansion into RMG. 

DraftKings has responded to the ever-changing legal landscape by starting its own PAC, which will add to other lobby groups campaigning for further legalization rather than regulation and tax increases. 

Drive by DraftKings is not dissuaded by the challenges, however, and vows to double down on investment in the industry. The company statement concluded by noting: “The stakes are real and so is the opportunity.”