Why We’re Doubling Down on Real Money Gaming
07-14-2025
Inside the Fastest-Growing Corner of Digital Entertainment
At Drive by DraftKings, Real Money Gaming (RMG) is a space where we’ve built strong conviction. Our strategic platform gives us a front-row seat not just to where the market is, but where it’s going.
Once narrowly defined as online sportsbook or casino gaming, RMG has evolved into a broad and ever-expanding sector of the entertainment industry. Fantasy sports and DFS, skill-based contests, prediction markets, crypto-enabled platforms, sweepstakes, and creator-led cash games all fall under the umbrella we now call RMG.
Why? Because across categories, the user experience converges around a familiar loop: Play, Payout, Repeat.
The category already exceeds $100 billion in global gross gaming revenue1 and is tracking toward $150 billion by 2030, growing more than 10% annually. But size alone isn’t the story. The real action lies in the pace of change, fueled by three converging forces:
1. Technology: Building the Real-Money Rails
Today’s consumer expects entertainment that’s mobile-first, snackable, and high-quality. RMG fits that mold perfectly, but for years, the infrastructure lagged behind.
That began to change with the repeal of PASPA in 2018, which triggered a wave of innovation in licensed sports betting and iGaming.
Seven years later, the gaps are closing fast:
The rails are now in. The next wave - RMG 2.0 - will be led by founders reimagining how risk can enhance entertainment.
2. U.S. Regulation: A Mix of Mature and Moving Targets
Over the past five years, the U.S. gambling map has shifted dramatically, with 30 states (and DC) now permitting online sports betting and seven allowing some form of iGaming.
This creates a sizable market, with long-term upside if states like California or Texas come online. But regulation is not static. Tax increases and new restrictions are becoming more common. Operators must treat “legal” as a moving target, not a fixed destination.
DFS-style contests and sweepstakes face new scrutiny, but rapid adoption shows that demand for low-friction real money experiences remains strong.
By contrast, skill-based games operate with fewer regulatory hurdles. Outside a handful of fantasy-licensing states, they can launch with a favorable legal opinion and iterate quickly. Free from heavy tax burdens, these businesses often operate with significant gross margins - a profile not possible in licensed gambling.
Prediction markets are also gaining momentum. More than $3B in total volume was wagered on the 2024 U.S. presidential election. These platforms move house risk to players, blending sports, finance, and culture in a tradable format. Regulated by the CFTC, they still face jurisdictional questions from state gaming commissions, but they have the potential to unlock new liquidity and capital for the industry.
The lesson across all sub-verticals: regulatory complexity creates opportunity if compliance is baked into product and strategy from day one.
3. Social and Cultural Normalization: Blurring Play and Payout
Thanks to infrastructure and regulation, RMG is now fully mainstream. What was once niche or taboo is now integrated into daily media, sports coverage, and social feeds.
Play and payout are no longer distinct. Whether it’s staking $5 on a Fortnite killstreak or playing Doodle Jump for dollars, the line between gamer and gambler continues to blur.
Meanwhile, RMG has become part of the core sports experience. Odds, lines, and sponsor content are now standard in pregame, live, and postgame broadcasts - changing how fans engage with every moment.
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.
Why This Matters for Venture
The U.S. online gambling market has grown faster than almost anyone predicted. It is now nearly twice the size projected back in 2018, driven by the accelerating convergence of technology, regulation, and cultural normalization.
In Fund I, we backed B2C leaders like Papaya, Picklebet, and Triumph. They are early movers who built strong product-market fit while aligning with evolving compliance frameworks and cultural trends.
With Fund II, we’re doubling down.
Our focus:
The stakes are real and so is the opportunity. If you’re building at the frontier of real money gaming, we’d love to hear from you.
1Includes legal and illegal online gambling, fantasy sports, skill gaming, sweepstakes, and prediction markets.
