DraftKings Inc ( DKNG ) shares are rising in extended trading on Tuesday after the company announced an acquisition to support its entry into prediction markets.

What To Know: DraftKings ( DKNG ) will acquire Railbird Technologies and its wholly owned subsidiary, Railbird Exchange, a federally licensed exchange designated by the Commodity Futures Trading Commission. 

The acquisition is expected to expand the company’s total addressable opportunity through regulated event contracts. DraftKings ( DKNG ) plans to launch a mobile app to allow customers to trade event contracts called DraftKings Predictions. The app will facilitate the trading of contracts on real-world outcomes across finance, culture and entertainment. 

“We are excited about the additional opportunity that prediction markets could represent for our business,” said Jason Robins, co-founder and CEO of DraftKings ( DKNG ).

“We believe that Railbird’s team and platform — combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products — positions us to win in this incremental space.”

DraftKings Predictions is expected to launch as a mobile app in the coming months. The company said it may expand its offering into additional categories over time.

DKNG Price Action: DraftKings ( DKNG ) shares were up 5.23% in after-hours, trading at $35.38 at the time of publication on Tuesday, according to Benzinga Pro.

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