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Drive by DraftKings plans to ‘double down’ on real-money gaming

VC firm Drive by DraftKings has unveiled plans to “double down” on real-money gaming (RMG) with its second fund.

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Founded in 2019 by a group of leaders from DraftKings, General Catalyst, Boston Seed Capital, and Accomplice, Drive by DraftKings backs early- and growth-stage companies across SportsTech, media, and human performance.

However, as CEO and managing partner Meredith McPherron made clear in a new strategy update, real-money gaming is now firmly in the firm’s crosshairs.

‘It’s just getting started’

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

Drive’s conviction comes amid an industry-wide transformation that has seen real-money elements blur with mainstream sports, gaming, and content experiences.

From skill-based contests and DFS to creator-led sweepstakes and crypto betting markets, RMG continues to innovate the gaming experience outside traditional sportsbooks and online casinos.

In a recent blog post, Drive outlined three forces that it believes are accelerating the sector’s momentum: technological maturity, regulatory fluidity, and cultural normalisation.

“What ties it all together is a core loop we see playing out again and again — play, payout, repeat,” McPherron added.

RMG 2.0

According to Drive, the technical infrastructure underpinning real-money experiences has matured rapidly since the repeal of PASPA in 2018, which paved the way for legalised sports betting in the US.

Today, players can deposit, bet, and cash out in minutes — with geolocation, KYC, and real-time compliance tools now baked into standard operating models.

AI-powered development tools are also accelerating time to market, enabling small studios to iterate quickly and launch lean.

Drive argued the stage is set for “RMG 2.0”, a new wave of entertainment products built on the back of this infrastructure.

Legal a ‘moving target’

Though 30 US states and Washington, DC now allow online sports betting — and seven permit some form of iGaming — Drive cautions that “legal” remains a “moving target.”

“DFS-style contests and sweepstakes face new scrutiny, but rapid adoption shows that demand for low-friction real money experiences remains strong.”

With prediction markets also “gaining momentum”, Drive said founders must integrate compliance into product design from the start.

Meanwhile, real-money gaming has shed its taboo status, the VC firm argued.

“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.”

This shift opens the door to broader audiences, including players who were previously monetised only through free-to-play models.

Fund II focus

Having backed early movers like Papaya, Picklebet, and Triumph in its first fund, Drive by DraftKings is now setting its sights on the next wave of category-defining companies.

With Fund II, the firm plans to invest in infrastructure capable of supporting global-scale real-money gaming, as well as new entertainment formats that blend streaming, social interaction, and real-time liquidity.

Another key focus will be next-generation studios that can develop and launch mobile-native games in a matter of weeks rather than years.

“If you’re building at the frontier of real-money gaming, we’d love to hear from you,” McPherron wrote.

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