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- Prediction markets offered through FanDuel Predicts app will let users trade event contracts on global benchmarks and economic indicators
- Sports outcome contracts available in states where traditional sports betting isn’t legalised
- FanDuel surrenders license to operate in Nevada over prediction markets bets
US gambling giant FanDuel is launching its own prediction markets product, enabling it to operate in states where traditional sports betting is illegal.
Flutter-owned FanDuel is working with derivatives exchange operator CME Group to launch the product in December through a new FanDuel Predicts application, providing access to sports event contracts tied to the outcomes of baseball, basketball, American football and ice hockey.
The sports betting features will only be available in states where traditional online sports gambling isn’t legal or not on tribal lands. Should states later legalise sports gambling, FanDuel said it will stop offering the sports-related event contracts.
Sports betting remains illegal in 11 US states.
In addition to sports, event contracts will be offered based on the value of stock indexes, oil and gas, gold, cryptocurrencies, and key economic indicators such as gross domestic product (GDP) and consumer price index (CPI).
“We can’t wait to bring FanDuel’s proven approach to market innovation into this dynamic sector,” said Amy Howe, chief executive at FanDuel.
“Our partnership with CME Group allows us to leverage their deep market expertise built over decades while delivering the seamless, accessible experience our customers expect.”
Terry Duffy, CME Group chairman and chief executive, added: “Our new event contracts on benchmarks, economic indicators and now sports will appeal to a new generation of potential participants who are not active in these markets today.
“This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.”
FanDuel’s product represents the latest response from established US gambling companies to the rise of prediction market exchanges such as Kalshi and Polymarket.
These exchanges operate under federal commodities and derivatives regulation rather than traditional state gambling laws, allowing them to offer financial contracts tied to sports games and other real-world events. Their growing popularity presents a competitive threat to FanDuel and other betting operators.
The announcement from FanDuel coincides with the company surrendering its license to operate in Nevada. Its rival DraftKings, which plans to launch a sports betting products based on prediction markets, has also agreed to withdraw all pending applications for sports wagering in the state.
“It has been made clear to the board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts,” said the Nevada Gaming Control Board. “This conduct is incompatible with their ability to participate in Nevada’s gaming industry.”
Nevada is one of multiple US states to have warned gambling operators they are in danger of losing their licenses if they take prediction market bets.
Howe has said that FanDuel is working with state regulators “to make sure we can educate them on what we are doing and what we are not doing”, adding that “protecting those relationships and our licenses in those states is certainly one of the most important things we do as we step into this new prediction market opportunity”.
As reported by Bloomberg, Flutter expects to invest as much as US$350 million this year and next as it rolls out the new FanDuel Predicts app.
The emergence of prediction market operators has triggered several legal clashes with state regulators. Last month, Kalshi sued New York’s gaming commission, arguing that the state agency is overstepping its authority by attempting to regulate sports betting operations that fall under exclusive federal jurisdiction.
Prediction market operators believe that their products are subject to review by the US Commodity Futures Trading Commission (CFTC) and not states, which typically regulate and tax other forms of gambling.
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