FanDuel’s prediction market partner CME could soon offer sports event contracts, according to a report.
Bloomberg reported Thursday that CME will make available contracts “tied to sports games” before the end of the year, though it didn’t provide many specifics on what these will look like.
CME announced a partnership with FanDuel in August to launch a prediction markets product named FanDuel Markets. However, the FanDuel Markets offering, at least at first, isn’t expected to include sports. Regulators in states including Ohio, Arizona, and Michigan have warned sports betting licensees that including sports event contracts could put their sportsbook licenses at risk.
It appears, though, that CME is considering partnering with other businesses that may be more willing to delve into sports event contracts. The Bloomberg report says CME could list the contracts “on similar platforms” to its FanDuel markets app and open up its offering to “traditional retail investing brokerages.”
Still a risk to FanDuel licenses?
Even if FanDuel doesn’t offer sports event contracts itself, the contracts offered through a partner company could still pose a risk to its licenses.
A letter from the Ohio Casino Control Commission to sports betting licensees warned operators that even if they don’t do sports event contracts in Ohio, partnering with a company that does so could jeopardize their operation in the state.
“Any business relationship between an Ohio sports gaming licensee (including its related entities or those under common ownership) with any entit(ies) offering or facilitating the offering of unlicensed sports gaming in Ohio calls into question the reputation of the licensee and the integrity of sports gaming in Ohio,” the letter said.
So far, most traditional sports betting companies have not entered the world of prediction markets. FanDuel rival DraftKings has said little about its prediction market plans but has an application to join the National Futures Association, which would be a first step to entering the space. Daily fantasy giant Underdog has gotten involved, offering sports event contracts in 16 states as a “technical service provider” to Crypto.com.
In a statement to Bloomberg, a FanDuel spokesperson said: “As we work with CME Group to develop our offering, we are continuing to prioritize active conversations with a variety of stakeholders including state regulators and have made no decisions as we maintain an open dialogue in an evolving legal and regulatory landscape.”
CME founder: open to sports contracts
CME founder Terry Duffy has suggested that he is not opposed to CME offering sports event contracts. In an interview with Bloomberg’s Odd Lots podcast released this month, Duffy said the FanDuel Markets app could include sports “if in fact FanDuel wants to” offer those contracts.
Duffy has been more skeptical of contracts on elections, which he said he does “not believe right now … are a good thing.”
During the podcast appearance, Duffy also revealed that – at least initially – the collaboration would focus on fast-resolving markets, asking if certain commodity prices or economic indicators would be above or below a certain threshold at the end of an hour.
