FanDuel is following DraftKings in offering sports event contracts on its prediction market product, making trades on major U.S. sports available in “states where online sports betting is not yet legal,” excluding tribal lands, beginning in December.
As announced by press release Wednesday ahead of parent company Flutter’s third-quarter earnings report, FanDuel revealed the sports event contracts will be offered on a new app called FanDuel Predicts, as part of the sportsbook market leader’s collaboration with commodities giant CME. FanDuel and CME first announced their tie-up in August, but at the time did not say that sports would be available. Last month, FanDuel CEO Amy Howe told InGame that the operator had “flexibility to pivot” into sports event contracts.
The new app will offer contracts on baseball, basketball, football, and hockey. In addition, it will include non-sports event contracts, on “benchmarks such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies, and key economic indicators such as GDP and CPI.” In September, CME Group Chairman & Chief Executive Officer Terry Duffy said on a podcast that the non-sports contracts would be fast-resolving, available for only an hour each.
The sports contracts will only be available in states where sports betting isn’t currently legal, and if a state legalizes sports betting, FanDuel said it will stop offering sports contracts in that state.
“We can’t wait to bring FanDuel’s proven approach to product innovation into this dynamic sector,” Howe said in the press release. “Our partnership with CME Group allows us to leverage their deep market expertise built over decades while delivering the seamless, accessible and trusted experience our customers expect.”
CME CEO Duffy added that the partnership would bring his company’s products to a much wider audience.
“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,” Duffy said. “This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.”
State regulators oppose sports contracts
The move into sports event contracts comes despite authorities in many states considering them to be an unlicensed form of gambling.
Regulators in Arizona, Ohio, Illinois, New York, and Michigan have written letters warning licensees about getting involved with prediction markets. Many even told operators that engagement with the product in another state or partnering with a company that offers them in another state could make a company unsuitable for a sportsbook license. FanDuel holds a sportsbook license in all five states.
FanDuel’s stance of offering sports event contracts only in states without legal sports betting appears to mirror the position of DraftKings, which last week said it would offer sports event contracts in states where its sportsbook is not available. DraftKings CEO Jason Robins said during the company’s earnings call that the decision to do so followed “conversations with regulators” that gave the business “comfort” in its path.
Within minutes of the announcement, the Nevada Gaming Control Board revealed that it had “accepted the surrender” of FanDuel parent company Flutter’s “Order of Registration” and any other licenses.
On Flutter’s earnings call, CEO Peter Jackson said the company would not put its core business at risk, but Nevada was different as the company only provides services for the retail sportsbook at Boyd Gaming’s Fremont Hotel and Casino in Las Vegas, rather than having a full business-to-consumer operation of its own.
“We always said we wouldn’t do anything to damage our existing business,” Jackson said. “Nevada’s a little different because we don’t have a B2C product there.”
The carve-out of Indian Country is also intended to prevent a conflict with tribes that have opposed sports event contracts.
Jackson: We’ll have best prediction market by Q2 2026
On the Flutter earnings call, Jackson said FanDuel and CME will continue to work on improving the prediction market product after it launches.
“We’ll have a great product when it launches in December and I think we’ll have the market-leading product by Q2,” he said.
“I don’t want to tell my competitors everything we’ve got planned, but we are very confident in our ability to offer a winning proposition. It was not ready for the start of the NFL this season, but we’re really focused on making sure that by the start of the NFL in 2026 we’ll have a winning product.”
Jackson said parlays — which are already available on Kalshi — will not be available initially, but should come later.
“We’re not going to launch parlays next month when we launch FanDuel Predicts, but you can expect us to follow with that next year,” he said.
FanDuel as a market maker?
In his comments accompanying the earnings report, Jackson also discussed the prospect that FanDuel will act as a market maker, using its trading teams to set both “buy” and “sell” prices for given contracts, and profiting off of the difference between them, like a traditional sportsbook.
“The strength of our world-class pricing and risk management capabilities present potential market-making opportunities which we continue to assess,” he wrote in the report.
However, on the earnings call, he said that this was not an immediate focus.
“There’s a lot of complexity to being a market maker on a CFTC-regulated DCM,” Jackson said. “And the ability to price complex, correlated outcomes accurately is very challenging, but is something that our team does every day. It’s something we’re looking at, but in the meantime our focus is on the B2C opportunity.”
He added that FanDuel is unlikely to use its prediction market to hedge the risk of parlays hitting, as he said he was confident in the FanDuel trading teams.
FanDuel and DraftKings in race to go live
The announcement now appears to put in motion a race to go live between FanDuel Predicts — with a December launch date — and DraftKings Predictions, which will be live “in the coming months.”
In terms of regulatory steps, FanDuel’s path appears to be a smoother one. CME is already registered with the National Futures Association (NFA) and CFTC as a Futures Commission Merchant (FCM), and InGame understands that the FanDuel Predicts app will operate based on this registration. CME must self-certify the contracts it wishes to offer, but — once the government shutdown ends — self-certified contracts can be offered as soon as the same day that the filing is submitted.
DraftKings may have more steps to go before launch. Last month, it acquired Railbird, which is already registered with the CFTC as a designated contract market (DCM). Railbird may be able to rebrand under the DraftKings name and submit a new rulebook to the CFTC, and then self-certify and list new contracts when its rules are approved. The business also has an active NFA application to be an FCM.
FanDuel highlights player protection tools
FanDuel noted that the consumer protection tools it offers for sports betting will also be in place on FanDuel Predicts.
“The platform will empower customers to trade responsibly with tools to help manage exposure, track spending and make informed trading decisions,” the press release said. Within the app, customers will find educational resources to learn about prediction markets and how to buy and sell event contracts.
“Customers may set deposit limits and deposit alerts that apply to all FanDuel products and may self-exclude, just as they can on all FanDuel products today.”
