Fanatics Betting & Gaming will shutter its “Markets” prediction product in Utah beginning next Wednesday, InGame has learned. DraftKings removed all prediction market contracts related to sports, politics, and novelties in Utah Wednesday, and FanDuel ended those contracts in Utah at 8 a.m. local time Friday.
Fanatics will be going a step further by removing its platform completely from the state.
The moves seem to be in response to Utah Attorney General Derek Brown filing criminal charges against Kalshi co-founders Tarek Mansour and Luana Lopes Lara on Wednesday. Brown’s office ran an undercover operation in which an agent was able to create and fund a Kalshi account despite being in Utah, where gambling is explicitly illegal. Mansour, Lara, and Kalshi were each charged with 14 federal counts in Utah’s Third Judicial District.
Utah is the second state behind Arizona to file criminal charges against Kalshi.
DraftKings, FanDuel, and Fanatics are traditional sports betting companies that have launched prediction platforms. All three companies have been straddling a line with state gambling regulators as they are offering their prediction products in states that either do not have legal online sports betting or where they are not licensed.
Selig says state of Utah went ‘too far’
The criminal charges were filed two days after the Commodity Futures Trading Commission (CFTC) sued Utah in federal court Monday. In Arizona, it is the CFTC lawsuit that so far has kept the state from moving forward with the criminal charges.
CFTC Chair Michael Selig Friday again promised to take his agency’s case to the Supreme Court, but he also said the state of Utah had gone “too far,” during an interview on CNBC Friday morning.
“This is exactly why we’ve now sued 10 states across the country,” Selig said. “Congress was very clear when they established the CFTC as the exclusive federal regulator for commodities-derivative markets,” he said. “They intended for a national uniform system of regulation. … My brokers are regulated under a federal scheme, the exchange is regulated under a federal scheme, and when states start to bring criminal prosecution, this is no joke, this is serious jail time, up to 15 years in prison I believe.
“Of course there are technical, legal questions here as to whether a derivative with sports underlying is a contract that is subject to our regulatory framework or the state’s, as Utah’s has alleged here. This is something for the courts to work out. … It’s really not something that states should be throwing criminal penalties at founders over, this is really going too far.”
Fanatics will get election day action
In pulling down certain markets Friday, a FanDuel spokesperson told InGame that consumers will still be “able to trade on economic benchmarks and key financial indicators” though contracts on “sports, politics, and novelties are no longer available.”
Like DraftKings, FanDuel said that any outstanding positions “will remain open and settle as expected.”
Trading on prediction markets and app downloads of those platforms have been steadily increasing as the calendar flips toward Tuesday’s midterm elections. Per a Citizens report this week, Kalshi app downloads were up 351% during Week 7 of the NFL season, and Polymarket downloads were up 543%.
Of the three major sports betting companies that have joined the prediction fray, it appears only Fanatics Markets will continue to be fully operational in Utah through election day.
