Faced with growing competition from sports prediction markets like Kalshi and Polymarket, FanDuel has announced its entry into the industry.
FanDuel is partnering with the CME Group, a leading derivatives marketplace, to offer the new FanDuel Predicts app. The app and the shift to prediction markets will enable FanDuel access to markets that lack a legal online sports betting industry.
The standalone mobile app is expected to launch this December. It will provide sports events contracts across the four major American professional sports. However, those located on tribal lands will be blocked from using the app.
“We can’t wait to bring FanDuel’s proven approach to product innovation into this dynamic sector,” FanDuel CEO Amy Howe said. “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.”
FanDuel Joins Growing Industry
The move allows FanDuel to join a booming industry, which started when Kalshi launched sports markets during March Madness earlier this year.
But FanDuel will only offer its prediction app in markets void of sports betting. As new states legalize sports betting, FanDuel will cease offering its prediction markets.
In addition to sports, users can engage in contracts from other industries. Like other platforms, FanDuel will offer markets involving equity markets and commodity prices. FanDuel plans to add the brand’s consumer protection program to the platform. The “trade responsibly” tools are meant to help manage exposure, track spending, and make informed trading decisions.
“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,” said CME Group Chairman and CEO Terry Duffy. “This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.”
Exiting Nevada
Analysts have viewed platforms like Kalshi and Polymarket as a threat to traditional sports betting operators. As a result, FanDuel got involved in the business itself.
DraftKings also recently announced it would enter the sports prediction business. Both FanDuel and DraftKings recently withdrew sports betting applications after regulators said that operators offering what they see as illegal sports prediction markets could lose their licenses.
“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,” the Nevada Gaming Commission recently said. “This conduct is incompatible with their ability to participate in Nevada’s gaming industry.”
Kalshi faces considerable opposition and legal wrangling from states with legalized sports betting since launching sports prediction markets. It’s already engaging in lawsuits with several states, including New Jersey, New York, and Maryland.
Ohio became the latest Kalshi battleground when the company sued state gaming regulators in response to cease-and-desist letters. Kalshi argues that its platform is already regulated by the Commodity Futures Trading Commission. Thus, it doesn’t need to comply with state gambling laws since it’s already regulated at the federal level.
However, that didn’t stop the NHL inking a partnership with Kalshi and Polymarket.
