FanDuel, a prominent North American online gaming company, has announced an exciting new venture into prediction markets through a partnership with CME Group, the global leader in derivatives markets. The two companies revealed that FanDuel Predicts, a standalone mobile app, will launch in December, providing users with access to sports event contracts and various financial markets.
This new product marks FanDuel’s entry into the rapidly growing sector of prediction markets, which allows participants to trade on the outcomes of events, including sports, economic indicators, and more. The app, FanDuel Predicts, will provide fans in states where sports betting is not legal with the ability to trade on the results of sporting events. Once online sports betting becomes legal in a state, FanDuel will discontinue offering sports-related event contracts there, ensuring compliance with state regulations.
Expanding Access to Financial Markets and More
In addition to offering contracts on sports outcomes, FanDuel Predicts will include a wide array of event contracts based on financial benchmarks, such as the S&P 500, Nasdaq-100, oil and gas prices, gold, cryptocurrencies, and key economic indicators like GDP and the Consumer Price Index (CPI). This will open up access to financial markets for millions of customers across the U.S.
Amy Howe, CEO of FanDuel, expressed her excitement about the new offering in the company’s press release, saying, “We can’t wait to bring FanDuel’s proven approach to product innovation into this dynamic sector. 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 is committed to ensuring the responsible use of its new prediction market platform. The FanDuel Predicts app will include robust consumer protection features, such as tools to help users manage their exposure and track their spending. The platform will offer educational resources on prediction markets and how to buy and sell event contracts. Additionally, customers will have the option to set deposit limits, receive deposit alerts, and self-exclude from the platform, maintaining the high standard of consumer protection that FanDuel is known for.
“FanDuel is bringing its top-tier customer experience to a new sector,” said Terry Duffy, Chairman and CEO of CME Group. “This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.”
The Launch and Future of Prediction Markets
FanDuel Predicts will allow users to trade on event contracts with prices ranging from as little as $0.01 to $0.99. The prediction markets for sports will be available in states where online sports betting is not yet legalized, such as California, Texas, and Georgia. Once these states legalize sports betting, FanDuel will stop offering sports-related event contracts in those markets.
This partnership follows a trend of traditional sports betting companies entering the prediction market space, responding to the rise of platforms like Kalshi and Polymarket, which are gaining popularity by offering federally-regulated event contracts. FanDuel’s entry into this space provides its users with a fresh way to engage with sports and financial markets while adhering to U.S. regulatory guidelines.
As FanDuel ventures into prediction markets, the legal landscape for such platforms remains complex. Prediction markets, which operate under the federal jurisdiction of the Commodity Futures Trading Commission (CFTC), are distinct from traditional sports betting, which is governed by state laws. FanDuel’s new product will be regulated by the CFTC, while its existing sports betting operations will continue to follow state regulations.
However, the rise of prediction markets has led to legal challenges in several states, with regulators expressing concerns over whether these platforms should be classified as sports betting. In response, FanDuel is working closely with state regulators to ensure compliance and maintain its relationships with gaming authorities.
