FanDuel’s latest move to expand its reach into the US prediction market space underscores both the promise and the limits of regulated innovation in an industry still shaped by legal patchwork and global competition.
The Flutter Entertainment-owned sportsbook announced Wednesday that it will partner with derivatives marketplace CME Group to launch FanDuel Predicts, a new mobile app set to debut in December.
The new platform will allow users in states where traditional sports betting remains illegal to wager on sports outcomes and other event-based markets, including economic indicators like GDP and CPI, commodities such as oil and gold, and major stock indexes, including the S&P 500 and Nasdaq-100.
FanDuel said the partnership, regulated by the Commodity Futures Trading Commission (CFTC), provides it with a legal pathway to operate in jurisdictions where conventional betting products are prohibited under state law.
Flutter CEO Peter Jackson told CNBC’s Jim Cramer that the partnership with CME will make the product accessible in all states where FanDuel lacks a sports betting license.
“The CFTC regulates prediction markets… We’re going to be able to make these products available in all the states where FanDuel does not have a sports betting license.”
Peter Jackson – Flutter CEO
However, the company emphasized that it will not offer sports-related contracts in states where FanDuel’s standard sportsbook operates, to avoid regulatory conflicts.
The strategy is designed to close the gap between traditional regulatory restrictions and consumer demand. Still, it may not be enough to gain ground on the top offshore sportsbooks and decentralized competitors such as Kalshi and Polymarket.
These platforms, which operate under federal financial regulation rather than state gambling frameworks, have attracted growing trading volumes and investor attention by allowing wagers on sports, betting on election results, and gambling on economic outcomes from almost anywhere in the world.
FanDuel’s pivot toward prediction markets also coincides with disappointing quarterly financial results for parent company Flutter. The firm reported third-quarter revenue of $3.79 billion, missing Wall Street expectations, and trimmed its full-year forecasts.
The company cited a $150 million shortfall in US sports-betting markets and a shutdown of its operations in India after regulatory changes.
Meanwhile, competitors like DraftKings are making similar moves, acquiring or partnering with regulated financial exchanges to tap into the same space. Caesars, however, has expressed hesitation about entering prediction markets, citing potential license risks.
Some regulators, including those in Nevada and Illinois, have warned that operators engaging in prediction markets—even in other states—could jeopardize their gambling licenses.
FanDuel executives insist they are proceeding carefully. CEO Amy Howe said the company is “working with every single state regulator to educate them on what we are doing and what we are not doing,” emphasizing consumer protection and compliance.
While FanDuel Predicts could open new markets and broaden the company’s US footprint, analysts say the company still faces an uphill battle. Offshore sportsbooks retain a commanding lead among bettors seeking unrestricted markets, while new prediction exchanges are attracting traders and institutional players alike.
For now, FanDuel’s entry may expand access, but it has yet to tilt the odds in its favor.
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