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Summary:
- FanDuel surrendered its Nevada gaming license after regulators warned operators against prediction market activity.
- The move follows Flutter Entertainment’s launch of “FanDuel Predicts,” a new app with CME Group offering event-based contracts.
- Nevada’s Gaming Control Board said such markets qualify as illegal wagering under state law.
FanDuel has announced that it will officially withdraw from Nevada after state regulators warned that any company involved in prediction markets could face consequences.
The move comes right after its parent company, Flutter Entertainment, announced a new FanDuel-branded prediction market app in partnership with CME Group, the global derivatives exchange.
The App, Aimed at “a New Generation of Potential Participants”
The new platform, called “FanDuel Predicts“, is set to launch in December and will allow users to trade contracts based on the outcomes of sports events, stock indexes, commodities, and economic indicators like GDP and inflation.
The app aims to open up access to financial-style markets for regular users, even in states where online sports betting isn’t yet legal.
CME Group Chairman and CEO Terry Duffy said,
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. This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.
Gaming Control Board Deemed the App Illegal
Nevada’s Gaming Control Board didn’t see it that way. Regulators made it clear that offering or participating in prediction markets tied to sporting or entertainment outcomes qualifies as illegal wagering under state law.
Board Chair Mike Dreitzer said,
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. This conduct is incompatible with their ability to participate in Nevada’s gaming industry.
In response, FanDuel surrendered its registration and all licensing in Nevada, cutting ties with the state for now. The company had previously held a license as an information services provider and worked with Boyd Gaming at the Fremont Hotel & Casino in downtown Las Vegas.
FanDuel said the decision wasn’t made lightly.
While we are enthusiastic about expanding FanDuel’s presence in Nevada, our views of the current opportunity for prediction markets outside of regulated states are unfortunately in direct opposition to Nevada’s priorities for its licensed operators. As a result, we are making the difficult decision to voluntarily surrender our license. We look forward to resuming our Nevada efforts in the future as circumstances allow.
For now, the company says it remains focused on maintaining strong relationships with regulators in the 24 jurisdictions where it continues to operate.
