Sports betting firm FanDuel launches prediction markets platform

FanDuel, a sports betting firm, has partnered with a derivatives exchange operator, CME Group, to announce the launch of a prediction markets platform, “FanDuel Predicts”, in five US states, including Alabama, Alaska, South Carolina, North Dakota, and South Dakota, as reported by Reuters.

According to FanDuel, its new platform will enable users to trade event contracts on global benchmarks such as the S&P 500, Nasdaq-100, and prices of oil and gas, as well as key economic indicators.

The platform will also allow customers to access sports contracts across baseball, basketball, football, and hockey in states where online sports betting has not yet been legalised. Overall, FanDuel aims to perform a phased national roll-out to other US states by early 2026. 

"This launch is a pivotal step for expanding the reach of our products to FanDuel's millions of registered users across the US," said Lynne Fitzpatrick, CME's Chief Financial Officer.

According to Piper Sandler analysts, CME could garner more than $300 million in revenue from the FanDuel joint venture if it reaches the size of Kalshi and Robinhood's partnership.

As Edward Howarth, author at DashTickets online casino magazine, notes, this launch is a direct follow-up to the tie-up between FanDuel and CME Group that was announced earlier this year. The companies have already announced their goal to develop a new event-based contracts platform, and analysts predicted that CME is going to attempt to establish itself as the preferred exchange for sportsbooks.

“Prediction markets have grown rapidly in recent years, and it’s easy to see why CME wants to tap into their potential. It is also a good opportunity for FanDuel to broaden its horizons as well, especially considering its tight competition with DraftKings, which has already announced the launch of a similar platform earlier. So far, DraftKings seems to set the pace of this race, but it might change in the future,” said Howarth.

DraftKings, one of the leading sports-betting operators in the US, announced the launch of its prediction markets platform last week, also relying on CME as the exchange venue. DraftKings’ app and web platform will be available across 38 states and will enable users to trade on real-world outcomes across a range of markets. Although the company plans to roll out contracts focusing on sports and finance first, it aims to eventually expand its categories to include entertainment and culture.

Prediction markets are platforms that enable users to bet on the outcome of real-world events. Functioning similarly to sports betting, prediction markets expand betting to multiple possible scenarios across various industries and popular activities.

These platforms became highly popular during the 2024 US presidential race, although similar operators and tools had existed prior to that as well. For instance, Kalshi, one of the most well known platforms in the market, enables users to bet on economic indicators, cultural events, and political outcomes, although over 90% of user activity on the site is associated with sports gambling.