Flutter Entertainment’s FanDuel–which entered the pre-PASPA U.S. sports betting space as a DFS pioneer, along with DraftKings–has thrown down the gauntlet to the gaggle of new wannabe futures betting sites by entering the prediction markets fray – Big Time.
Peter Jackson’s now-U.S.-headquartered gambling omnichannel, arguably the world’s most progressive and fastest growing iGaming company, has just unveiled what it terms “a groundbreaking alliance” with Chicago-based CME Group, a financial services company specialising in Futures and Options trading, AKA prediction markets.
As regular readers of iGamingFuture may be well versed, the prediction markets phenomenon–as bulldozed by the controversial Kalshi Exchange, Robinhood, Polymarket, et al–has threatened to bust the lucrative world of U.S. sports betting wide open.
Kalshi, founded and headed by MIT (Massachusetts Institute of Technology) wunderkinds Tarek Mansour and Luana Lopes Lara, in particular, has been making waves and raising hundreds of millions of dollars of expansion capital.
Challenge
Aided by their close ties with Trump Family Inc., they’ve seen off the oversight of the regulatory Commodity Futures Trading Commission (CFTC) and even challenged the entrenched California gambling monopoly of Native American Tribes.
FanDuel, founded in Edinburgh, Scotland, in 2009 and bought by Flutter in 2018, currently controls some 40 percent of U.S. online sports betting action in the 27 of the 50 American states where it is legal; followed by DraftKings and the Entain-MGM Resorts International joint-venture, BetMGM.
But in the past 12-months these online sports betting leaders have been coming under increasing pressure from Kalshi and its prediction markets cohorts, who have seized the gambling zeitgeist and the media headlines in this new age of crypto-powered money markets and bitcoin.
Working the old canard “if you can’t beat ‘em, join ‘em”, Irish-origin Flutter–owner of Paddy Power, PokerStars, Sisal and a host of other top brands around the world–has now reacted decisively to the prediction market challenge with the CME tie-up.
Platform
“Partnering with CME Group will unlock our ability to bring even more new and engaging products to FanDuel’s fast-growing customer base,” affirmed FanDuel CEO Amy Howe in a media statement.
“We believe there is potentially a wide audience for trading event-based markets and we want to provide a platform that allows our customers to engage in this activity.
“We are excited to be partnering with CME Group to design new and engaging products, combining innovation with best-in-class regulatory compliance and consumer protections.”
The deal–which is still subject to regulatory approval–will see the two organisations collaborate to deliver event-based contracts, with products expected to go live before the end of the year.
Gas and Gold
In a joint press release FanDuel and CME asserted:
“This innovative partnership will build on CME Group’s long track record of developing regulated, transparent markets and FanDuel’s vast customer reach.
“Together, the companies will develop new fully-funded, event-based contracts with defined risk.
“Customers will be able to express their views multiple times a day on a wide range of markets with simple ‘yes’ or ‘no’ positions for as little as US$1.”
Although most industry watchers would concur that FanDuel-CME’s principal target market must be sports betting, the companies have underplayed this vertical and instead confirmed that their “products” will feature key economic indicators and benchmarks such as the S&P 500 and Nasdaq-100, and commodity prices, including “cryptocurrencies, oil, gas and gold”.
In recent weeks, high-level sources in BetMGM have also confirmed “off-the-record” that the Vegas-based iGaming company is looking to launch a prediction markets venture; while DraftKings has been in discussions to acquire newly-legal event contractors Railbird Exchange since July.
Watch this space!
