DraftKings and FanDuel have jointly taken measures to comply with regulations by relinquishing their licenses in Nevada and departing from the American Gaming Association (AGA). This strategic move comes as they gear up to introduce CFTC-regulated prediction market platforms that are at odds with Nevada’s regulations regarding sports event contracts.
Nevada regulators indicated that the planned prediction market activities of both companies were not aligned with state guidelines pertaining to licensed operators. The Nevada Gaming Control Board has accepted Flutter Entertainment’s voluntary surrender of its Order of Registration, along with associated approvals including those for FanDuel Sportsbook. Additionally, the Board has authorized DraftKings to withdraw all its pending applications relating to sports wagering in the state.
“The Board has been informed that Flutter Entertainment/FanDuel and DraftKings plan to engage in illegal activities concerning sports event contracts. Such actions are incompatible with their involvement in Nevada’s gaming sector,” the Board remarked.
“Our perspective on the current opportunities in prediction markets outside regulated states is in direct conflict with Nevada’s operational priorities for its licensed operators,” stated Alex Pitcocchelli, a spokesperson for FanDuel. “Thus, we’ve made the tough decision to voluntarily surrender our license.”
“In line with our commitment to regulatory compliance, we’ve retracted our inactive application in Nevada,” said Jen Aguiar, DraftKings’ chief compliance officer. “Prediction markets are regulated at the federal level by the Commodity Futures Trading Commission, and we are committed to working in close cooperation with regulators to ensure the highest standards of integrity in our operations.”
This withdrawal of licenses coincides with their exit from the AGA. Following sessions at the AGA’s Public Policy Committee in Washington, D.C., the companies have notified the association of their decision to terminate their memberships. The AGA has confirmed this change.
“After discussions with DraftKings and FanDuel, the AGA has accepted their request to terminate their memberships, effective immediately,” an AGA spokesperson announced. “We wish them success and look forward to maintaining close relationships as we promote and protect legal, regulated gaming.”
FanDuel mentioned that its future direction no longer aligns with AGA’s priorities. “As we venture into prediction markets, we acknowledge that this trajectory is misaligned with the AGA’s current priorities for its operator members,” the company informed InGame.
In a similar vein, DraftKings stated that its business model, which incorporates prediction markets, “no longer fully aligns with the AGA’s strategic direction in some aspects.”
Both companies are in the process of launching new platforms that will operate under federal oversight. FanDuel Predicts is scheduled to debut in December as part of a joint venture with CME Group. DraftKings is also working on its own DraftKings Predictions after acquiring Railbird, a platform approved by the CFTC, and is expected to launch it soon.
DraftKings and FanDuel have confirmed their intention to avoid operating prediction markets in jurisdictions where sports betting is legal and will implement geofencing to exclude tribal areas.
Other companies in the gaming market, such as PrizePicks and Underdog, are also entering the prediction market space, while traditional casino operators are not making similar moves. DraftKings and FanDuel are anticipated to continue their advocacy for sports betting legalization through the Sports Betting Alliance, alongside BetMGM, bet365, and Fanatics Sportsbook.