FanDuel Predicts: Entry into the U.S. Prediction Market
On November 12, 2025, FanDuel made headlines with a groundbreaking announcement: the launch of FanDuel Predicts, a standalone app offering federally regulated prediction market contracts. This move marks a strategic pivot for the U.S. sportsbook giant, signaling its intent to expand beyond traditional sports betting and into the realm of financial event trading. Backed by a partnership with CME Group, FanDuel’s entry into prediction markets could reshape the competitive landscape, regulatory discourse, and consumer experience across the gaming and financial sectors.
A New Frontier: What Is FanDuel Predicts?
FanDuel Predicts is designed to offer users the ability to trade binary contracts on the outcomes of real-world events. These contracts are priced between $0.01 and $0.99, reflecting the probability of a given outcome. If the event occurs, the contract pays out $1. If not, it expires worthless. This model mirrors the structure of existing prediction markets like Kalshi and Polymarket, but FanDuel’s scale and brand recognition give it a unique edge.
The app will feature contracts across two major categories:
- Sports Events: Outcomes in baseball, basketball, football, and hockey.
- Non-Sports Events: Financial indicators such as the S&P 500, Nasdaq-100, oil prices, gold, cryptocurrency benchmarks, GDP growth, and CPI inflation.
FanDuel Predicts will launch in December 2025, but only in states where online sports betting is not yet legal. Tribal lands are excluded from the rollout. This strategic limitation is designed to avoid regulatory conflicts with existing sportsbook licenses and state-level gaming commissions.
Strategic Rationale: Why FanDuel Is Betting on Prediction Markets
FanDuel’s decision to enter the prediction market space is driven by multiple strategic factors:
1. Market Expansion
By targeting states without legalized sports betting, FanDuel can tap into new user bases without cannibalizing its sportsbook operations. This move allows the company to monetize regions that have been off-limits due to regulatory constraints.
2. Product Diversification
Prediction markets offer a lower-overhead alternative to traditional sportsbooks. There are no odds traders, no risk management desks, and no need to balance exposure across betting pools. Instead, users trade directly against each other, with FanDuel acting as the platform facilitator.
3. Competitive Positioning
FanDuel’s entry into prediction markets positions it ahead of competitors like DraftKings, Caesars, and MGM, none of whom have launched similar products. While DraftKings has announced plans following its acquisition of Railbird, FanDuel’s partnership with CME Group gives it a first-mover advantage in terms of infrastructure and regulatory alignment.
4. Regulatory Hedge
By operating under federal oversight from the Commodity Futures Trading Commission (CFTC), FanDuel can sidestep some of the state-level friction that has plagued sportsbook expansion. This hedge allows the company to continue growing even if state legislatures stall on sports betting legalization.
The CME Group Partnership: Infrastructure Meets Distribution
FanDuel’s collaboration with CME Group is a cornerstone of the Predicts platform. CME brings decades of experience in derivatives trading, clearing, and regulatory compliance. By leveraging CME’s infrastructure, FanDuel can offer event contracts that meet federal standards for transparency, risk management, and consumer protection.
This partnership also allows CME to expand its reach into retail markets. Historically, CME’s products have been geared toward institutional investors and professional traders. FanDuel Predicts opens the door to millions of retail users who are familiar with sports betting but new to financial event trading.
Regulatory Landscape: Navigating Federal and State Oversight
Prediction markets in the U.S. are regulated by the CFTC, which oversees commodity futures and derivatives. This federal framework allows platforms like Kalshi to operate legally, provided they meet strict compliance standards.
However, state regulators have expressed concern over the overlap between prediction markets and gambling. In recent months, officials in Arizona, Ohio, Illinois, New York, and Michigan have warned operators that offering sports-related prediction contracts could violate state gambling laws. These warnings have created a patchwork of legal interpretations that FanDuel must navigate carefully.
To mitigate risk, FanDuel has committed to withdrawing sports contracts in any state that legalizes online sports betting. This policy is designed to prevent conflicts with existing sportsbook licenses and maintain goodwill with state regulators.
Competitive Landscape: FanDuel vs. Kalshi, Polymarket, and DraftKings
FanDuel’s entry into prediction markets places it in direct competition with platforms like Kalshi and Polymarket, both of which have carved out niches in the event trading space.
- Kalshi: A federally regulated platform offering contracts on economic indicators, political outcomes, and cultural events. Kalshi has focused on legitimacy and compliance, securing CFTC approval for its offerings.
- Polymarket: A decentralized prediction market built on blockchain technology. Polymarket operates outside traditional regulatory frameworks, which has led to enforcement actions and limitations on U.S. users.
FanDuel’s advantage lies in its brand recognition, user base, and regulatory alignment. With over 50% market share in U.S. sports betting, FanDuel can onboard millions of users to Predicts with minimal friction. Its partnership with CME also ensures that the platform meets federal standards, avoiding the legal gray areas that have hampered competitors.
DraftKings, FanDuel’s closest rival in the sportsbook space, has announced plans to enter prediction markets following its acquisition of Railbird. However, DraftKings has not yet launched a product, giving FanDuel a critical head start.
Consumer Experience: Bridging Gaming and Finance
FanDuel Predicts is designed to be intuitive, secure, and educational. Key features include:
- KYC Verification: Users must provide Social Security numbers, government-issued IDs, and banking information to comply with CFTC regulations.
- Consumer Protection Tools: Deposit limits, loss alerts, and self-exclusion options are built into the platform.
- Educational Resources: Tutorials, FAQs, and market explainers help users understand how prediction contracts work.
The app’s interface mirrors FanDuel’s sportsbook, making it familiar to existing users. Contracts are displayed with clear pricing, payout structures, and expiration dates. Users can track their positions, view market sentiment, and analyze historical data to inform their trades.
Financial Implications: Flutter’s Long-Term Strategy
FanDuel’s parent company, Flutter Entertainment, reported a dip in Q3 earnings amid regulatory delays and increased competition. The launch of FanDuel Predicts is part of a broader strategy to diversify revenue streams and hedge against market volatility.
Prediction markets offer several financial advantages:
- Lower Operating Costs: No need for odds traders or risk management desks.
- New Revenue Streams: Monetization of previously inaccessible markets.
- Cross-Sell Opportunities: Users of Predicts may convert to sportsbook customers once betting is legalized in their states.
With FanDuel already commanding ~47% of U.S. net gaming revenue, the addition of Predicts could further consolidate its dominance. The platform also positions Flutter as a pioneer in the convergence of gaming and financial trading.
Industry Reactions: Praise, Caution, and Competitive Pressure
The announcement has sparked mixed reactions across the industry:
- Regulators: Some state officials have expressed concern over the legality of sports-related prediction contracts. Others have praised FanDuel’s commitment to federal compliance and consumer protection.
- Competitors: DraftKings is expected to accelerate its prediction market plans. Smaller operators may struggle to compete without similar infrastructure or regulatory clarity.
- Analysts: Market watchers see FanDuel Predicts as a bold move that could redefine the boundaries between entertainment and finance. However, they caution that regulatory risk remains high, especially at the state level.
Conclusion: A Transformative Step in U.S. Gaming and Finance
FanDuel Predicts represents a transformative step in the evolution of U.S. gaming and financial markets. By entering the prediction market space, FanDuel is not just expanding its product portfolio — it’s redefining what it means to engage with real-world events.
The platform bridges the gap between sports betting and financial trading, offering users a new way to interact with the world around them. Backed by CME Group and regulated by the CFTC, FanDuel Predicts combines scale, legitimacy, and innovation in a way that few competitors can match.
As the platform rolls out in December 2025, all eyes will be on FanDuel to see whether it can turn prediction markets into a mainstream consumer product. If successful, Predicts could become a blueprint for the future of event-based trading — one that blends entertainment, finance, and technology into a single, seamless experience.
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