According to CNBC, Flutter CEO Peter Jackson revealed that FanDuel is launching a new prediction markets platform called FanDuel Predicts in December through a partnership with CME Group. The platform will allow users in states where sports betting is illegal—including major markets like California and Texas—to wager on sports outcomes by operating under CFTC regulation rather than state gambling laws. Jackson emphasized that these prediction markets are considered trading platforms, not gambling platforms, and will not be available where FanDuel already offers traditional sports betting. The platform will also include contracts on financial benchmarks like the S&P 500, Nasdaq-100, oil and gas prices, cryptocurrencies, and economic indicators including GDP and CPI. Flutter plans to invest heavily in the platform while leveraging its experience with global betting exchange Betfair.
The regulatory grey area
Here’s the thing—this is a brilliant regulatory arbitrage play, but it’s walking a very fine line. Prediction markets have existed for years in politics and financial markets, but applying them directly to sports outcomes in states that have explicitly rejected legal sports betting? That’s pushing the envelope. The CFTC has traditionally regulated these as “event contracts,” but states might see this as an end-run around their authority. Basically, FanDuel found a federal backdoor where state doors were closed.
Massive market expansion play
This move could potentially open up markets representing tens of millions of potential customers. California and Texas alone account for nearly 70 million people who currently can’t access FanDuel’s sportsbook. That’s huge. And they’re not just targeting sports—they’re throwing in financial instruments and economic indicators too, which could attract a completely different user base. But will people really use a prediction platform for both sports and the S&P 500? That seems like trying to serve two very different audiences with one product.
Potential execution challenges
Jackson says they’ll “win in America like we have done in sports betting,” but prediction markets have a mixed track record. Remember when Facebook tried prediction markets? They shut them down. Google had them too—gone. The user experience is fundamentally different from traditional sports betting, and the partnership with CME Group suggests this will feel more like trading than gambling. Will sports fans really want that experience? And what happens when state regulators push back? This feels like it’s destined for legal challenges.
Broader industry implications
If this works, it could completely change the sports betting landscape. Every major operator would need to develop similar prediction market offerings. But there’s a reason this hasn’t been done at scale before—the regulatory risk is substantial. States that have spent years developing their own sports betting frameworks aren’t going to happily watch federal regulations undermine their authority. Still, you have to admire the creativity. They’re basically using financial market infrastructure to offer what looks and feels like sports betting to the average user. Whether regulators see it that way remains to be seen.
