Three major U.S. sportsbook operators expanding into prediction markets are urging federal regulators to establish consistent consumer protections and clear industry standards, as disagreements among market participants expose competing views over how the emerging sector should operate.
Key Takeaways
- DraftKings, Fanatics, and FanDuel executives addressed the CFTC’s Innovation Advisory Committee as regulators weigh how to oversee prediction markets.
- The sportsbook-prediction market operators called for consistent consumer protections and clearer rules as the industry expands.
- Their comments came amid a broader CFTC discussion about market integrity, consumer safeguards, and how prediction markets should operate under federal oversight.
Leaders from DraftKings, Fanatics, and FanDuel addressed last week’s Commodity Futures Trading Commission advisory committee meeting, emphasizing safeguards and regulatory consistency as prediction platforms attract more retail customers. Their comments followed sharp disagreements between established financial market operators and upstart prediction market executives over contract integrity, manipulation risks, and the types of events suitable for federally regulated exchanges.
For sportsbook executives now investing heavily in their own prediction market platforms, the discussion highlighted an additional challenge: persuading regulators and consumers that an industry increasingly associated with sports wagering can manage the risks that come with rapid growth.
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Sportsbooks seek consistent rules
DraftKings CEO Jason Robins called for identical consumer protections regardless of how customers access prediction markets. He said customers trading directly through designated contract markets (DCMs) should face the same rules as those using futures commission merchants (FCMs), intermediaries that facilitate transactions.
“The rules for customers going directly to DCM versus those going through an FCM should be identical,” Robins said. “There really is no distinction from the consumer protection perspective.”
The issue reflects the range of business models emerging across prediction markets as operators compete for customers, control distribution, and develop exchanges or brokerage services.
DraftKings has pursued prediction markets as an additional growth opportunity rather than a replacement for its existing sportsbook business. The company previously reported more than 600,000 prediction customers through the first half of 2026 and described prediction market growth as exceeding expectations.
Robins also warned committee members against allowing disagreements over competing business models to undermine regulatory discussions. His comments came after CME Group CEO Terry Duffy and Kalshi cofounder Luana Lopes Lara clashed over market integrity and manipulation concerns, illustrating divisions between established financial exchanges and newer prediction market companies.
“Try to refrain from taking shots at each other’s business models or decisions you may not 100% agree with,” Robins said. “That doesn’t advance the discussion. All it does is sow divisions and distract the discussion towards debates that really aren’t productive.”
Fanatics warns of consumer backlash
Fanatics Betting and Gaming CEO Matt King focused on the financial risks facing retail customers and the consequences operators could encounter without clear responsible trading standards.
“While a vast majority of customers will use these products for profit or for fun, there is a small chunk of them that will have a problem using them,” King said.
He called for minimum standards applicable to all prediction market operators, arguing that proactive safeguards could protect consumers while preventing damaging publicity. Without those standards, King said, the industry risks “the backlash that would be inevitable” from stories about customers using prediction platforms “to their own financial harm.”
The warning mirrors concerns sportsbook operators have faced as legalized wagering expanded across the U.S., bringing increased scrutiny of advertising, customer acquisition strategies, and problem gambling safeguards. King described himself as a relative newcomer to prediction markets but said his experience serving retail consumers informed his approach to the sector.
“I think we have an amazing opportunity because of the leadership in this room to take a leadership position around the issue and set super clear standards from Day 1,” King said.
FanDuel emphasizes trust
FanDuel president Christian Genetski similarly argued that establishing consumer confidence should be the industry’s immediate priority. He identified consumer protection, market integrity, and advertising as areas where additional regulatory discussions could strengthen confidence.
“The most critical thing we can do for prediction markets right now is to build consumer trust,” he said. “The way to do that is to have clear rules of the road and a level playing field for all the participants.”
CFTC chairman Michael Selig closed the advisory committee meeting by emphasizing the commission’s determination to preserve federal oversight as state officials challenge the jurisdiction of prediction markets. He said federal regulators were working with Congress to add more protections and preemptions.
For sportsbook operators accustomed to navigating state-by-state gambling regulations, changes to federal policy or law could fundamentally shape how prediction markets expand. They could also determine the rules governing competition between multibillion-dollar companies investing hundreds of millions of dollars into their platforms.
