Fanatics is the latest sports betting company to embrace the prediction markets model. CEO Michael Rubin told CNBC on Thursday that Fanatics will begin offering event contracts “within the next couple weeks.”
Key Takeaways
- Fanatics will launch their prediction markets within weeks.
- The announcement follows FanDuel's and DraftKings' entries into prediction markets.
- FanDuel and DraftKings recently withdrew applications for Nevada gaming licenses and exited the AGA over regulatory conflicts between legalized sports betting and prediction markets.
Not long after DraftKings and FanDuel announced their prediction market products, Fanatics is joining the fray.
Last week, Fanatics, a leading sportswear merchandising company and sportsbook, was reportedly in talks with Crypto.com, which is regulated by the Commodity Futures Trading Commission (CFTC). Crypto.com started to offer sporting event futures contracts on its platform earlier this year and is no stranger to sports-related alliances, having partnered with DFS provider Underdog in September.
“If there is a business that is important to our customers, we want to be in there and do it better,” Rubin said.
He added that he believes traditional sportsbooks that launch prediction markets will have a strategic advantage over the Kalshis and Predictits of the world, given their experience and sizable customer base.
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Riding the wave
DraftKings was the first conventional sports betting company to take the plunge into prediction markets. To secure CFTC approval, DraftKings acquired the federally regulated Railbird Exchange in October.
FanDuel announced its foray into prediction markets earlier this month. It partnered with the CFTC-regulated CME Group in August. FanDuel will start offering sports event contracts before the end of the year.
Sports betting operators’ foray into prediction markets isn’t without risk - even with the cover of federally regulated partners. Several states claim prediction markets are violating state gambling laws. Some are embroiled in legal action against prediction market operators.
Prediction markets’ legal issues in Nevada are one reason DraftKings and FanDuel recently pulled their Nevada license applications. The conflict between legalized sports betting and prediction markets is also why the two giants pulled out of the American Gaming Association. Fanatics is not currently licensed in Nevada and is still listed as an AGA member.
