Sports betting operators are always searching for that special someone: the brick-and-mortar casino with mobile wagering "skins," the professional sports team with advertising space to sell, the technology provider you can bring in-house to drive innovation.
The latest "land grab" for the sports betting business may not be as sexy, but it could be the most important yet for online bookmakers, especially those looking to establish themselves where state lawmakers have yet to permit them.
- Major sportsbooks like FanDuel and DraftKings are exploring CFTC-regulated prediction markets.
- FanDuel has partnered with CME Group to launch a new prediction platform focusing on non-sports events.
- While companies like DraftKings, BetMGM, and Polymarket weigh similar moves, concerns about regulatory backlash and uncertain market viability are keeping operators cautious for now.
Those new potential targets for acquisition by or partnership with online sports betting sites in the U.S. are the various companies overseen by the U.S. Commodity Futures Trading Commission (CFTC), the federal regulator that has thus far allowed exchanges to offer sports event contracts.
The sports-related event contracts make it possible to offer de facto sports wagering in all 50 states, rather than just the ones that have legalized such wagering. For the likes of DraftKings, FanDuel, and others, then, they offer the opportunity to access currently forbidden markets like California and Texas.
That is, of course, if you’re willing to try that sort of thing.
And away we go
On Wednesday, CME Group (the CFTC-regulated, "world's leading derivatives marketplace") and FanDuel announced a "groundbreaking alliance," the goal of which is to launch a new prediction market.
Via FanDuel, the two companies will offer a variety of things that people can bet “yes” or “no” on, albeit with one glaring omission so far: sports.
“Expected to launch later this year, the products will include benchmarks such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies, and key economic indicators such as GDP and CPI, with further details of additional offerings to be determined in the coming months,” the press release said.
No sports (... yet)
In other words, FanDuel is in line to offer wagering on a bunch of things unrelated to sports, but still possibly sports at some point. Exactly when is the big question, and one that may take years to get an answer.
FanDuel’s owner, Flutter, has talked about how it already runs the Betfair Exchange, suggesting it has the knowhow for a federally regulated prediction market in the US. So they need CME for… market access? pic.twitter.com/lSTl1KhVIj
— Geoff Zochodne (@GeoffZochodne) August 20, 2025
That is because other CFTC-regulated entities are fighting in court with state sports betting regulators over the legality of sports event contracts. A definitive outcome could take months or even years to reach.
In the meantime, the likes of Kalshi, Robinhood, and Crypto.com are still offering (and expanding) their sports event contracts.
FanDuel is now poised to do the same, but it has important partners it doesn’t want to tick off by doing so, such as those aforementioned state regulators. So, for now, FanDuel will have to get by being the biggest online sportsbook operator in the U.S. states in which it is allowed to operate, while also taking some additional action on the price of bitcoin and other things.
Kalshi is getting ready for football season with some new sports event contracts that would look right at home in a state-regulated sportsbook:https://t.co/nn2YNu5dnh @Covers
— Geoff Zochodne (@GeoffZochodne) August 18, 2025
Furthermore, FanDuel is poised to join Kalshi and the others in offering sports event contracts if their legality is upheld in court. Its new prediction platform with CME will be right there, waiting for the day to bring de facto moneylines, point spreads, and totals to a new audience.
"The message is now loud and clear that in the event sports contracts are not made illegal by the CFTC, FanDuel is building the framework and infrastructure for an exchange long term if allowed at the federal level," analysts at investment bank Citizens wrote on Wednesday.
FanDuel may not be the only one positioning themselves in this way either.
Polyamorous prediction possibilities
FanDuel’s chief rival in state-regulated sports betting, DraftKings, has already been linked to another CFTC-regulated company, Railbird Exchange. And FanDuel’s announcement on Wednesday is now further revving up speculation about what DraftKings will do.
Analysts at investment bank Jefferies wrote on Thursday that they see it as "likely" for DraftKings to follow FanDuel, but perhaps in a different, more expensive manner. The analysts said a CFTC-regulated prediction market requires a designated contract market (DCM) license and a futures commission merchant (FCM) license, and that DraftKings could be setting itself up for both.
“Reports began circulating earlier this summer regarding DKNG's interest in acquiring Railbird, a recently approved DCM license holder, which would check one of the two boxes required to operate Prediction in the US,” the Jefferies analysts wrote. “Furthermore, DKNG (and Fanatics) also recently registered with the National Futures Association (NFA), an industry trade group which self-regulates behavior on the futures exchanges, which could endear DKNG to the CFTC and pave the way for a FCM license.”
While this could cost more than the FanDuel route, “it also would allow DKNG to keep more of the economics of platform,” they added.
Keep on your toes
The Big Two of online sports betting in the U.S. are not alone in pondering the future. BetMGM CEO Adam Greenblatt weighed in during their latest financial update, saying they won’t be “caught flat-footed,” but also suggesting that they won’t be a “first mover” in prediction markets either.
Greenblatt also pointed out that obtaining a futures commission merchant license from the CFTC, which would allow for a partnership with a prediction market, is an approximately 12-month process. Robinhood, for example, possesses an FCM license that allows it to partner with Kalshi to offer sports event contracts.
So sportsbook operators are at least pondering potential partners in the prediction market business. However, as the analysts at Jefferies noted, there is also the potential “to impact relations with both existing legal state regulators, and potential new state opportunities, most notably CA tribes and TX political bodies.”
And away we go...
— Geoff Zochodne (@GeoffZochodne) July 21, 2025
"Polymarket, the world's largest prediction market, today announced that it has closed an acquisition of the holding company of a Commodity Futures Trading Commission-licensed derivatives exchange (QCX, LLC) and clearinghouse (QC Clearing LLC) (collectively… pic.twitter.com/AfWnmTdiau
The other concern about running a prediction market is, well, what if it sucks?
Just because you open one, it doesn’t guarantee it will generate the same sort of success as DraftKings and FanDuel and others have seen with their online sportsbooks and casinos. That could be especially true if the newcomers are hesitant to offer sports event contracts for fear of upsetting their current regulators.
In answering a question that mentioned the possibility of "a bit of a land grab" in the prediction market world, BetMGM’s Greenblatt said he didn’t think his company has the same “right to win” in prediction markets as it does in, say, online casino gambling.
Polymarket, another prediction market forced offshore by U.S. regulators, is preparing a homecoming following the acquisition of another CFTC-regulated entity. Online advertising suggests that homecoming could happen in time for this year’s football season. This would put what is arguably the world's biggest prediction market back in the U.S. in a (currently) legal way.
Competitive concerns, for the moment, could keep the regulatory land grab a little more restrained. Even so, anything may be possible these days.
“Frankly, we won't be surprised by anything in this domain,” Greenblatt said.
