Prediction market dispute splits US betting industry
The US sports betting industry is facing a split as FanDuel and DraftKings end their membership with the American Gaming Association (AGA). On 17 November, both companies confirmed their resignation, according to a report by Jill Dorson of InGame. The decision follows the launch of their sports prediction platforms, FanDuel Predicts and DraftKings Predictions.
Major split: what happened?
FanDuel and DraftKings began as daily fantasy sports platforms before expanding into sports betting. Both companies have long worked with the AGA, which represents regulated gaming operators and shapes national policy. Recently, their focus on prediction markets has created a divide, as these priorities differ from the AGA’s stance.
The dispute centres on prediction markets, which have become a major point of contention. The move highlights growing divisions over how these markets should be regulated and integrated into sports wagering. The AGA has opposed sports prediction markets, arguing they closely resemble sports betting but lack adequate regulation. This disagreement has led to a clear break between the two companies and the industry group.
AGA’s firm opposition
The AGA has maintained a clear stance against normalising prediction markets. Earlier this year, it urged the Commodity Futures Trading Commission (CFTC) to restrict companies offering what it described as unregulated sports betting. The AGA also released surveys highlighting concerns that prediction markets blur the line between regulated gambling and speculative trading.
Major sports leagues have faced pressure as well, with the AGA warning organisations such as the NHL against partnering with platforms like Kalshi or Polymarket. This strong opposition contributed to FanDuel and DraftKings’ decision to leave the association.
FanDuel and DraftKings push forward
Both companies are continuing with their prediction market plans despite opposition. FanDuel Predicts is scheduled to launch in December, offering sports contracts in states without legal sports betting. DraftKings Predictions, announced earlier this month, will roll out in select states in the coming months.
Prediction markets face resistance from regulators across several states, who argue these products violate gambling laws. Some regulators have warned licence holders that involvement could affect their suitability.
Nevada has also opposed prediction markets, and neither FanDuel nor DraftKings has a good presence there, making their withdrawal from licensing largely symbolic but strategic. Meanwhile, operators like PrizePicks and Underdog, which focus on fantasy sports, remain outside the AGA as they explore similar models.
Federal and State lobbying efforts
FanDuel and DraftKings plan to continue lobbying through the Sports Betting Alliance for regulations that support prediction markets. FanDuel also hired federal strategists in July to strengthen its position. State-level debates are expected to focus on prediction markets, consumer protection, and the definition of gambling.
The shift could give users access to prediction platforms in states without legal sports betting and more interactive sports options. However, risks include unclear legal frameworks, limited oversight, and confusion between prediction markets and betting.
The road ahead
This divide reflects broader tensions between innovation and regulation. As DraftKings and FanDuel expand into prediction markets, established casino operators aligned with the AGA are resisting efforts to maintain existing frameworks. The outcome could reshape US gaming, raising questions about regulation, consumer protection, and the balance of state and federal oversight.
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