FanDuel and DraftKings Leave Nevada Amid Clash Over Prediction Markets

FanDuel and DraftKings, the top two US online sports betting companies, have chosen to exit Nevada due to growing friction with state regulators about prediction markets’ legal status. This move signals a change in strategy towards a new regulated field that could transform how Americans bet on sports and other events.

NGCB Confirms FanDuel’s License Surrender and DraftKings’ Exit

The Nevada Gaming Control Board (NGCB) verified that Flutter Entertainment, FanDuel’s parent company, gave up its state licenses, while DraftKings pulled out all pending applications, reported The Nevada Independent. Regulators said this decision was part of an agreement following cautions that both companies’ planned activities involving “sports event contracts” clashed with Nevada‘s gaming laws.

The NGCB’s statement made it clear that prediction markets are seen as a form of betting under state law. These markets let people trade contracts based on how sports, financial, or political events turn out. The agency cautioned that licensed operators could face punishment if they take part in such activities even outside of Nevada.

FanDuel spokespeople said that while the company values its ties with Nevada officials, its current goals fit better with the new federal rules for prediction markets. The company plans to focus on launching FanDuel Predicts, a new app set to come out next month. This app will let users in states without legal sports betting buy and sell contracts on sports and economic results. FanDuel stressed that tools to promote safe gambling will be key to the product, including spend caps, notices about deposits, and features to educate users.

DraftKings Bets on Prediction Markets, Exits Nevada to Focus on National Expansion

DraftKings is getting ready to launch DraftKings Predictions, a platform similar to Kalshi. This comes after they bought Railbird, a startup that deals with event contracts. Jen Aguiar, who heads up compliance at DraftKings, said they decided to back out of their Nevada application. This move shows they are still committed to following regulations and working with federal authorities.

Both DraftKings and Kalshi say the Commodity Futures Trading Commission (CFTC) regulates prediction markets, not individual states. Because the CFTC oversees these markets at the federal level, the companies can reach users in big markets like Texas and California where you cannot bet on sports yet.

FanDuel and DraftKings’ absence will not shake up Nevada’s betting landscape much right now, since neither company runs online sportsbooks in the state. FanDuel’s footprint was a brand deal with Boyd Gaming’s Fremont Casino, which wrapped up earlier this year.

Though Nevada’s tough stance might scare off other players, market watchers think these companies are banking on prediction markets to be the next big thing in US gaming. This could bridge the gap between financial trading and sports betting as legal definitions keep changing.