DraftKings, Fanatics, and FanDuel have all launched prediction market offerings. However, they have brought only some of the anti-addiction tools from their mobile sportsbooks, raising concerns that the companies aren’t doing enough to help prevent users from developing harmful gambling habits.
Users Are Often Missing Critical Anti-Addiction Tools, Such As Hotlines
Right now, users can set betting limits and lock their accounts in the new apps, all of which launched last month. However, a Sportico analysis suggested that the platforms did not initially offer gambling addiction hotline information, session time data, or the same betting history visualizations – things that are pretty standard for regular online casinos.
Ironically, this lack of responsible gaming safeguards is a direct result of DraftKings, Fanatics, and FanDuel reclassifying prediction markets as financial assets to make them publicly available. Labeling these products as financial instruments places them under the exclusive authority of the Commodity Futures Trading Commission (CFTC), a federal regulator. However, this also shields them from state gambling laws and taxes on gross betting revenue, as they are not labeled as gambling/gaming.
Under the Commodity Exchange Act, the CFTC is not meant to allow event contracts tied to “gaming.” This means that companies operating prediction markets risk undermining their legal position if they adopt comprehensive gambling-addiction protections. Doing so could be interpreted as acknowledging that the products fall outside the CFTC’s jurisdiction, and is in fact a form of gambling.
As a result, DraftKings, Fanatics, and FanDuel avoid using the terms “gambling” and “gaming” within their prediction market apps. Instead, they insist that users are “trading,” not betting. This is even though prediction markets closely resemble sportsbooks in both appearance and structure.
Some Urge the Companies to Address the Lack of Addiction Hotlines
Cole Wogoman, director of government relations for the National Council on Problem Gambling (NCPG – a leading addiction hotline operator and advocacy group), said in a statement that the organization is urging prediction market operators to adopt the same core safeguards required of regulated sportsbooks.
He said that, from a problem-gambling perspective, buying and selling futures contracts through prediction markets is effectively gambling. Such is particularly the case when these contracts are tied to sports – an activity long associated with gambling. Wogoman also explained that the legal classification of prediction markets does not determine whether they can contribute to gambling problems.
FanDuel, which launched a prediction markets app in five states in December, recently added such a hotline, operated by the NCPG. However, references to it still do not explicitly mention “gambling” or “gaming.”
It’s possible that other prediction market providers also launch similar hotlines in the near future, but whether they will also avoid mentioning “gambling” is still unknown.