During a first-quarter earnings call, Flutter, the parent company of sportsbook FanDuel, discussed launching prediction markets.
CEO Peter Jackson states that Flutter is "closely monitoring" the growth of prediction markets around the US and could use its Betfair brand to enter the prediction market game in the US: "We’re interested in the potential opportunity, we have brought some of our team who have experience in building these products and services from the Betfair exchange business and put them into FanDuel to help us evaluate the opportunities."
This close monitoring could signal a massive shift in the sports gambling industry across the US as books try to enter previously untapped and lucrative markets like California and Texas.
See our FanDuel sportsbook review to read why we gave them top marks for same-game parlays as well as payout speed.
Why Would FanDuel Want To Enter The Prediction Market Space?
Prediction markets such as Kalshi or Polymarket have seen immense growth by tapping into US presidential election odds and entering the sports gambling world with sports event contracts.
At the time of writing, Kalshi is seeing an incredible $60 million in volume on a single market; will the Indiana Pacers or the Cleveland Cavaliers win their NBA playoffs series?
Kalshi is a federally regulated exchange platform and byes state-level gaming regulations. Only the Commodity Futures Trading Commission (CFTC) can decide if Kalshi's sports event contracts are legal, a fact that has not been lost in the legal system.
The exchange platform has received positive legal rulings in Nevada and New Jersey, where district courts agreed that Kalshi falls within the CFTC's jurisdiction. It also saw the federal regulator drop an appeal in D.C., yet another win for the prediction market operator.
Prediction Markets Legal Wins
These developments have effectively opened the path for prediction markets to operate legally across the US, so long as they can receive a federal license from the CFTC. Seeing Kalshi's legal wins, SportTrade has filed for such a federal license, and it seems Flutter might be thinking about doing the same.
Getting Into New Areas
Getting into prediction markets could see Flutter and its FanDuel brand enter markets that are currently barred to them. Massive markets like California and Texas, the two largest states in the union, have both been resistant to allowing legal sports gambling.
California voters have routinely voted down constitutional amendments to bring sports gambling to the Golden State. In 2022, 82% of voters said "No" to Proposition 27, which would have allowed sportsbooks to partner with tribes and operate in the state.
In Texas, Lieutenant Governor Dan Patrick has consistently stated that his GOP caucus does not legalizing sports gambling in his state.
Flutter could get around these restrictions by entering the prediction market business.
