FanDuel and DraftKings, two of the biggest online sportsbooks in the USA, have officially quit the American Gaming Association (ASA) – the leading trade union for casinos, sportsbooks and gaming providers.
The move follows the booming prediction markets that have seen competitors such as Kalshi and Polymarket flourish. They allow players to trade on events such as news, politics and cultural events etc, however the ASA have taken a firm stand against these markets.
As such, the two popular companies announced their decision in separate announcements due to the direction of online betting taking a different direction to the one the trade organization has.
A spokesperson for Flutter Entertainment, the company that owns FanDuel, said in a statement: “We recognize the direction is not aligned with the AGA’s current priorities for its member operators. After thoughtful consideration, we have decided to step back from our AGA membership at this time.”
Meanwhile a spokesperson for DraftKings told CNBC a similar message. They stated: “As the company’s business strategy evolves – including with prediction markets – DraftKings determined that its plans no longer fully align with the AGA’s direction in certain areas and have therefore decided to relinquish its membership.”
In response, the AGA accepted both companies’ decision to relinquish their membership. That statement added that: “We (ASA) wish them all the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming.”
Earlier this month, Flutter announced the launch of FanDuel Predicts – a mobile game that is set to be released in December, where players can bet on the outcome of a range of events.
However, they are considered trading platforms – and not gambling – thus being available for players located in states where sports betting is still illegal, such as California and Texas.
Speaking at the time of the announcement, Flutter CEO Peter Jackson explained why the company is launching the product:
“Prediction markets are regulated by the Commodity Futures Trading Commission,” explained Jackson. “And in our partnership with the CME Group, who we have partnered with to launch this product, we’re going to make these products, the sports products, available in all the states where FanDuel does not have a sports betting license.”
Similarly, DraftKings recently announced the purchase of predictions platform Railbird – something that is soon rumoured to be changing its name to DraftKings Predictions.
All this follows both companies voluntarily giving up their Nevada gaming license over a similar conflict with the state gaming regulators’ views on prediction markets.
Other states seem to be following suit as they have sent a number of cease-and-desist letters to operators of this product.
However, the strong feeling of FanDuel and DraftKings, who are still represented by the Sports Betting Alliance, shows that they feel these prediction games might be the best way forward.
