FanDuel and DraftKings have each surrendered their sports activities betting licenses in Nevada as the businesses put together to launch their very own prediction market platforms.
The Nevada Gaming Management Board (NGCB) confirmed the 2 firms had withdrawn their licenses from the state in a press release launched on Wednesday.
The letter stated each firms had voluntarily given up the licenses, however this got here below stress from the NGCB. The playing regulator had beforehand warned licensed sportsbooks about providing prediction markets both in Nevada or different states.
DraftKings and FanDuel have exited Nevada within the pursuit of prediction markets. Picture Credit score: Dongki Koh/Unsplash
Within the assertion on Wednesday, the Board equally famous, “It has been made clear to the Board that Flutter Leisure/FanDuel and DraftKings intend to interact in illegal actions associated to sports activities occasion contracts. This conduct is incompatible with their capacity to take part in Nevada’s gaming trade.”
Esports Prediction Markets Are Wagering, Says NGCB
The letter went on to notice that esports prediction markets are among the many occasion contracts it sees as wagering.
It added, “Examples of occasion contracts that the Board particularly considers to be wagering topic to its jurisdiction embrace occasion contracts primarily based on the end result, in complete or partially, of any sporting occasion, or another occasion, such because the Tremendous Bowl, the World Collection of Poker, the Oscars, Esports, and political elections.“
FanDuel and DraftKings each provide esports betting on their sportsbooks and should make markets obtainable of their new prediction market platforms.
Prediction Market Platforms Getting ready for Launch
When releasing their Q3 earnings stories, each firms confirmed they might be launching the controversial platforms within the coming months.
FanDuel talked about it can provide markets on baseball, basketball, soccer, and hockey by FanDuel Predicts, which launches subsequent month. It additionally stated it can have a spread of non-sporting occasion contracts, together with financials, cryptocurrencies, and extra. If profitable, we might count on esports and all different vital occasions to be coated.
DraftKings, in the meantime, stated it can launch DraftKings Predictions by the tip of the 12 months. CEO Jason Robins was assured the enterprise would succeed, and the corporate is well-positioned to compete with rival platforms.
Within the firm’s Q3 earnings name, Robins said, “That is essentially the most bullish I’ve ever felt about the way forward for DraftKings,” and added, “We are going to pursue this chance, we’ll compete, and we’ll win.”
Firms Place for (Prediction) Market Share
Along with FanDuel, DraftKings Predictions will compete with established platforms, Kalshi, Polymarket, and Crypto.com.
Different firms are additionally planning to enter the area. This week, ProphetX introduced plans to pivot from a sweepstakes mannequin to a prediction market platform. The corporate has utilized for a license from the Commodity Futures Buying and selling Fee (CFTC).
Moreover, PrizePicks gained CFTC approval in September and lately introduced a take care of Polymarket to supply its markets on its platform.
Underdog, in the meantime, has partnered with Crypto.com. Crypto.com additionally made the choice to withdraw from Nevada following an opposed decide ruling in its court docket battle with the NGCB.
Kalshi, nevertheless, continues to supply markets within the Silver State, and its authorized battle with the NGCB stays ongoing.
DraftKings and FanDuel already maintain CFTC licenses by partnerships with Railbird and CME Group, respectively.
Gamble Away Nevada to Win California, Texas, and California
The potential of providing markets to customers in California, Texas, and Florida, in addition to different states that haven’t but legalized on-line sports activities betting, has been a giant draw for firms. Entry to those states might come on the expense of established on-line markets, nevertheless.
Nevada has a comparatively low charge of on-line sports activities betting in comparison with different states. The American Gaming Affiliation (AGA) notes that “Not like in numerous different states the place on-line sports activities betting accounts for 95 % or extra of income, cell sports activities wagering accounted for simply 59 % of Nevada’s complete sports activities betting income in 2024.”
The sacrifice of the Nevada marketplace for entry to the remainder of the nation might subsequently make sense. If different states comply with Nevada’s instance, nevertheless, it may complicate issues for FanDuel and DraftKings, which maintain the lion’s share of the net betting market.
