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FanDuel and DraftKings are officially backing out of Nevada. No more licensing, no more playing by Nevada’s rules. Instead, both have their eyes fixed on launching prediction markets across the rest of the country. A report read:
“Today, the NGCB accepted the surrender of Flutter Entertainment PLC’s Order of Registration, as well as all related licenses and approvals, including those for FanDuel Sportsbooks and its license as a provider of an information service, and granted administrative approval of requests for withdrawal for all active and pending applications.”
Why Nevada Said No
Nevada has never really been the easiest place for these online operators, and it’s even worse when it comes to prediction markets. The state treats any bet tied to the outcome of a sporting event as straight-up gambling, even if companies claim the federal Commodity Futures Trading Commission has jurisdiction. Basically, if it involves sports results, outcomes on political elections, or even awards, Nevada says, “No thanks.”
The state’s in-person registration rules for mobile sports betting are also a nightmare for online-first companies. Although FanDuel was just there scantily with a single retail sportsbook. DraftKings? Just a small office over on the west end of Las Vegas.
And Kalshi, a small prediction market vendor who tried to make it rain in the Silver State in March, was hit with a cease-and-desist letter. The Nevada Gaming Control Board (NGCB) told FanDuel and DraftKings that running sports event contracts could get them in serious trouble, saying it “would be incompatible with their ability to participate in Nevada’s gaming industry.” Which means, “don’t even think about it.” NGCB said:
“If a Nevada licensee chooses to offer sports event contracts in Nevada or decides to partner with other entities offering sports event contracts in the state, the Board will consider these developments as it evaluates the suitability of the entity to maintain a Nevada gaming license under NRS 463.170.”
It’s true that one man’s food is another man’s poison because BetMGM, Caesars, and Circa will be over the moon that the big two are out of the way in Nevada.
Prediction Markets Are the New Playground
So what are these companies chasing? Prediction markets. DraftKings is rolling out DraftKings Predicts, and FanDuel is launching FanDuel Predicts next month. These platforms let users trade contracts tied to sports, politics, entertainment, and even finance. It’s kind of like betting meets the stock market, and both companies think the opportunity is too big to pass up.
Now here’s what DraftKings has put in place for its next line of business. On October 21, they bought Railbird Technologies and its Railbird Exchange. Railbird already had a federal license with the Commodity Futures Trading Commission, which is kind of a big deal. It means DraftKings can launch prediction markets across multiple states without waiting for each one to give their approval. Basically, they just found a shortcut to play nationwide.
Investors noticed fast, and the stock went up.
But risks are inevitable with dealings of these sorts. That’s why, as the law around prediction markets isn’t completely in the clear yet, courts could still step in. And even with a federal license, some state regulators might try to disrupt the works, like Nevada did.
But that’s not stopping FanDuel, as it’s already partnered with the Chicago Mercantile Exchange Group to get in on the action.
