On a day AGA CEO Bill Miller lambasted prediction markets as illegal and a threat both tribal and commercial gaming, the heads of two online sports betting companies straddled the fence on whether they will go in that direction and declined to call for their ban.
The appearance of Jason Robins, CEO of DraftKings, and Peter Jackson, CEO of Flutter Entertainment, parent company of FanDuel, was in sharp contrast from the AGA’s Bill Miller, who took the stage just before them.
Robins has previously said DraftKings continues to monitor the prediction market, but is keeping their strategy close to the vest for now.
FanDuel, meanwhile, has announced a partnership with the Chicago Mercantile Exchange, the CEM Group, for financial-related transactions, but hasn’t ruled out going beyond that into sports betting.
Prediction markets are under fire from tribal casinos and states where sports gambling is legal over fears it would cut into investment and revenue in their states and trigger job losses. The operators, facing lawsuits across the country, claim they fall under the auspices of the federal Commodity Futures Trading Commission, which so far has taken a hands-off approach to sports wagering.
Robins doesn’t expect prediction markets to take hold in markets where sports gambling is legal, given the legal product is much stronger and a better experience. He doesn’t see it taking market share from DratKings.
When asked by moderator Hope King if prediction markets should be illegal and shut down, Robins passed on that question, to the laughter of the audience. “We’re just trying to figure out the rules of the road and participate within those. Having that type of clarity would be helpful.”
Nevada gaming regulators warned Flutter Entertainment officials this summer to stay away from the sports prediction markets after its FanDuel brand announced it’s teaming up with CEM Group, the largest U.S. derivatives exchange. The online gaming company will offer bets on stocks, commodity prices, and inflation, which are expected to launch later this year.
The bets “will be framed in a way that makes them regulated financial products, rather than wagers in a state-supervised casino,” according to the parties. Customers will be able to express their views multiple times a day on a wide range of markets with simple “yes” or “no” positions for as little as $1
Chicago-based CME is registered with the CFTC, much like Kalshi that began launching sports contracts earlier this year. Kalshi is among those locked in a legal battle with Nevada gaming regulators after it received a cease-and-desist order from operating in the state.
When asked by King about its deal with CME Group, Jackson said they have a background with the Betfair exchange it operates around the world. “We’re being very thoughtful and seeing where the regulations are going.”
Jackson was also asked about the $2 billion investment in prediction market company Polymarket by the owner of the New York Stock Exchange and didn’t express concern.
“We’re very well placed, irrespective of which path we end up following,” Jackson said. “Because of our capabilities, relationships, partnerships, brand, and distribution here in the States, I’m excited about it. And I can see why people are willing to get into the market.”