Competition in the prediction market space is about to kick up several notches. Sports betting giants FanDuel and DraftKings are preparing to enter the arena, taking differing paths to do so. FanDuel is joining forces with CME Group to operate as a Futures Commission Merchant (FCM).
DraftKings has scooped up Railbird, a Designated Contract Market (DCM) that’s regulated by the Commodities Futures Trading Commission (CFTC). While the paths differ, the long-time rivals are aiming for the same goal: making their mark in the booming space.
The arrow is pointing up for prediction markets. Kalshi and Polymarket remain the kings of the hill for now, but have also had the playing field mostly to themselves. By the end of 2025, the FanDuel Markets app is expected to join the party, potentially setting the stage for a whole new ballgame.
FanDuel links arms with CME Group
FanDuel made its prediction market ambitions clear in August, announcing a partnership with CME Group. Plans call for FanDuel to offer trading on event contracts as an FCM via the existing infrastructure of CME, a global behemoth in the derivatives exchange space.
In the press release announcing the deal, FanDuel Group CEO Amy Howe shared some insight into the vision.
“We believe there is potentially a wide audience for trading event-based markets and we want to provide a platform that allows our customers to engage in this activity,” Howe said. “We are excited to be partnering with CME Group to design new and engaging products, combining innovation with best-in-class regulatory compliance and consumer protections.”
FanDuel has opted for a partnership model to enter the space. CME already operates the country’s deepest futures markets and has decades of experience in handling regulatory oversight, reporting, and margin requirements. In short, CME has the path as an exchange, allowing FanDuel to focus on bringing users through the door.
When will FanDuel Markets launch?
FanDuel Markets is expected to make its debut before 2025 comes to a close. When the deal was initially announced, the companies mentioned that trading would be available for a wide range of markets, such as economic data, market indexes, and cryptocurrency price moves.
As CME Group CEO Terry Duffy noted in a recent earnings call, the deal with FanDuel has strong potential to be a win-win for all parties.
“The announcement with FanDuel is very important for CME Group,” Duffy said. We’re looking at 13 million potential accounts that will have access to CME Group’s products, but more importantly, have access to have a view of CME Group and our distribution of our product lines for the future.”
Assuming the process moves on schedule, FanDuel Markets could be live before the end of 2025. Armed with brand recognition, a massive built-in user base, and a partnership with a global derivatives powerhouse, it’s a potential game-changer that could lead to further awareness, adoption, and volume for prediction markets.
Will FanDuel Markets offer sports contracts?
When the partnership was first announced, neither company explicitly mentioned sports would be among the markets to be listed. However, the release did leave the door open, noting “further details of additional offerings to be determined in the coming months.”
A recent report on CME’s plans stated that financial contracts on sports and economic indicators would be launched by year’s end. Duffy provided additional clarity on that during the Q3 2025 earnings call.
“I have said numerous times on podcasts, publicly on television, to you, to others, that my partner at FanDuel, when they are prepared to move forward with events on sports, I would be prepared on day one in order to offer that to them on my DCM,” Duffy said.
There has been ongoing chatter about whether to classify sports contracts as swaps or gaming. Duffy also noted that CME would defer to any decisions made by the U.S. government, and that “we will proceed accordingly.”
Sports contracts have been a massive driver of Kalshi’s soaring growth in 2025. Interest is clearly there for both FanDuel and CME to get in the game, but it’s sounding like “wait and see’ is the move for now.
What is a Futures Commission Merchant?
FanDuel’s deal with CME calls for them to act as an FCM. An FCM is a broker that gives traders access to a regulated exchange or DCM, which in this case is CME. It’s an on-ramp to enter the prediction market space with fewer hoops to jump through.
For an alternative. Look no further than DraftKings’ acquisition of Railbird, a DCM. Thanks to the purchase, DraftKings now has the same type of license used by regulated futures exchanges, clearing the path for them to plan for the launch of DraftKings Predictions.
By contrast, FanDuel doesn’t own an exchange, but can lean on CME’s regulated and compliant structure. As an FCM, they can focus on customer acquisition and the overall user experience, areas in which the company already excels.
Prediction markets keep evolving
It wasn’t too long ago that prediction markets attracted headlines in advance of a major election before fading from consciousness until the next cycle. That time has passed. Prediction markets have exploded in popularity over the past year, and the train isn’t slowing down.
The space can no longer be dismissed as a niche or passing fancy. Prediction markets have entered the mainstream, including references on TV shows and NFL broadcasts, partnerships with major sports leagues, and citations by pundits and reporters when referencing political and economic happenings.
The pending launch of the FanDuel Markets app is yet another sign that they have arrived. FanDuel has successfully navigated its way from its beginnings as a Daily Fantasy Sports innovator to an online gaming giant, with significant market share for both sports betting and casino.
They’re not looking to enter the arena just because it’s hot and competitors are aiming to do the same. We can say the same about CME Group, a global giant that’s not going to make such a move unless something is there. In just a few months, the prediction market landscape could be vastly different. The upcoming FanDuel Markets app has the potential to be a big part of it.
