FanDuel Partners with Derivatives Marketplace to Compete with Prediction Markets
FanDuel has announced a strategic partnership with CME Group, a derivatives marketplace, to jointly launch new event-based financial contracts tailored for a broad retail audience. The initiative centers on the development of fully funded, defined-risk contracts tied to major benchmarks and economic indicators, enabling customers to take simple yes or no positions for amounts as low as $1. This approach aims to leverage FanDuel's extensive customer base alongside CME Group's established reputation for regulated, transparent markets.
LISTEN TO THIS ARTICLE:Under the proposed structure, FanDuel and CME Group will establish a joint venture that operates as a non-clearing futures commission merchant, through which these event-based contracts will be offered to US customers. Trades will be listed on CME Group exchanges and subject to their rules, pending regulatory approval by the US Commodity Futures Trading Commission.
Related: NBA Warns CFTC of Integrity Risks in Prediction MarketsMarket offerings expected later in the year include contracts tied to the S&P 500, Nasdaq-100, oil and gas prices, gold, select cryptocurrencies, GDP growth, and the consumer price index, with further product specifications to be finalized in the coming months.
The partnership reflects a growing demand among retail investors for innovative, accessible financial products. CME Group Chairman and CEO Terry Duffy stated that individual investors are becoming more sophisticated and that combining CME's regulatory infrastructure with consumer education could bring derivatives access to those not currently participating in traditional markets.
FanDuel Group CEO Amy Howe emphasized that the collaboration will enable FanDuel to introduce engaging new offerings that merge regulatory compliance with consumer-friendly innovation.
The announcement comes amid heightened scrutiny of prediction markets that continue to generate regulatory and legal contention in 2025. Kalshi, one of the most prominent US-based prediction market platforms, has become a focal point of legal battles in the year.
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States Continue to Push Back Against Prediction Markets
Although Kalshi received approval from the CFTC in 2020 to operate as a designated contract market and launched its platform in mid-2021, it now faces legal challenges at the state level. A recent decision in Maryland has emerged as the company's first significant legal setback in 2025, even as appeals remain pending.
Similar regulatory actions have been initiated by other states, such as New Jersey and Nevada and even Connecticut is investigating potential state law violations, compounding the growing legal pressure on prediction markets nationwide.
Robinhood has also encountered resistance in its efforts to expand into prediction markets, particularly with football and sports event contracts offered through its Robinhood Derivatives division. The company has filed lawsuits against gaming regulators in Nevada and New Jersey in an attempt to prevent enforcement of state gaming laws.
Robinhood maintains that its event contracts, facilitated under the oversight of the CFTC and offered via a federally regulated futures commission merchant, should be exempt from state wagering restrictions. Earlier this year, the company had withdrawn Super Bowl betting contracts following concerns raised by the CFTC, underscoring the regulatory ambiguity surrounding sports-linked derivatives.
Industry observers and advocacy groups have voiced concerns over the legal status and societal impact of event-based trading platforms. Critics argue that these platforms share similarities with gambling and that classification under financial regulation may obscure their inherent risks.
Opponents caution that the products may sidestep state-level tax frameworks and regulatory controls, while multi-state litigation and regulatory inquiries continue to unfold. Opposition remains particularly potent in markets tied to sports, elections, and economic metrics, where perceived overlaps with gambling and consumer protection issues are most acute.
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