TLDR
- FanDuel and DraftKings have left the American Gaming Association to pursue prediction markets
- The AGA opposes prediction markets, viewing them as unlicensed gambling that should be regulated
- Both companies announced plans to launch sports prediction markets in their Q3 earnings reports
- Prediction markets operate in 50 states under the Commodity Futures Trading Commission, not as gambling
- Nevada regulators strongly oppose prediction markets and consider them illegal gambling under state law
FanDuel and DraftKings confirmed Monday they are leaving the American Gaming Association. The two largest sports betting operators in the United States made the decision as they expand into prediction markets.
The companies announced plans to launch sports prediction markets in their Q3 earnings reports. This move conflicts with the AGA’s position on the new betting format.
The AGA and several of its members oppose prediction markets. They argue these platforms should be regulated as gambling.
Prediction markets currently operate in all 50 states under the Commodity Futures Trading Commission. They are not treated as gambling products under current federal regulation.
FanDuel released a statement explaining their decision. The company said it values industry partnerships but recognizes its prediction market expansion does not align with the AGA’s priorities.
“FanDuel has always been the company that moves quickly,” the statement read. The company referenced its history moving from daily fantasy to mobile sports betting.
DraftKings issued a similar statement. The company said its business strategy evolution, including prediction markets, no longer fully aligns with the AGA’s direction.
The AGA accepted both departures effective immediately. A spokesperson said the organization wishes them well and expects to maintain close ties.
FanDuel and DraftKings quit the American Gaming Association, citing a clash over prediction markets, according to CNBC.
The AGA plans to ban members offering prediction markets as those platforms surge in popularity.https://t.co/95AhL4HUFI
— Sports Business Journal (@SBJ) November 18, 2025
The Prediction Markets Boom
The prediction markets industry has grown rapidly over the past year. Kalshi, a leading platform, now sees over one billion dollars traded weekly on sports event outcomes.
Kalshi functions largely as a sports betting exchange. More than 90% of its trading volume comes from sports since football season began.
State regulators have taken notice of the growth. Several states have sent cease-and-desist letters to prediction market operators in recent months.
The letters claim these platforms offer sports betting without proper licenses. The legality of prediction markets is now being tested in federal and state courts.
Legal challenges may take years to resolve. There is no guarantee sports betting through prediction markets will be eliminated.
Industry Response and Competition
FanDuel and DraftKings faced a choice about market entry. They could wait for legal clarity or enter the market now.
Both companies chose to launch prediction market products. They are not alone in this decision.
Fantasy pick’em apps like PrizePicks and Underdog have already launched prediction markets. Crypto platforms and sweepstakes casinos have announced plans to enter the space.
Truth Social also announced prediction market plans. Polymarket’s US-facing launch is expected soon.
The relationship between the AGA and these companies has historical tension. FanDuel and DraftKings disrupted the industry over a decade ago as daily fantasy sports operators.
They were not part of the AGA then. They faced pushback from legacy gaming interests at that time.
Both companies handle their state lobbying through the Sports Betting Alliance. The split with the AGA likely will not affect their efforts in states without legal sports betting.
Nevada has taken a strong stance against prediction markets. The Nevada Gaming Control Board considers sports prediction markets illegal gambling under state law.
FanDuel and DraftKings withdrew all pending sports betting license applications in Nevada. They are not licensed for retail or mobile sports betting in the state.
Nevada opposes prediction markets because they operate under federal CFTC regulation. The state views them as unregulated gambling that evades state gaming laws.
