FanDuel and DraftKings exit Nevada over prediction markets conflict

• FanDuel has surrendered its Nevada sports betting licences following warnings from state regulators regarding prediction market bets.
• DraftKings has withdrawn its application for Nevada sports betting licences, citing concerns about regulatory compatibility.
• Both companies plan to launch prediction market platforms in states without legal sportsbooks, despite regulatory opposition in Nevada and elsewhere.

FanDuel’s parent company, Flutter Entertainment Plc, surrendered its sports betting licences in Nevada after the Nevada Gaming Control Board (NGCB) warned that prediction market bets are incompatible with maintaining a Nevada gaming licence.

DraftKings also voluntarily withdrew its inactive application for Nevada sports betting licences due to regulatory concerns connected to prediction markets. Both companies are preparing to launch new prediction market platforms outside Nevada.

The NGCB accepted FanDuel’s surrender yesterday (November 12).

“It has been made clear to the Board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts. This conduct is incompatible with their ability to participate in Nevada’s gaming industry.“

Nevada’s stance on prediction markets

Nevada is among several states that regard sports event contracts on prediction markets as unauthorised wagering under state gambling laws. The NGCB issued a formal notice clarifying that only operators holding a nonrestricted gaming licence with sports pool approval may offer such contracts in the state.

The board described prediction market bets as “unlawful activities related to sports event contracts” incompatible with Nevada licensure. FanDuel and DraftKings agreed to surrender or withdraw their licences and applications, ceasing any current or planned sportsbook operations in Nevada.

FanDuel Predicts

FanDuel’s new prediction market app, FanDuel Predicts, developed in partnership with CME Group, is set to launch in December. It will allow customers to trade event contracts on sports outcomes, global benchmarks, and economic indicators in states where mobile sports betting is prohibited.

Commenting on the new launch, FanDuel CEO Amy Howe stated:

“We can’t wait to bring FanDuel’s proven approach to market innovation into this dynamic sector. Our partnership with CME Group allows us to leverage their deep market expertise built over decades while delivering the seamless, accessible experience our customers expect.”

CME Group’s CEO Terry Duffy added:

“Our new event contracts on benchmarks, economic indicators and now sports will appeal to a new generation of potential participants who are not active in these markets today. This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.”

DraftKings Predictions

DraftKings is also looking to enter prediction markets. The operator acquired federally regulated prediction market platform Railbird in October 2025 to support its expansion into event contracts.

The company plans to debut DraftKings Predictions by early 2026, targeting markets beyond states that allow legal sports betting.

At the time of the announcement, DraftKings CEO Jason Robins commented:

“We are excited about the additional opportunity that prediction markets could represent for our business. We believe that Railbird’s team and platform—combined with DraftKings’ scale, trusted brand, and proven expertise in mobile-first products—positions us to win in this incremental space”.​

DraftKings’ co-founder Matt Kalish is to step down from his executive position in March 2026, signalling a clear change of business direction and leadership at the very top of the American operator.

Conflict in other states

The clash between traditional gaming regulations and federally regulated prediction markets is not limited to Nevada.

Multiple states, including New York and others with active casino industries, have issued warnings or legal actions against operators offering sports event contracts outside their gambling frameworks.

For example, Nevada issued a two-page industry notice prohibiting partnerships involving event prediction markets, threatening licence suspensions or revocations.

Some states consider prediction markets to violate their gaming laws despite the Commodity Futures Trading Commission’s regulatory oversight at the federal level. Legal disputes, including lawsuits from platforms like Kalshi, are progressing through the courts.

What’s next?

This unfolding regulatory tension shows a critical juncture for operators, regulators, and investors in the US iGaming sector. As major firms pursue prediction markets to expand customer reach, states face pressure to clarify or overhaul legislative frameworks.

The outcome will shape future competition, innovation, and interstate regulatory cooperation. Operators may need to balance growth ambitions with evolving legal risks, or pick only one direction, while regulators must reconcile state gaming interests with federally approved derivatives markets and tax collection.

Sources: Financial Times, Sports Yahoo, The Wall Street Journal