FanDuel, DraftKings Focus on Predictions
With their exit, FanDuel and DraftKings show their dedication to the prediction market industry. Their refusal to work towards a solution with the AGA clearly had its limits, with the operators unwilling to sacrifice their investments in prediction markets.
The pair of operators has dominated the US sports betting market. They account for over 80% of the market share, making their influence far greater than the rest of the industry. That success means they don’t need to rely on the AGA, giving them little reason to sacrifice their focus on prediction markets.
This isn’t the first sacrifice DraftKings and FanDuel have made over the controversial industry. The operators saw their applications to join the Nevada market rejected due to plans to offer sports contracts. Other states have issued similar warnings, meaning the duo may end up sacrificing far more before launching their new platforms.
Significant Loss for the AGA
While the AGA still has plenty of members, losing its two biggest will limit its influence with lawmakers and the public. Not only do they lose the resources, but also the power of two platforms that own almost the entire US market share.
Losing those operators is one thing, but having them line up against you is another. While FanDuel and DraftKings have no plans to join any other groups, they are expected to lobby hard on behalf of sports prediction markets. That means all their influence and resources will now be put to work against some key AGA interests.
Other Reasons Could Have Led to Departure
The AGA can’t be blamed for refusing to negotiate over prediction markets, but it does share some responsibility for the departure of its two most prominent members.
Over a year ago, the AGA shifted its focus to expanding membership into other gambling industries. That put online and retail operators from the worlds of casino, sports betting, and slot games together. This helped expand the group’s influence, but also made it impossible to keep its membership happy.
Operators have different goals and interests that sometimes conflict with those of their rivals. That makes it hard for the AGA to get much done, and could have led to its two largest members choosing to exit the group entirely.
