DraftKings, FanDuel Calling Regulator’s Bluff
Several US states have had their regulators reach out to online sportsbooks over sports contracts. They warned that they would review and possibly revoke state licenses from operators offering sports prediction markets anywhere in the US. Several made it clear that licenses could be lost even if operators keep their prediction platform out of their markets.
While FanDuel and DraftKings spent a lot of time talking about the importance of their relationships with regulators, a more aggressive message was clear. They both specifically stated they would not operate in legal sports betting markets, which runs counter to the warnings.
It appears the operators believe regulators will cave in order to protect their markets, forcing them to either enforce their warnings or admit defeat.
Nevada Pulls Applications
The Nevada Gaming Control Board (NGCB) was among the regulators warning sportsbooks about sports contracts. Unlike its peers, it wasted no time in backing its strong words up with action.
The NGCB announced that it has officially dropped applications from DraftKings and FanDuel to offer online sports betting in the state. The operators acknowledged they had expected the move and expressed understanding for the NGCB’s decision.
While this seems like a loss for the two industry-leading sportsbooks, it may not actually mean much. Both operators have been working to enter the market for some time, but have run into opposition as Nevada seeks to protect local operators. That made their chances of launching in the market slim, making the decision to sacrifice the applications far easier.
FanDuel Puts Focus on Problem Gambling
Unlike so many other prediction market operators, FanDuel spent a lot of time talking about problem gambling. The industry’s lack of regulations and protocols has many responsible gaming advocates concerned that it will further fuel the spike in problem gambling. Many key proponents of sports contracts have argued that users should be allowed to spend their money as they see fit, but not on FanDuel.
The company has promised to make its industry-leading problem gambling tools available on its prediction market platform. This is something rivals like Kalshi and Polymarket don’t have —and may not offer anytime soon. That could pay off for FanDuel when the government finally cracks down on the emerging industry, putting them in a position to expand their dominance to sports contracts.
