European Success Drives Interest in Flutter
Flutter CEO Peter Jackson openly discussed the company’s interest in launching a US prediction market platform during an earnings call earlier this year. He cited the success of the company’s UK betting exchange, BetFair.
“We're very thoughtful about it, particularly having seen so much success in terms of having the best product (BetFair) in the market,” Jackson shared with investors during the call.
This overseas success gives Flutter an edge over top US rival DraftKings, which has also been showing interest in launching a sports prediction market of its own.
FanDuel Betting on CFTC Overruling States
If reports about FanDuel and Kalshi meeting are accurate, it would send a strong message to the rest of the industry. That’s because of the precarious legal status that prediction markets currently occupy.
Many states have shown they do not want these markets, but there is a question over their right to do so. Kalshi has argued that these markets constitute commodity trading and therefore, fall under the authority of the Commodity Futures Trading Commission (CFTC).
While the federal regulator hasn’t said much on the topic, the nominee to take over leadership has ties to Kalshi and is a strong supporter of the industry. If the nomination succeeds, it would likely mean that the CFTC would not allow states to ban operators like Kalshi in a blow to the rights of states.
Move Could Fray Sportsbook Alliance
FanDuel’s potential to dominate the sports betting and sports prediction industries is tempting for investors and leadership. However, it could have an unintended consequence for its sportsbook.
The operators are one of the leaders of the Sports Betting Alliance (SBA), helping to push back against efforts to raise tax rates on the industry. They most recently took center stage in Illinois, where they announced a new surcharge on all bets after a controversial new tax was passed. DraftKings followed their lead, but the rest of the operators have yet to follow.
If operators believe that FanDuel is going to enter the sports prediction market industry, they may no longer be willing to stand alongside them when fighting state lawmakers. Smaller operators are already fighting over the scraps left over by FanDuel and DraftKings. If the industry leaders expand into sports prediction markets, it could further cut profits and lead to several smaller operators shutting down.
