The CEO of FanDuel’s parent company Flutter told investors and analysts on Wednesday that the company is “closely monitoring” the prediction markets space and feels its existing exchange betting product would give it an edge.
Peter Jackson said on Wednesday’s call that futures markets, the kind of which are offered by Kalshi and Robinhood, offer “potential direct and indirect opportunities for FanDuel to explore.”
Jackson pointed to the Betfair Exchange that Flutter operates in Europe which allows customers to bet against each other rather than a bookmaker.
“We know this space well,” Jackson added. “The Betfair Exchange has for many years given us very good insights on how this space can play out.”
The CEO added that Flutter has moved some of its team who have experience in building out the Betfair Exchange business and onto the FanDuel team “to help us evaluate the opportunity.”
He stopped short when asked whether Flutter could look to register the Betfair Exchange with the Commodity Futures Trading Commission (CFTC).
“We’re not going to take you through all the details of how we’re thinking about tackling the prediction markets. There’s a bunch of different ways we can we can think about it. And when we’re ready to share that, we’ll tell people what we’re going to do.”
Potential greatest in non-sports betting states?
FanDuel is the U.S. market-leading sportsbook with 43% of the American legal sports betting market by gross revenue, per Flutter’s latest earnings report. It currently offers online sports betting in around two-dozen states.
Jackson suggested that offering a prediction market product in states where FanDuel operates mobile sports wagering wouldn’t have much of a positive impact. Where it could boost FanDuel’s operations, as long as prediction markets’ legality under CFTC regulation is validated, is in states where online sports betting is not available, such as California, Texas, Georgia and Minnesota.
“In states that haven’t regulated, there’s a sort of prime-the-pump type of opportunity,” Jackson opined. “We’re interested in the potential opportunity … If there is any benefit we get from prediction markets encouraging faster rollout, we’ll take it, right? We would love to make our product available more broadly to more customers.”
On the same day that Jackson made his comments, the D.C. Circuit Court of Appeals granted the CFTC’s request to dismiss its case against Kalshi regarding election-related event contracts, ending a nearly year-long battle. Signs are suggesting that the incoming CFTC regime feels much more positively about prediction markets than the previous iteration did.
Lack of parlays limits predictions potential
Like other major sportsbooks, FanDuel’s success has been fueled by the popularity of high-margin parlay bets. Multiple prediction market operators now offer contracts that resemble sports futures, single-game wagers and even some prop bets, but Jackson noted that the vital parlay product is difficult to replicate.
“We can see how important the parlay mix is to a U.S. audience and, of course, you can’t access that in the same way with something like the exchange,” he added.
That’s a shortcoming of the prediction market product that was also noted by BetMGM CEO Adam Greenblatt last week.
Other operators also eyeing opportunity
As the situation continues to evolve, FanDuel is far from the only sportsbook keeping a watchful eye on how things develop.
Greenblatt sounded less keen than Jackson, suggesting that sports event contracts represent both risk and opportunity and that BetMGM would only participate “if required.”
PENN Entertainment CEO Jay Snowden said on Thursday that while prediction markets are not a priority for the company, “if it ends up as an opportunity for the industry, you can expect us to be participating.”
Earlier this spring, FanDuel’s closest rival, DraftKings, withdrew an application it filed last year with the National Futures Association for a new business to be known as DraftKings Predict.
Affiliates see potential, too. Gambling.com Group CEO Charles Gillespie said in March that he sees a “clear, strong positive” for the company when it comes to prediction markets’ expansion into sports.
And just last week, U.S.-based exchange Sporttrade asked the CFTC whether it can be licensed as a prediction market, which would allow it to operate in all 50 states.
