FanDuel’s plan to offer a prediction market in the U.S. has caused consternation for gaming regulators in Nevada, who questioned Flutter officials about their plans to step into the world of event contracts.
On Thursday, less than 24 hours after FanDuel announced it is partnering with derivatives marketplace CME Group, Nevada Gaming Control Board (NGCB) Commissioner Brian Krolicki quizzed Flutter’s private counsel Erica Okerberg and FanDuel SVP of Public Policy & Sustainability Cory Fox.
The NGCB, which is currently embroiled in a lawsuit with leading prediction market operator Kalshi and another with Robinhood in the event contract game, could not hide its concern about what may lie ahead.
‘Of course’ Flutter is considering sports contracts
FanDuel’s announcement made no mention of offering sports contracts with CME Group, instead citing markets such as stock markets, oil and gas prices and gold. FanDuel did not comment on whether sports could follow in the future when asked by SBC Americas.
But, in Thursday’s meeting in Nevada, Okerberg stated explicitly that while no firm decisions have been made on what contracts might be offered, sports are under consideration.
“Those could range from traditional commodities like gold, and then, of course, they are looking into and considering whether sports contracts might be something that could be offered in certain jurisdictions in compliance with those local laws,” Flutter’s legal representative said.
She stressed that Flutter would run any operational decisions past the NGCB.
FanDuel still not ruling out Kalshi deal
Asked directly by Krolicki whether Flutter’s deal with CME Group is exclusive, Fox said he does not believe that it is, at least not at this stage.
Before the CME Group was announced, reports suggested that FanDuel was in talks with Kalshi about the two operators potentially working together in some capacity.
Okerberg confirmed those rumors, noting that Kalshi was one of “lots of different people” that Flutter spoke to.
Notably, Okerberg added that while Flutter or FanDuel has not struck any agreement or transaction with Kalshi, a future relationship with Kalshi has not been ruled out.
This is most irregular
Krolicki emphasized that the NGCB is in “a very sensitive spot” when it comes to event contracts. Given the lawsuits that rage on, that may be an understatement.
“I want to be very mindful and courteous as you all have been a great licensee, but you’re moving in the direction of CFTC oversight,” he noted. “I think you understand that we are in a position of litigation.” He noted that new litigation involving the NGCB arose only the day prior, Aug. 20, seemingly a reference to Kalshi’s partner Robinhood suing each of the NGCB and the New Jersey Division of Gaming Enforcement.
FanDuel does not offer online sports betting in Nevada and is licensed only to supply information services. It provides its market access partner Boyd Gaming with branding and oddsmaking at Fremont Hotel & Casino in Las Vegas. Okerberg clarified that the prediction market deal will not involve Boyd in any way, and encouraged the NGCB that Flutter’s licenses in Nevada and elsewhere in the U.S. “remain paramount and their primary focus of business.”
Still, said Krolicki, the NGCB can’t help but find this bothersome.
“It’s concerning when you’re walking up to the door, participating in these prediction markets when certain activities, if not the predominance of activities, are in conflict with this state and our Gaming Control Act,” he said. “Why should this not concern this commission today?”
Whose side are you on?
Krolicki added that, until the courts resolve the issue, the CFTC is in conflict with the state of Nevada and other gaming jurisdictions.
“To reconcile complying with federal and state matters, that’s not possible today. So, I gently and respectfully remind you, your licensees here are important to us. I think it’s important to you. Something’s out of the barn door already. But there is much at stake. Just for the record, there’s profound sensitivity on these activities. We may not like the ultimate outcome in the courts, but until we have that definitively, we’re watching and this is unpleasant for all.”
If things come to crunch time and FanDuel has to decide between opposing opinions from the CFTC and Nevada, whose side would Flutter be on?
Okerberg, understandably, did not answer that question from Krolicki frankly, reiterating that Flutter would consult with its Compliance Committee and come back before the NGCB “for further discussion before launch.”
Thanks for the heads-up
NGCB Chair Jennifer Togliatti ended the back-and-forth by noting she appreciated Flutter showing up to discuss the issue.
“What I think I’ve heard is, ‘We’ll run it by compliance and we’ll talk to you first before we sue you in federal court, or at least talk about it,'” she added, lightheartedly.
“I don’t think the company is quite going that far,” Okerberg responded, laughing. Fox added that there is “absolutely no intention to file suit anywhere.”
“Look, it is what it is,” added the chair. “Sometimes, regulators and licensees can’t agree and folks have to do what they have to do, but it is a respectful, collegial thing for you to do to come before us and say, ‘Hey, we’re looking at this, let’s talk about it.'”
