FanDuel’s prediction markets partner CME Group has confirmed that it plans to launch event contracts on major league sports and college football as soon as Dec. 6.
In a special executive report on Nov. 18, the derivatives marketplaces operator wrote that the Chicago Mercantile Exchange’s Globex electronic trading platform will begin listing sports “swaps” on pro basketball, pro football and college football games.
The filing does not name the NFL and the NBA, instead referring to them in generic terms, but lists the U.S. cities that have NFL and NBA teams. It also includes listings for the “pro football season championship,” so expect Super Bowl markets.
CME Group says sports contracts not ‘gaming’
Markets on those leagues will go live from Dec. 6, pending regulatory approval from the Commodity Futures Trading Commission (CFTC). Starting a week later, on Dec. 13, CME Group will begin listing pro hockey league games and men’s college basketball.
CME Group filed the markets for self-certification with the CFTC on Nov. 19, with a certification date of no later than Dec. 5.
CME Group noted in its CFTC filing that the commission has the authority via the Commodity Exchange Act (CEA) to prevent the listing of event contracts that involve “gaming,” but that it has not exercised that authority to ban sports-related event contracts. CME Group stated that its proposed contracts do not involve gaming as that term is used in the CEA, and that they are events “with significant financial, economic and commercial footprints rather than the practice or activity of playing games for stakes.”
“Such sports-related event contracts thus have been permitted and continue to trade,” said the operator.
FanDuel Predicts is coming to town
The update from CME Group comes after Flutter announced on Nov. 12 that its new FanDuel Predicts joint venture with CME Group would launch with sports contracts in December. SBC Americas reached out to all parties to clarify whether the intention is for that standalone prediction markets app to be live in the U.S. market with CME Group’s planned sports contracts on the dates listed by CME Group. FanDuel offered no comment.
The language used by CME Group in its report suggests that customers will be able to trade on the outcomes of individual games, as well as on the Super Bowl winner. SBC Americas inquired whether other contracts including prop-style markets will be available. Flutter CEO Peter Jackson said on an earnings call that parlay-style contracts are not likely to be part of FanDuel Predicts’ initial launch but will likely be a “fast-follow” offering.
The sports contracts detailed in the Nov. 18 report will typically be listed only for games scheduled within the next one to three calendar days, and only for the next scheduled game for each applicable team. Each contract size will be $1 and exchange fees will be $0.01.
Flutter’s announcement of FanDuel Predicts also specifically mentioned baseball as well as other major sports, although there was no mention of baseball in CME Group’s Nov. 18 note.
The new era begins
Even in the short time since FanDuel announced the timeline for its launch of sports contracts on FanDuel Predicts, a lot has happened.
Under scrutiny from the Nevada Gaming Control Board (NGCB), FanDuel and DraftKings both gave up any claims to gaming licenses in the Silver State last week. “Nevada [is] protecting their interest, we’re protecting our interest and FanDuel Predicts will allow us to go after the half of the market we hadn’t been able to go after,” noted Jackson.
Days later, the pair of U.S. sports betting leaders walked away from the American Gaming Association (AGA), citing fundamental conflict between the AGA’s stance on sports contracts and the operators’ plans.
Meanwhile, daily fantasy sports giant PrizePicks already offers Kalshi’s sports contracts in 15 states, while state gaming regulators continue to warn licensees about getting involved in prediction markets.
