DraftKings and FanDuel Exit AGA Over Prediction Market Split
DraftKings and FanDuel formally resigned from the American Gaming Association (AGA). The decision follows a strong disagreement regarding the future of prediction markets within the regulated sports betting industry. Both companies have shifted their business strategy to quickly enter prediction markets, a move that places them in opposition to the AGA’s lobbying efforts. InGame and The Closing Line broke the news.
Shift to Prediction Markets
DraftKings and FanDuel confirmed their intent to launch sports event contracts through prediction markets. This strategic choice forced the split with the AGA. Prediction markets are regulated by the federal Commodity Futures Trading Commission (CFTC), treating them as financial instruments. The AGA has actively lobbied against this federal oversight. The organization argues that prediction markets avoid the state-level regulation and responsible gaming guidelines that legal sportsbooks must follow.
The issue came to a head at a meeting of the AGA’s Public Policy Committee (PPC). Sources indicated the disagreement was so sharp that both operators resigned before any potential vote on their status. FanDuel and DraftKings decided to enter these markets immediately. This choice prevents them from ceding ground to companies like Kalshi, which has seen weekly sports event volume exceed one billion dollars.
A spokesperson for FanDuel sent a statement to InGame late Monday night. “As we expand into prediction markets, we recognize this direction is not aligned with the American Gaming Association’s current priorities for its member operators,” the spokesperson said. “After thoughtful consideration, we have decided to step back from our AGA membership at this time.”
New Product Launches and Regulatory Moves
Both firms have made specific plans to roll out their new prediction market products. FanDuel will launch FanDuel Predicts next month, working with the CME. DraftKings chose to acquire the CFTC-approved platform Railbird. They plan to launch DraftKings Predictions in the coming months.
Due to the new focus on prediction markets, both companies will distance their new platforms from traditional regulated sports betting. They will not launch these prediction platforms in legal sports betting states. They will also use geofencing to exclude the territory of Indian Country. This step keeps their new ventures separate from the state-regulated markets.
A DraftKings spokesperson told InGame the company’s business strategy has evolved. “DraftKings determined that its plans no longer fully align with the AGA’s direction in certain areas and has decided to relinquish its membership,” the spokesperson stated.
Impact on Lobbying Efforts
The AGA accepted the resignations, effective immediately. An AGA spokesperson sent a text statement confirming the move. “We wish them the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming,” the spokesperson said.
Despite the split, both DraftKings and FanDuel are expected to continue lobbying for traditional sports betting through the Sports Betting Alliance (SBA). They are core members of the SBA, along with companies like BetMGM.
In a related regulatory action, both operators are exiting the Nevada market, which is outside the prediction market conflict. FanDuel has already surrendered its Nevada license. DraftKings withdrew its licensing applications in the state. The departures from the AGA remove a key conflict point within the association.
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