FanDuel and DraftKings, the two largest names in the U.S. online sports betting sector, have formally withdrawn from Nevada, marking a significant regulatory standoff over the classification and legality of prediction markets.
This pivot highlights a broader strategic shift as both companies prioritize the growing national market for prediction trading over compliance with Nevada’s strict state gaming laws.
The Nevada Gaming Control Board (NGCB) confirmed that FanDuel’s parent company, Flutter Entertainment, has surrendered its Nevada licenses, while DraftKings has scrapped all pending license applications.
This decision stemmed from an agreement with state regulators, who warned that the companies’ plans to offer “sports event contracts”, a core component of prediction markets, violated Nevada’s established gaming laws.
Nevada regulators view these prediction markets, where users trade contracts on various outcomes, as a form of sports betting and are unwilling to grant exceptions.
FanDuel confirmed its withdrawal is a strategic realignment, focusing its resources on the soon-to-launch FanDuel Predicts app. This platform is designed to allow users in non-sports-betting states to buy and sell contracts on sporting and economic outcomes, operating under a different legal framework.
FanDuel stated its focus now aligns with the federal structure that supports innovation in prediction markets, confirming the new app will include strict responsible gaming features.
DraftKings is pursuing a similar path, confirming it has ceased its Nevada license efforts to focus on launching DraftKings Predictions, a new product built after acquiring event-contract startup Railbird.
DraftKings’ leadership believes prediction markets should be regulated by the Commodity Futures Trading Commission (CFTC), rather than state gaming boards.
This long-term strategy reflects a bet that prediction markets could evolve into a high-growth, federally overseen hybrid space, potentially opening up vast, untapped state markets like California and Texas where traditional sports betting remains illegal.
Jen Aguiar, Chief Compliance Officer at DraftKings:
The decision was made “to maintain full regulatory compliance while engaging with federal authorities.”
