Following their alliance announced back in August, derivatives markets operator CME Group (NASDAQ:CME) and sports betting outfit FanDuel (part of Flutter Entertainment NYSE:FLUT) have unveiled that they will launch prediction markets through the new FanDuel Predicts app, that the pair say will expand access to financial markets for millions of customers in the United States.
Increasing Event Contracts competition
The new offering will bring CME and FanDuel into competition with Kalshi, off of which Robinhood has based its event contracts “Prediction Markets” offering, which apparently has gotten off to a good start. And it looks like CME competitor Cboe is also getting into the Prediction Markets business, recently hiring former tastytrade President JJ Kinahan, to oversee new alternative investment products for retail customers, including event-based trading.
FanDuel Predicts app
FanDuel Predicts will launch in December as a standalone mobile application. Subject to appropriate regulatory filings, the app will provide access to sports event contracts across baseball, basketball, football, and hockey. In states where online sports betting is not yet legal, customers who are not on tribal lands will be able to trade event contracts on the outcome of sporting events. As new states legalize online sports betting, FanDuel will cease offering sports event contracts in those states. In addition to sports, event contracts will be offered on benchmarks such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies, and key economic indicators such as GDP and CPI.
FanDuel said it will extend its industry-leading consumer protection program to the FanDuel Predicts app. The platform will empower customers to trade responsibly with tools to help manage exposure, track spending and make informed trading decisions. Within the app, customers will find educational resources to learn about prediction markets and how to buy and sell event contracts. Customers may set deposit limits and deposit alerts that apply to all FanDuel products and may self-exclude, just as they can on all FanDuel products today.
Amy Howe, CEO at FanDuel said,
“We can’t wait to bring FanDuel’s proven approach to product innovation into this dynamic sector. Our partnership with CME Group allows us to leverage their deep market expertise built over decades while delivering the seamless, accessible and trusted experience our customers expect.”
CME Group Chairman & Chief Executive Officer Terry Duffy said,
“Our new event contracts on benchmarks, economic indicators and now sports will appeal to a new generation of potential participants who are not active in these markets today. This launch will dramatically expand our distribution and reach, connecting directly with FanDuel’s millions of registered U.S. users.”
When customers sign up for FanDuel Predicts, they will undergo FanDuel’s thorough “Know Your Customer” sign up process providing information including their birth date, Social Security number, home address, banking information and a valid ID. Once the account is created, they will then be able to buy or sell event contracts ranging in price from as little as $0.01 to $0.99.
About The Partnership
This groundbreaking alliance combines FanDuel’s market-leading customer experience and mobile technology with CME Group’s 100+ year expertise in derivatives and risk management, creating a unique platform that bridges entertainment and financial markets.
About FanDuel
FanDuel Group is America’s premier mobile gaming company, consisting of a portfolio of leading brands across mobile wagering including America’s #1 Sportsbook FanDuel Sportsbook, its leading iGaming platform FanDuel Casino, the industry leader in horseracing and advance-deposit wagering FanDuel Racing, and its daily fantasy sports product. In addition, FanDuel Group operates FanDuel TV, its broadly distributed linear cable television network, and FanDuel TV+, its leading direct-to-consumer OTT platform. FanDuel Group has a presence across all 50 states with approximately 17 million customers and 25 retail locations. The company is based in New York with offices in Los Angeles, Atlanta, and Jersey City.
About CME Group
As the world’s leading derivatives marketplace, CME Group enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, cryptocurrencies, energy, agricultural products and metals. The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world’s leading central counterparty clearing providers, CME Clearing.
