FanDuel Lands FCM License Independent of CME Partnership

FanDuel has secured a futures commission merchant (FCM) license through the National Futures Association, paving the way for the gaming giant to directly broker event contracts and expanding its reach into financial derivatives.

That regulatory approval paves the way for FanDuel to take direct economic control over its prediction market operations—and likely escalates tension in its high-stakes relationship with CME Group (NASDAQ: CME), the majority owner of the FanDuel Predicts platform.

An FCM designation allows an entity to directly solicit, execute, and hold funds for customer futures and options orders. Because the Commodity Futures Trading Commission (CFTC) classifies event contracts as swaps, gaming operators must secure FCM clearance to broker these trades directly.

Shift in the CME Relationship

While FanDuel has not publicly detailed how the license impacts its CME partnership, the relationship has grown increasingly strained.

Earlier this year, FanDuel partnered with Crypto.com’s OG Prediction Markets, subsequently shifting high-volume novelty and sports event contracts to that platform in August. That pivot left the CME partnership anchored primarily to financial derivatives, which draw far lower trading volume than sports swaps.

When FanDuel and CME launched FanDuel Predicts in December 2025, CME acquired a 51% controlling stake and a 50% split of gross revenue. However, FanDuel absorbed 100% of the marketing, promotional, and technology costs—explaining parent company Flutter’s recent drive for greater operational and financial “optionality.”

CME executives have publicly pushed back against FanDuel’s standalone push. CME Chairman and CEO Terry Duffy previously warned that FanDuel securing an FCM license to launch competing products would violate their deal terms, noting such a move is “obviously contractually against what we originally stated with them.”

Exchange Status Remains Separate

While the FCM license represents a major regulatory hurdle cleared, FanDuel is not yet a fully integrated exchange operator.

To host and clear trades independently, a platform must also secure a Designated Contract Market (DCM) permit—which functions like a traditional futures exchange—and a Derivative Clearing Organization (DCO) approval.

While rival prediction platforms are aggressively pursuing this fully integrated exchange model, Flutter has not yet signaled whether FanDuel plans to apply for a standalone DCM license.