FanDuel Lands FCM License, But CME Isn’t Involved

On Monday, Flutter Entertainment’s (NYSE: FLUT) FanDuel was approved as a member of the National Futures Association (NFA), securing a futures commission merchant (FCM) license in the process.

That regulatory approval paves the way for FanDuel to gain more economic control over its prediction market operations and potentially further alters the dynamics of the gaming company’s relationship with CME Group (NASDAQ: CME) – the majority owner of the FanDuel Predicts platform.

The FCM designation is necessary for prediction market operators because the Commodity Futures Trading Commission (CFTC), the federal regulator with jurisdiction over yes/no exchanges, classifies event contracts as swaps.

What It Means for CME Relationship

FanDuel hasn’t yet publicly commented on how its FCM licensing could affect its relationship with CME, but it’s clear that the relationship is evolving.

Earlier this year, FanDuel announced a prediction market partnership with Crypto.com’s OG Prediction Markets, which was bolstered by an August announcement in which the Flutter unit said it was shifting novelty and sports event contracts to Crypto.com, leaving the CME partnership focused on financial derivatives, which are not as heavily traded as sports swaps.

FanDuel and CME announced their partnership in August 2025 with FanDuel Predicts debuting in five states last December, but more recently, Flutter has made clear it is seeking more “optionality” around its prediction market efforts. For its part, CME previously said FanDuel can’t just go out and get an FCM license and potentially operate as a competitive threat to FanDuel Predicts.

CME Chairman and CEO Terry Duffy, who expressed concern about sports event contracts resembling traditional betting, said such a move by FanDuel is “obviously contractually against what we originally stated with them.”

CME owns 51% of FanDuel Predicts and commands 50% of the gross revenue, but all of the marketing, promotion and technology costs are handled by FanDuel, underscoring why the gaming company is mulling a prediction market approach that grants it great economic control.

FanDuel Doesn’t Yet Have Its Own Exchange

It’s important to note that the FCM designation isn’t the same as the Designated Contract Market (DCM) license. Companies that want to operate their own exchanges must have DCM permits and also be approved as a Derivative Clearing Organization (DCO).

“DCMs are most like traditional futures exchanges, which may allow access to their facilities by all types of traders, including retail customers,” notes the CFTC. “DCMs may list for trading futures or option contracts based on any underlying commodity, index or instrument. Part 38 of the CFTC’s regulations.”

The vertically integrated exchange model is being pursued across the prediction market industry, but it’s not yet clear if FanDuel will adopt that playbook.