FanDuel Predicts: Ins and Outs of New Prediction Markets Entrant

• FanDuel, CME rolling out sports event contracts this month
• FanDuel Predicts, a standalone app, will be available in states where FanDuel doesn’t offer traditional sports betting
• Some analysts believe FanDuel will rapidly become a prediction markets leader

FanDuel Predicts, the prediction markets platform courtesy of the largest US online sportsbook operator, is expected to launch this month, ushering in a new era of prediction markets competition.

With that in mind, now is an ideal time for bettors and traders to get a sense of how FanDuel Predicts will shape up. One big item to note is that the prediction markets offering won’t be part of the standard FanDuel sports wagering mobile application. Rather, it will function as a standalone app.

DraftKings Predictions, the upcoming event contracts platform courtesy of FanDuel rival DraftKings (NASDAQ: DKNG), will follow a similar methodology, indicating the two companies that control the bulk of the US sports wagering market are looking for ways to access big states, such as California and Texas, that currently prohibit sports wagering.

Why FanDuel Predicts Matters

Investors have taken DraftKings and Flutter to task this year on the back of reports that volume is soaring on exchanges such as Kalshi, but the FanDuel owner could be a more-than-credible competitor in the sports event contracts.

For starters, by way of BetFair, Flutter has long-running prediction market experience in Europe. Those competencies are relevant to FanDuel Predicts. Second, FanDuel is one of the most valuable gaming brands in the world, indicating that its attachment to sports event contracts could prove lucrative for the operator over the long term.

CME and FanDuel announced their partnership in August, pledging to bring yes/no event contracts based on economic data and financial markets to the sportsbook’s clients. How that offering evolves will be revealed with time, but it’s expected that the initial iteration of FanDuel Predicts will be sports-centric.

FanDuel Predicts Could Reach PM Podium

Given the aforementioned branding, pricing, and technological advantages, it wouldn’t be surprising to see FanDuel Predicts become a US prediction markets leader, and that’s exactly what some analysts are saying will happen.

Beynon estimates the total addressable market for event contracts platforms from DraftKings and FanDuel to be $5 billion, with sports derivatives accounting for $4.4 billion of that forecast.