CME Group, a major player in derivatives, is entering the sports betting market through a new venture with FanDuel. This initiative allows users to make trades on sports outcomes within a regulated framework.
The newly established platform, named FanDuel Predicts, was announced in November 2025 and is set to launch by December 2025. With a significant investment of $10.2 million, CME now owns a controlling 51% stake in FanDuel Prediction Markets Holdings LLC, establishing itself as a key player in a market traditionally dominated by unregulated operators.
#What is FanDuel Predicts and How Does It Function?
FanDuel Predicts operates under the authority of the Commodity Futures Trading Commission (CFTC), which regulates the contracts associated with event outcomes. These contracts span various professional and college sports, including baseball, basketball, football, and hockey.
A notable aspect of FanDuel Predicts is its capability to function in states where traditional online sports betting is illegal. Because it is governed by CFTC regulations, the platform bypasses the complex and varied state laws that often hinder betting options. However, the platform does not extend coverage to tribal lands.
Additionally, FanDuel Predicts features a phase-out mechanism. As states begin to legalize sports betting, the contracts offered by the platform will gradually disappear, effectively adjusting to the changing legal landscape.
#What are the Future Plans for FanDuel Predicts?
Looking ahead to June 2026, FanDuel Predicts plans to expand its range of offerings through a partnership with Nadex, which is operated by Crypto.com. This integration aims to connect CME’s sports event contracts with the wider cryptocurrency prediction market, potentially attracting a new base of users.
#What Implications Does This Have for Investors?
The expansion into prediction markets is increasingly competitive. While Polymarket leads the crypto side, Kalshi holds a niche in CFTC-regulated events. With CME involved, it combines institutional credibility with extensive regulatory relations, presenting a formidable challenge to its rivals.
For Flutter Entertainment, FanDuel's parent company, this collaboration offers a cost-efficient method to tap into markets where online sports operations are currently prohibited.
The CFTC, however, has demonstrated cautiousness about sports derivatives. Past incidences with Kalshi highlight potential regulatory hurdles that could arise for sports-related contracts similar to those of FanDuel Predicts, particularly if state regulators see it as encroaching on their authority.
Another concern is the potential for market cannibalization. As additional states legalize sports betting, FanDuel Predicts will lose market relevance, given its built-in phase-out feature. Therefore, its total addressable market is constantly shifting as new legislation is enacted.