FanDuel, DraftKings Leaving AGA Over Prediction Markets Dispute

^{DraftKings and FanDuel are officially leaving the American Gaming Association as the two sportsbook operators look to expand into the prediction market space. (Photo:  Richard B. Levine / Sipa US via Alamy)}

The two leading American sportsbook operators are leaving the country’s most influential gambling trade group, as FanDuel and DraftKings each announced this week that they will be ending their memberships in the American Gaming Association (AGA).

The companies are parting ways with the AGA over their ambitions to join the growing prediction market industry, something that the AGA has publicly opposed.

Companies Say They’re ‘Not Aligned’ with AGA Priorities

Both operators also recently agreed to drop efforts to obtain gaming licenses in Nevada after regulators declared that sports-based prediction markets – regulated by the Commodity Futures Trading Commission (CFTC) at the federal level – would be illegal sports betting under Nevada law. 

While platforms like Kalshi and Polymarket currently dominate the prediction markets space in the United States, both FanDuel and DraftKings are planning to jump into that arena, with FanDuel partnering with the CME Group on its launch.

However, the AGA and many of its members share the opinion of many state regulators, saying that prediction markets should be regulated as gambling products, especially when they offer sports-based contracts. That stance inevitably put the organization at odds with FanDuel and DraftKings.

“As we expand into prediction markets, we recognize this direction is not aligned with the American Gaming Association’s current priorities for its member operators," a FanDuel spokesperson told The Closing Line on Monday night. "After thoughtful consideration, we have decided to step back from our AGA membership at this time."

DraftKings echoed those comments, saying that the move was prompted by disagreements with the AGA over the direction the company is taking.

“As the company’s business strategy evolves – including with prediction markets – DraftKings determined that its plans no longer fully align with the AGA’s direction in certain areas and have decided to relinquish its membership,” DraftKings said in a statement. 

AGA Hopes to Maintain Working Relationship with Both Companies

The AGA has stood firmly against the rise of prediction markets. According to an individual who spoke anonymously with CNBC, the organization plans to formally bar companies from membership if they offer prediction markets in a board meeting scheduled for next Tuesday. 

For its part, the AGA said they accept both companies’ withdrawals and hope to continue to have a working relationship with them.

“In discussion with DraftKings and FanDuel, the AGA has accepted their request to relinquish their membership, effective immediately,” the AGA said in a statement. “We wish them the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming.”

FanDuel says that it plans to open its prediction market in states where it does not hold a sports betting license later this year. DraftKings recently acquired Railbird, a company that is licensed to offer event contracts under the CFTC.