The company announced Wednesday (Nov. 13) the pending launch of its FanDuel Predicts app, developed in partnership with derivatives market CME Group. Due in December, the app will offer access to sports event contracts for baseball, basketball, football and hockey games.
“In states where online sports betting is not yet legal, customers who are not on tribal lands will be able to trade event contracts on the outcome of sporting events,” the company said in a news release. “As new states legalize online sports betting, FanDuel will cease offering sports event contracts in those states.”
Aside from sports, the app will offer event contracts on things like the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies and economic indicators such as GDP and consumer price index.
“We can’t wait to bring FanDuel’s proven approach to product innovation into this dynamic sector,” said Amy Howe, FanDuel’s CEO. “Our partnership with CME Group allows us to leverage their deep market expertise built over decades while delivering the seamless, accessible and trusted experience our customers expect.”
According to the release, FanDuel will extend its consumer protection program to the new app, offering tools to help manage exposure, track spending and make informed trading decisions. Customers will also get access to educational resources to learn about prediction markets and how to buy and sell event contracts.
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The announcement comes weeks after rival DraftKings acquired Railbird Exchange, which is a federally-licensed exchange focusing on event-based contracts.
“This is the most bullish I have ever felt about our future,” DraftKings CEO and co-founder Jason Robins in an earnings release last week, calling the pending launch of DraftKings Predictions “a significant incremental opportunity.”
As PYMNTS wrote recently, the growth of prediction markets is driven in part by the fact that their makeup allows for a wider range of products: finance, culture, politics, entertainment, weather and sports, all packaged as yes/no contracts or binary outcomes. As of late October, the markets had reached a record high of $2 billion in weekly volume.
“Still, despite the appearance of financial-market sophistication, prediction markets can raise troubling parallels with gambling,” the report added. “That is most apparent when the event contracts track sports competitions, anecdotal political outcomes or entertainment awards. Such structures can resemble bets more than hedges on commodity futures.”
