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Fast pace of change
“Welp, things are escalating quickly,” was how an industry reporter reacted to news that both FanDuel and DraftKings have resigned their memberships of the American Gaming Association (AGA). They have done so in order to pursue their prediction market ambitions.
tendered their AGA resignations Monday
Reporter Dustin Gouker confirmed on Substack that both sportsbooks tendered their AGA resignations Monday, as the effects of market headwinds and scandals look set to bring about rapid transformations to the US gambling landscape.
FanDuel said it had “decided to step back” from its AGA membership, while DraftKings stated it had chosen to “relinquish” its ties with the trade body.
The AGA responded that it had accepted both firms’ request and their memberships would be terminated “effective immediately.”
Battle lines clearly drawn
While the AGA and most gambling regulated states are staunchly anti-prediction markets, or Contracts for Difference (CFDs), the US betting public seems to have other ideas According to reports, the overall prediction market industry hit an all-time high of $2.3bn in weekly trading volume in the week of October 20.
FanDuel and DraftKings both voluntarily exited Nevada last week after clashing with the state regulator over CFDs.
“FanDuel has always been the company that moves quickly, from daily fantasy to mobile sports betting to prediction markets. We build what consumers want,” the Flutter-owned brand stated in its parting note to the AGA.
Plotting a different course
DraftKings simply stated its business strategy had evolved to include CFDs and that its ambitions for the future “no longer fully align with the AGA’s direction in certain areas.”
its strategic direction for CFDs was not aligned with the trade body’s “current priorities”
FanDuel also said it wasn’t on the same page as AGA anymore; that its strategic direction for CFDs was not aligned with the trade body’s “current priorities for its member operators.”
The AGA, however, wished FanDuel and DraftKings “the best,” adding with a hint of a warning that: “we expect to maintain close ties in our mission to promote and protect legal, regulated gaming.”
With untapped markets in states like Texas, a wider range of products, and better tax conditions, it appears FanDuel and DraftKings are not going to let anything stop their pursuit of prediction market gold.
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