FanDuel and DraftKings Leave AGA Trade Group Amid Increasing Tensions Over Sports Betting Markets
FanDuel and DraftKings Exit AGA: Both companies announced their departure from the American Gaming Association (AGA) due to misalignment with the organization's stance on prediction markets and online betting.
Rise of Prediction Markets: The growing popularity of prediction platforms like Kalshi and Polymarket is creating a rift in the gambling industry, as these platforms expand into sports betting, which the AGA opposes.
FanDuel's New Initiative: FanDuel plans to launch a prediction platform called FanDuel Predicts in December, focusing on states where sports betting is illegal, further diverging from AGA's priorities.
DraftKings' Strategic Shift: DraftKings has also shifted its strategy by acquiring Railbird, a company with a federal license for event contracts, leading to its decision to leave the AGA as its business direction evolves.
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CFTC Announces New Rules for Prediction Markets
- Major Policy Shift: CFTC Chairman Michael S. Selig announced the drafting of 'clear rules' and the withdrawal of proposals prohibiting sports and political contracts, aiming to eliminate market uncertainty and support lawful innovation.
- Clarification of Rules: Selig noted that the existing framework has proven difficult to apply, and the CFTC will establish 'clear standards' to improve the management of event contracts, ensuring the legal rights of market participants.
- Legal Scrutiny Context: Amid increased legal scrutiny from state regulators on prediction markets, Coinbase has filed lawsuits against Michigan, Illinois, and Connecticut, seeking to confirm the CFTC as the sole regulator of these markets.
- Market Reaction Mixed: Despite the potential positive impact of the CFTC's new rules, stocks of sports-related companies like Genius Sports did not rally, while shares of DraftKings and Flutter Entertainment showed mixed signals, indicating cautious market sentiment.

Competition Between Sports Betting and Prediction Markets
- Market Dynamics: Roundhill Investments CEO Dave Mazza highlights that sports betting companies like DraftKings and Flutter are launching prediction-style products to adapt to market changes, indicating industry evolution rather than displacement.
- Regulatory Impact: The regulation of prediction markets has become a key battleground, with some states attempting to restrict Kalshi and Polymarket's operations while legal online sportsbooks continue to operate, showcasing market complexity.
- Profitability Focus: Mazza notes that 2026 is expected to be a consolidation year, with operators focusing on profitability and states interested in tax revenue, likely leading to more partnership reshuffling and selective M&A.
- Market Outlook: Despite DraftKings and Flutter stocks dropping 26% and 34% over the past 52 weeks, respectively, Mazza believes that innovative disruption indicates the long-term potential of the sports betting and gambling markets, with future regulation being a key factor.









