FanDuel, DraftKings won’t be licensed for Nevada sportsbooks
DraftKings and FanDuel, the nation’s two largest sportsbook vendors, won’t operate in Nevada anytime soon after state gaming regulators on Wednesday accepted the surrender of FanDuel’s parent company’s licensing plans.
A withdrawal on all pending requests for DraftKings is planned as well.
Nevada Gaming Control Board Chairman Mike Dreitzer, in an industry notice Wednesday, said it is clear that “Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts.”
A representative of FanDuel on Thursday said the company’s goals are incompatible with Nevada’s.
“FanDuel has built our business on operating within clear regulatory frameworks and maintaining strong partnerships with state gaming regulators across the 24-plus jurisdictions where we hold licenses,” a spokesman said in an email.
“We value those relationships and the collaborative approach to state gambling regulation,” the statement said. “While we are enthusiastic about expanding FanDuel’s presence in Nevada, our views of the current opportunity for prediction markets outside of regulated states are unfortunately in direct opposition to Nevada’s priorities for its licensed operators. As a result, we are making the difficult decision to voluntarily surrender our license. We look forward to resuming our Nevada efforts in the future as circumstances allow.”
Flutter, FanDuel’s parent company, was on the verge of becoming licensed in the state, but at last week’s board meeting its suitability hearings were removed from the agenda.
Flutter’s abandonment stems from the ongoing legal fight between federally regulated prediction markets and states that offer traditional sports wagering over whether prediction markets can take sports bets.
Prediction markets regularly take yes-or-no propositions on current events and last year moved into taking predictions on the outcome of sports events, which state regulators have interpreted as sports bets.
FanDuel Predicts
Wednesday’s regulatory action was triggered by Flutter’s formal announcement of a partnership with Chicago-based CME Group to launch a FanDuel Predicts app next month.
“This conduct is incompatible with their ability to participate in Nevada’s gaming industry,” Dreitzer said in his industry notice.
“The board considers offering sports event contracts to constitute wagering activity under NRS 463.0193 and 463.01962,” Dreitzer said. “Wagering occurs whether the contract is listed on an exchange regulated by the Commodity Futures Trading Commission or elsewhere.”
In the announcement about FanDuel Predicts, the company said the app would “provide access to sports event contracts across baseball, basketball, football and hockey.
“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 FanDuel announcement said. “As new states legalize online sports betting, FanDuel will cease offering sports event contracts in those states.”
The company said in addition to sports, event contracts would be offered on benchmarks such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies, and key economic indicators such as GDP and CPI.
Other prediction market companies, including KalshiEx LLC, Robinhood and crypto.com have offered prediction markets on election outcomes, another issue for Nevada since the state’s constitution prohibits wagering on them.
The state is embroiled in a legal dispute with Kalshi and crypto.com with court hearings expected to start by the end of the year.
Several states with legalized sports wagering have challenged or been challenged by prediction market companies. Massachusetts on Wednesday became the latest state to warn its licensees not to offer prediction contracts or partner with a company that does.
Analyst’s comments
Barry Jonas, a gaming industry analyst with Atlanta-based Truist Securities, said FanDuel’s withdrawal from the Nevada market is financially immaterial since the company has only one partnership in the state at Boyd Gaming’s Fremont property in downtown Las Vegas. He added that DraftKings does not operate in Nevada, but had an application pending.
“That said, we’ll be monitoring other state regulator responses to this development, specifically states which have written letters to its licensees against sports contracts as well as states engaged in related litigation,” Jonas said in a report to investors. “We note that with the ‘surrender’ of FanDuel’s Nevada application (as opposed to revocation), leaves the door open for Flutter for possible re-entry and technically no official ‘black marks’ when in discussion with new licenses.”
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
