FanDuel wants to carve a sports niche in the controversial prediction market business

By Clare Duffy, CNN

New York (CNN) — FanDuel has built a large and growing business with its sports betting app, becoming the largest online sportsbook in the United States. But online sports gambling remains illegal in many states, which is why it’s getting into the booming — and controversial — prediction market business.

Billions of dollars are exchanged weekly on prediction market platforms such as Kalshi and Polymarket. Bets range from which team will win the World Cup and which candidate will be the 2028 Democratic presidential nominee to the temperature in New York tomorrow or how many times Elon Musk will post on X this month. Huge amounts of money being wagered on those sites threatened to take business from online sportsbooks like FanDuel and DraftKings.

Prediction markets are also more widely available than online betting apps, because they’re regulated differently. Prediction markets — where the odds are set not by a company but depend on how many people bet on each outcome — are legally considered trading products, not gambling, and are overseen federally by the Commodity Futures Trading Commission (CFTC), Meanwhile, sports betting apps are regulated on the state level.

Last January, Kalshi made a splashy announcement that it would enable trading on sports in all 50 US states — even those that outlaw traditional sportsbooks.

Now, the sports betting companies are jumping into the prediction space, allowing a “reasonable facsimile” of a more conventional sportsbook, FanDuel President Christian Genetski told CNN’s “Terms of Service” podcast.

FanDuel launched its prediction market app, FanDuel Predicts, last year with derivatives marketplace CME Group. It’s now available in 16 states. (FanDuel competitor DraftKings also announced its own prediction market last year.)

“It’s not the full panoply of everything you can do on the FanDuel sportsbook,” Genetski said. “But it provides you a way to experience a FanDuel-type sports experience.”

FanDuel says it won’t allow FanDuel Predicts users to bet on sports in states where its core sportsbook app, which Genetski called the company’s “most important business,” is available.

FanDuel Predicts “enables us to harness a significant and incremental expansion of the US addressable market ahead of further state regulation — a space where our scale and experience give us a natural advantage,” Peter Jackson, CEO of FanDuel parent company Flutter, said in the company’s year-end financial report for 2025. FanDuel’s core sportsbook app averages 4 million monthly users across 25 states where sports betting has been legalized, according to Genetski.

FanDuel is entering the space in a moment when prediction markets face intense scrutiny over the risk of insider trading, along with larger ethical questions about the societal impact of letting people bet on elections or geopolitical conflicts. The White House last week warned staff not to engage in insider trading on prediction markets platforms following controversial trades related to the Iran war.

And FanDuel and DraftKings have already drawn concerns over gambling addiction and sports rigging scandals related to their core sports betting businesses, although the companies say they have measures in place to address those issues.

FanDuel Predicts users can bet on real-world outcomes in financial markets — for example, how much GDP will grow in a given quarter, or what the unemployment rate will be in a given month. But the company has no plans to allow edgier bets on the prediction app, Genetski said. (DraftKings Predictions allows betting on elections but still offers a more limited selection than larger prediction markets.)

“We would never offer anything to do with death, regime change, war,” Genetski said. “That’s not a FanDuel business that we would ever engage in.”

He said the company’s primary goal remains serving sports fans.

“We are definitely sports-focused at FanDuel,” Genetski said. “We are a sports brand and a sports company.”

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