FanDuel Expands into Event-Based Prediction Markets with CME Group Partnership

FanDuel, a leading daily fantasy sports platform, has entered a strategic partnership with CME Group to create a retail prediction market platform. The joint venture will allow users to bet on the outcomes of financial market events, marking FanDuel's entry into the event-based prediction markets. This move aims to diversify FanDuel's offerings and capitalize on the growing demand for alternative investment products.

FanDuel, a leading daily fantasy sports platform, has entered a strategic partnership with CME Group to create a retail prediction market platform. This joint venture aims to diversify FanDuel's offerings and capitalize on the growing demand for alternative investment products.

The partnership, announced on August 20, 2025, will allow users to bet on the outcomes of financial market events, marking FanDuel's entry into the event-based prediction markets [1]. The new platform is expected to launch later this year and will initially offer contracts tied to benchmarks such as the S&P 500 and Nasdaq-100, as well as prices of oil and gas [2].

CME Group, known for its derivatives marketplace, will provide the regulatory and operational framework for the new platform. The companies will form a joint venture that will operate a non-clearing futures commission merchant (FCM) to provide access to these event-based contracts through FanDuel's app [1].

The new contracts will be simple "yes" or "no" positions, allowing users to express their views multiple times a day with as little as a $1 investment. This accessibility is designed to attract a new generation of traders who may not be active in derivatives today [1].

The partnership is subject to regulatory review by the US Commodity Futures Trading Commission (CFTC). While sports event contracts were not specifically mentioned in the initial announcement, further details will be determined in the coming months [1].

FanDuel CEO Amy Howe expressed excitement about the partnership, stating that there is potentially a wide audience for trading event-based markets. She also emphasized the importance of providing a platform with innovation and best-in-class regulatory compliance and consumer protections [1].

This move by FanDuel and CME Group is part of a broader trend in the financial industry to reach more retail traders. Other companies, such as Robinhood and Kalshi, have also entered the prediction market space, offering sports event contracts and driving further competition [2].

The impact of this partnership on CME Group's investment narrative remains to be seen. While the expansion into retail products could lift transaction growth, any major impact will hinge on subsequent regulatory outcomes. The core risk remains regulatory, especially as retail products expand, and any tightening of oversight on derivatives could pressure revenues and participation [3].

References:
[1] https://www.sportsbettingdime.com/news/betting/fanduel-partners-with-cme-group-to-enter-prediction-markets/
[2] https://www.bloomberg.com/news/articles/2025-08-20/fanduel-teams-up-with-cme-for-bets-on-stocks-and-commodities
[3] https://finance.yahoo.com/news/does-cme-groups-fanduel-partnership-101557771.html