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Battle takes a twist
The regulatory conflict over prediction markets reached a critical junction this week after the Nevada Gaming Control Board (NGCB) announced punitive action against the two US sports betting market leaders.
accepted FanDuel-owned Flutter’s “surrender”
The NGCB on Wednesday revealed it had accepted FanDuel-owned Flutter’s “surrender” of its current Nevada license, and approved DraftKings’ request to withdraw all pending applications.
The drastic nature of the pair’s rapid exeunt from Las Vegas came after the state body decreed their involvement in prediction markets, or Contracts for Difference (CFDs), to be “unlawful” activity incompatible with holding a Nevada gaming license.
A symbolic state
Nevada is one of multiple states that has repeatedly warned the likes of FanDuel and DraftKings to steer clear of prediction markets. The NGCB’s formal enforcement action on Wednesday reportedly came just minutes before Flutter published its third-quarter financials, an earnings report in which the FanDuel parent confirmed its plans to launch CFDs-loaded FanDuel Predicts in non-regulated markets in December.
DraftKings is set to launch its own CFDs platform “in the coming months” with both firms stating they will geofence out all Indian Country in whichever states their prediction market platforms are offered.
direct opposition to Nevada’s priorities”
A FanDuel spokesperson, however, opined that the firm’s ambitions for CFDs in unregulated states was “unfortunately in direct opposition to Nevada’s priorities for its licensed operators.”
While stating it was “sad” to give up its Nevada license, Flutter CEO Peter Jackson said FanDuel was prioritizing access to US markets it hadn’t been able to access via traditional sportsbooks, such as in Texas, California, and Georgia.
DraftKings toed the same line, stating its pulling out of Nevada was part of an “ongoing commitment to regulatory compliance.” The Boston-based firm’s Chief Compliance Officer Jen Aguiar, however, defended CFDs markets as being federally regulated, and that DraftKings would work with the federal body “to uphold the highest standards of integrity in our operations.”
Roadmap for regulators?
The NGCB’s pioneering action against the US sportsbook giants is widely seen by industry insiders as giving other regulated states a blueprint for ousting CFDs operators.
The situation took a turn in Nevada earlier this month when US District Court Judge Andrew P. Gordon unexpectedly rejected Crypto.com’s motion for a preliminary injunction to allow it to offer sports event contracts, causing the crypto giant to halt its Nevada sports event contracts on Monday.
Nevada sent a clear message”
With big guns DraftKings and FanDuel now also brought to heel, InGame cited an industry veteran who believes other states may follow suit. “Nevada sent a clear message to provide other regulators with the roadmap going forward. Hopefully, others will follow on this important issue to the regulated gaming market.”
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