FanDuel and DraftKings Face Regulatory Challenges in Nevada
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FanDuel has officially surrendered its registration and licensing in Nevada due to regulatory challenges posed by the state's gaming authorities. This decision follows the announcement from FanDuel's parent company, Flutter Entertainment, regarding the launch of its new sports betting prediction markets app, FanDuel Predicts.
According to CDC Gaming Reports, the Nevada Gaming Control Board warned both FanDuel and DraftKings to refrain from engaging in prediction markets or face the potential loss of their standing in the state.
The Board has made it clear that offering sports event contracts constitutes wagering activity under Nevada law, which requires operators to hold specific licenses. The new app will allow users to access sports event contracts across various sports, as well as contracts on economic benchmarks like the S&P 500 and commodities, but will not operate in states where online sports betting is legalized.
The partnership with CME Group aims to attract a younger demographic not yet engaged in these markets. In a statement, FanDuel emphasized its commitment to adhering to regulatory frameworks and expressed hopes to return to Nevada in the future under more favorable conditions.
Meanwhile, the Nevada Gaming Control Board has also pulled DraftKings' pending applications related to sports wagering. Board Chair Mike Dreitzer stated that the Board views the actions of Flutter Entertainment and DraftKings as incompatible with their ability to participate in Nevada's gaming industry.
He warned that any engagement in unlawful activities, even outside of Nevada, could jeopardize their licenses. The Board's actions are part of an ongoing effort to regulate the rapidly evolving sports betting landscape, underscoring the challenges facing operators in maintaining compliance while also exploring new market opportunities.
FanDuel's withdrawal from Nevada may impact its operations and strategies in the state, particularly as it expands its reach through the FanDuel Predicts app. These developments signal a broader scrutiny of prediction markets and their place within regulatory frameworks, especially in key markets like Nevada.