Regulators Unmoved As DraftKings, FanDuel Move Into Prediction Markets

By Bill Speros Oct 22nd, 2025 3:40 PM EDT

Regulators in several states appear poised to hold the line against prediction markets. This comes even as FanDuel and DraftKings go public with their own push to launch their own trading sites.

DraftKings Tuesday announced its intention to join the likes of Kalshi and Polymarket with the acquisition of Railbird. DK added that an upcoming “DraftKings Predictions” will be launched soon.

The move follows FanDuel joining forces with CME to develop its own prediction markets site.

Prediction sites like Kalshi, Polymarket, and Robinhood fall under the regulatory umbrella of the federal government. FanDuel operates retail and/or online books in 25 states, plus Washington DC and Puerto Rico. Sports bettors can use DraftKings in 26 states and Washington DC. Both books have applied to operate in Missouri when betting launches there on December 1.

FanDuel and DraftKings informed regulators in several states of their planned moves into the prediction space before they were publicly announced, Bookies.com has learned.

An source told Bookies.com that these operators are fully engaged in trying to win over regulators in states where they operate. And plan only to offer sports-related prediction market trading in states where they do not currently operate. And/or in states that have not legalized sports betting.

That means a push into California, Texas, Georgia, and possibly Florida, where the Seminole Tribe has a sports betting monopoly via the Hard Rock Bet app.

Regulators, Litigation Final Obstacles For Sports Books

Winning over the heart and minds of state regulators remains perhaps the final obstacle outside court for both DraftKings and FanDuel before they move full-speed into sports-related prediction trades.

Wednesday, the NHL announced a partnership with Kalshi and Polymarket. That signals a massive shift in sentiment among the so-called “Big Four” sports leagues over the integrity guarantees offered by prediction markets.

Earlier this year, the NBA and MLB wrote to the CFTC about their concerns over player integrity issues in prediction markets. Those concerns appear to have been mitigated enough to at least bring the NHL into the predictions market space.

Unlike prediction markets, sports books deal with regulators and law on a state-by-state basis. And multiple states remain engaged in court battles with Kalshi and other prediction markets.

Litigation filed by both states and Tribes remains pending in several other states, including Nevada, California, Kentucky, Wisconsin, New Jersey, and Maryland.

The case between Kalshi and Nevada has a dual heading in federal court on November 14. While these cases wind through both state and federal court, they appear headed for a final adjudication in front of the Supreme Court, or perhaps (far less likely) Congressional action.

A State-By-State Challenge For Operators

Last month, the Massachusetts Attorney General filed a lawsuit against Kalshi and Robinhood. AG Andrea Campbell asserted those sites were engaging in illegal sports betting within the Commonwealth. The AG consulted with the Massachusetts Gaming Commission (which lacks law enforcement power) before filing the lawsuit.

"The Massachusetts Gaming Commission is aware that DraftKings and FanDuel intend to launch prediction markets, and will continue to monitor developments. As Massachusetts Category 3 sports wagering licensees, the companies remain responsible for following Massachusetts laws and regulations," Thomas Mills, Massachusetts Gaming Commission spokesperson, told Bookies.com Wednesday.

A spokesperson for the Ohio Casino Control Commission had no comment, beyond confirming that both DraftKings and FanDuel had informed the OCCC of their prediction market plans. Bookies.com also reached out to regulators in Arizona, Pennsylvania, and Michigan, but had not heard back.

The Arizona Department of Gaming said in a letter to license holders dated Sept. 15 that its regulatory scope includes the conduct of licensees outside of Arizona. And that conduct (in this case, clearly, operating a prediction market) will be considered when it comes to determine suitability. And may “deny, revoke, or suspend licenses.”

The ADG’s letter noted several licensees “are planning to enter the prediction marketplace."

On October 3, the Michigan Gaming Control Board issued a memorandum to all its licensees. It warned "that any involvement in the offering of sporting event contracts, directly or via an affiliate, key person, related business entity, or other association, will have implications relative to your licensure in Michigan.”

Regulation and litigation move at the speed of government. The technology and growth surround prediction markets continue to move at the speed of capitalism.

And capitalism is winning. As are the prediction platforms. And perhaps, soon, DraftKings and FanDuel.

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