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Read Full BioThe owner of the Chicago Mercantile Exchange, CME Group, is reportedly looking to offer sports event contracts by the end of this year.
Sources told Bloomberg News that futures commission merchants would likely offer the contracts but may later be expanded to retail investors.
In August 2025, CME announced a partnership with FanDuel. It enables the sports betting platform to provide event contracts based on financial information, including stock and index prices, inflation figures, commodities, and currencies.
With CME now looking to move into sports event contracts, speculation has begun that FanDuel is a natural partner to provide them to retail customers. Speaking to Bloomberg on a purported deal, a FanDuel spokesperson said:
“As we work with CME Group to develop our offering, we are continuing to prioritize active conversations with a variety of stakeholders, including state regulators, and have made no decisions as we maintain an open dialogue in an evolving legal and regulatory landscape.”
Sports event contracts are similar to futures contracts. However, they are based on the outcomes of sporting events rather than commodities or indices. As they’ve gained massive popularity, they have become one of the most controversial areas in financial regulation. They now face multiple lawsuits and challenges over whether they constitute gambling or legitimate derivatives.
Still, FanDuel’s existing sportsbook and user base could make it a natural distribution channel for these contracts. That would bring institutional-style products to everyday bettors. It would also potentially expand FanDuel’s reach into states where traditional sports betting is not yet legal.
Investors Flood Into Prediction Markets
Sports event contracts have experienced a surge in popularity in 2025. They have fueled the rise of prediction market platforms such as Kalshi and Polymarket, the two largest globally.
Kalshi claims it accounts for over 60% of the global market. It recently raised $300 million, which valued it at $5 billion. That valuation more than doubled its value in just a few months. Although now surpassed in market share by Kalshi, Polymarket remains the most valuable of the two platforms. Following recent funding, it is now valued at $8 billion.
The rapid growth in valuations occurs despite increasing regulatory uncertainty surrounding event contracts. In particular, they should consider whether to classify event contracts similar to sports wagers offered on traditional betting platforms. The classification of event contracts provides several advantages, particularly in the US market.
Federal law currently places event contracts under the oversight of the Commodity Futures Trading Commission (CFTC). That prevents state legislators and regulators from prohibiting them. Meanwhile, prediction market platforms can also avoid paying taxes on licensed or state gaming revenue.
However, recent legal challenges have introduced significant doubt over that special status. While the sheer number of lawsuits against prediction markets makes that status uncertain, it is also balanced out by extremely high levels of investor confidence as more companies attempt to enter the space. Additionally, existing platforms often find funding rounds to be vastly oversubscribed.
FanDuel Could Expand to New Markets
Shares in more traditional betting platforms, such as FanDuel and DraftKings, have suffered due to the growth of prediction markets and sports event contracts. That makes these contracts an attractive proposition for FanDuel to claw back some of its lost market share.
However, with FanDuel already required to operate legally and pay license fees and taxes for its traditional sportsbook, the benefits are less clear. Still, expanding into federally regulated event contracts could allow it to operate in states where sports wagering remains prohibited.
For CME, its existing license from the CFTC allows for self-certification of contracts. That enables rapid progress with its new sports venture. However, that may require waiting for the current government shutdown to end.
If approved, CME’s foray into sports event contracts could position FanDuel at the crossroads of Wall Street and the wagering industry.
