FanDuel, DraftKings Quit AGA After Prediction-Market Pivot

FanDuel and DraftKings‘ pivot into prediction markets has resulted in both companies leaving the American Gaming Association (AGA), which has been against the emerging model. The departures mark the sharpest public split yet between the traditional state-regulated sports betting ecosystem and the fast-advancing, federally regulated prediction-market model.

A Coordinated Break After Nevada Withdrawals

The departures, reported by The Closing Line newsletter, come a week after both companies withdrew their Nevada sportsbook applications.

Their decision followed the Nevada Gaming Control Board‘s determination that their intent to operate federally regulated sports event contracts conflicted with state gambling law. The Nevada exit now looks less like an isolated regulatory clash. Instead, it’s more like the opening move in a broader repositioning.

Both DraftKings and FanDuel’s parent Flutter highlighted prediction markets as a strategic priority in their Q3 2025 earnings calls. That signals that the vertical will become a more prominent part of their forward-looking product mix.

Additionally, it indicates that companies are shifting toward products they can scale nationally without navigating 50 different state gaming frameworks.

The AGA resignations now complete a broader repositioning: away from state-based betting structures and toward a CFTC-regulated model that bypasses gaming commissions entirely. That gives the operators access to states such as California, Texas, and Florida.

Statements From FanDuel, DraftKings & AGA

FanDuel, DraftKings, and the AGA each confirmed the departures in statements provided to The Closing Line.

A FanDuel spokesperson said: “FanDuel has built our business by maintaining strong industry partnerships. We value the spirit of collaboration that comes with these relationships.

“But as we expand into prediction markets, we recognize this direction is not aligned with the American Gaming Association’s current priorities for its member operators. After thoughtful consideration, we have decided to step back from our AGA membership at this time.”

The spokesperson added, “FanDuel has always been the company that moves quickly, from daily fantasy to mobile sports betting to prediction markets. We build what consumers want and we operate with an unwavering commitment to integrity.”

A DraftKings spokesperson echoed the strategic divergence, stating, “As the company’s business strategy evolves — including with prediction markets — DraftKings determined that its plans no longer fully align with the AGA’s direction in certain areas and have decided to relinquish its membership.”

The AGA confirmed both departures in its own statement:

“In discussion with DraftKings and FanDuel, the AGA has accepted their request to relinquish their membership, effective immediately. We wish them the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming.”

Split Over Regulation

FanDuel and DraftKings’ planned move into prediction markets is unsurprising, given that the model is gaining growing acceptance. More importantly, prediction markets offer access to massive untapped populations in states where sports betting remains illegal.

Additionally, prediction markets fall under the oversight of the Commodity Futures Trading Commission (CFTC), rather than state gaming commissions. That difference has created an ideological divide:

• FanDuel and DraftKings are leaning toward a federal model that allows them to operate in states without legalized sports betting.
• The AGA’s platform focuses on preserving and strengthening state-regulated gambling channels.
• Several state regulators, such as Nevada, have already warned that event-contract trading violates gambling laws and cannot coexist with sportsbook licensing.
• The shift also challenges the assumption that sportsbooks must expand through traditional state-by-state legislation rather than federal market access.

The departures cement prediction markets as a core strategic pillar, not an experimental side offering.

Industry Implications

With the exits, the AGA is losing its two largest sports betting members at a time when prediction markets are posing a threat to the segment. Their departure significantly impacts the industry’s once-unified advocacy front on issues such as advertising rules, federal oversight, consumer protections, and market integrity.

For competing operators, the move creates immediate competitive pressure. That’s whether to follow the federal pathway, risk alienating state regulators, or remain in the state-by-state system and watch rivals access the largest untapped markets in the country.

Meanwhile, FanDuel and DraftKings may have found a pathway to operate legally in major states without online sports betting. That positions them for the most significant expansion opportunity since the end of PASPA.