Core Insights - Prediction markets like Kalshi and Polymarket have gained regulatory approval to offer sports-based prediction contracts, becoming significant competitors to traditional sportsbooks [1] - Concerns regarding the impact of these prediction sites on established sportsbooks such as DraftKings and Flutter Entertainment's FanDuel may be overstated, with a reported 5% decrease in overall betting handle for legal U.S. sportsbooks attributed to these new platforms [2] Group 1: Company Strategies - DraftKings launched its DraftKings Predicts platform, allowing entry into markets where sports betting is not yet legal, such as California and Texas [5] - This strategy not only opens new markets but also aims to demonstrate potential tax revenue to state lawmakers, potentially accelerating legalization efforts [6] - Flutter Entertainment has also entered the U.S. prediction markets with FanDuel Predicts, planning to expand its reach nationwide [7][9] Group 2: Market Dynamics - The emergence of prediction markets is prompting traditional sportsbooks to adapt, with companies like DraftKings and Flutter making significant moves into this space [3] - Both DraftKings and Flutter are leveraging prediction markets as a means to penetrate states where traditional sports betting remains illegal, indicating a strategic shift in their business models [8][9]

Core Insights - DraftKings has launched a prediction market application, prompting FanDuel to introduce its own similar product called "FanDuel Predicts" in five states [1] - The prediction market platforms allow users to bet on outcomes of sports events, cultural events, and financial indicators, providing a more intuitive pricing model compared to traditional sports betting [1] - FanDuel plans to expand its application across all 50 states, focusing on contracts based on economic data, commodity prices, and stock indices, while sports-related contracts will be available only in states where online sports betting is not legalized [2] Company Developments - FanDuel, under Flutter Entertainment, has partnered with CME Group to launch its prediction market application, while DraftKings also utilizes CME for its trading but plans to migrate to its own platform [2] - The introduction of these prediction markets comes as a response to competition from emerging companies like Kalshi and Polymarket, which have pioneered this new betting model [2] - Following the announcement of FanDuel Predicts, Flutter's stock began to recover, indicating positive market sentiment towards the new product launch [3]

Core Viewpoint - FanDuel and CME Group have launched a new prediction markets platform, FanDuel Predicts, in five states, with plans for a phased expansion to other states through early 2026, aiming to enhance access to financial and sports markets for millions of U.S. customers [1][4]. Group 1: Platform Features - FanDuel Predicts allows users to express their views on significant events across financial indicators, cultural moments, and sports through a mobile application available on major app stores [2]. - The platform will offer event contracts on benchmarks such as the S&P 500, Nasdaq-100, oil and gas prices, gold, cryptocurrencies, and key economic indicators like GDP and CPI [3]. - Sports contracts will be available in states where online sports betting is not yet legal, with plans to cease offering these contracts as states legalize online sports betting [3]. Group 2: Customer Engagement and Insights - The launch in five states is expected to provide valuable insights into customer engagement, which will help refine the platform's approach as it expands [4]. - The platform integrates a "Know Your Customer" sign-up process, requiring personal information for account creation, ensuring compliance and security [2]. Group 3: Consumer Protection - FanDuel is committed to consumer protection within the Predicts app, allowing customers to set deposit limits, receive alerts, or self-exclude, with mental health services provided by Kindbridge Behavior Health [5]. Group 4: Company Background - FanDuel Group is a leading mobile gaming company in the U.S., with a diverse portfolio including sports betting, iGaming, and daily fantasy sports, serving approximately 17 million customers across all 50 states [6]. - CME Group is recognized as the world's leading derivatives marketplace, offering a wide range of global benchmark products across major asset classes, enabling clients to manage risk and capture opportunities [7][8].

Core Viewpoint - The recent decline in shares of DraftKings Inc and Flutter Entertainment PLC is seen as unwarranted by analysts, who believe both companies have significant opportunities in the prediction markets space, estimated at $5 billion [1][3][6]. Company Analysis - DraftKings has an Outperform rating with a price target of $48, while Flutter Entertainment also holds an Outperform rating with a price target of $330 [1][2]. - The total addressable market (TAM) for DraftKings and Flutter in prediction markets is estimated at $5 billion, which includes $4.4 billion for sports prediction markets and $600 million for non-sports prediction markets [4]. - Analysts estimate that DraftKings and Flutter could achieve market shares of 14% and 16%, respectively, in prediction markets in states where online sports betting is not yet legalized [5]. Market Context - Since the end of August, DraftKings and Flutter have seen market capitalizations decrease by approximately $10 billion and $20 billion, respectively [6]. - The market is currently pricing in a worst-case scenario regarding the TAM, assuming that all states legalize online sports betting without allowing the launch of prediction markets [6]. - DraftKings shares closed at $29.44, down 1.83%, while Flutter shares closed at $191.79, down 0.79%, reflecting year-to-date declines of 18.9% and 24.7%, respectively [7][8].

Core Insights - Flutter Entertainment plc (NYSE:FLUT) is experiencing a competitive environment for account openings, leading to a decline in stock performance despite being a strong company [1] - The company reported mixed earnings, with soft revenue attributed to adverse gambling outcomes, but higher than expected earnings [1] - Flutter is expanding into the predictions market with the launch of FanDuel Predicts in partnership with the CME Group [1] Company Overview - Flutter Entertainment operates well-known brands in sports betting and online gaming, including FanDuel, PokerStars, Betfair, and Paddy Power [1] - The company is navigating a challenging market environment characterized by intense competition [1] Financial Performance - The latest earnings report indicated soft revenue due to unfavorable gambling outcomes [1] - Despite the revenue challenges, Flutter achieved higher than expected earnings [1] Strategic Initiatives - Flutter is entering the predictions market, similar to recent moves by competitors like DraftKings [1] - The launch of FanDuel Predicts is set for next month, indicating a proactive approach to market expansion [1]

Group 1 - Flutter, the parent company of FanDuel, announced a partnership with CME Group to launch a new prediction markets platform called FanDuel Predicts, set to launch in December [1] - Prediction markets allow bettors to place wagers on the outcomes of various events, indicating a growing trend in the betting industry [1] Group 2 - DraftKings is entering the prediction markets space, indicating competition in this emerging sector [4] - Robinhood reported a doubling of revenue and more than tripled earnings, showing significant growth in the financial services sector [4]

Market Expansion - CME Group and FanDuel are partnering to launch a US prediction markets platform named FanDuel Predicts next month [1] - FanDuel Predicts will be a standalone app offering event contracts [1] Product Offering - The platform will offer event contracts on sports, crypto prices, and more [1]

Core Insights - CME Group and FanDuel are launching a new prediction market product called FanDuel Predicts in December, allowing users to wager on sporting events, gas prices, and cryptocurrencies [1] - The product will be available only in states where sports betting is not yet legal and will be excluded from tribal lands [2] - Flutter CEO Peter Jackson highlighted that FanDuel Predicts presents an immediate growth opportunity, particularly in states where FanDuel sportsbook is not available [3] Market Context - The joint venture is part of a trend among gaming companies and crypto exchanges, with similar launches from DraftKings and Coinbase [4] - Prediction markets have gained popularity, especially following the success of platforms like Polymarket and Kalshi, which facilitated significant trading volumes leading up to the 2024 US Presidential election [5] - Weekly notional volume for prediction markets reached approximately $2 billion in November, peaking at $3 billion recently, primarily driven by sporting events [5] Regulatory Landscape - The rise of prediction markets has attracted attention from state regulators, leading to disputes over regulatory authority [6][7] - The New York Gaming Commission issued a cease-and-desist letter to Kalshi for operating without a gaming license, and similar actions have been taken against other companies like Crypto.com [8]

Prediction Market Partnership - FanDuel predicts 将于 12 月上线，为无法访问 FanDuel 体育博彩的美国用户提供体育产品 [3] - FanDuel 与 CME 合作，在 FanDuel 没有体育博彩许可证的州提供体育产品 [5] - 预测市场受 CFTC 监管 [5] Company Strategy - FanDuel 正在扩展到预测市场，为用户提供更多体育产品 [3][5] - FanDuel 预测应用程序将于 12 月上线 [3][5] Industry Perspective - CME 被认为是此类活动的首要仲裁者，与 CME 的合作使预测市场合法化 [1] - Bet Fair 交易所已在英国、意大利和世界其他市场运营 20 年 [2]

Core Insights - FanDuel is set to launch an independent prediction market application called "FanDuel Predicts" in December, as part of a collaboration between its parent company Flutter and the Chicago Mercantile Exchange Group (CME) [1] - DraftKings, a major competitor, has also announced plans to launch a similar platform named "DraftKings Predictions" shortly before FanDuel's announcement [2] - Following these announcements, Flutter's stock price fell by 4% in after-hours trading, indicating market reactions to the competitive landscape [2] Industry Overview - The core of prediction markets is "event contracts," which allow users to trade on the outcomes of future events, such as stock indices, economic data, and sports events [5] - Unlike state-regulated sports betting, event contracts are regulated by the federal Commodity Futures Trading Commission (CFTC), making them legal across the U.S. without the need to pay state-level gambling taxes [5] - This regulatory framework provides a pathway for companies to operate in states where sports betting has not yet been legalized, expanding their business opportunities [5]