FanDuel and DraftKings have both surrendered their sports betting licenses in Nevada as the companies prepare to launch their own prediction market platforms. 

The Nevada Gaming Control Board (NGCB) confirmed the two companies had withdrawn their licenses from the state in a statement released on Wednesday. 

The letter said both companies had voluntarily given up the licenses, but this came under pressure from the NGCB. The gambling regulator had previously warned licensed sportsbooks about offering prediction markets either in Nevada or other states. 

In the statement on Wednesday, the Board similarly noted, “It has been made clear to the Board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts. This conduct is incompatible with their ability to participate in Nevada’s gaming industry.”

Esports Prediction Markets Are Wagering, Says NGCB

The letter went on to note that esports prediction markets are among the event contracts it sees as wagering. 

It added, “Examples of event contracts that the Board specifically considers to be wagering subject to its jurisdiction include event contracts based on the outcome, in whole or in part, of any sporting event, or any other event, such as the Super Bowl,  the World Series of Poker, the Oscars, Esports, and political elections.“

FanDuel and DraftKings both offer esports betting on their sportsbooks and may make markets available in their new prediction market platforms. 

Prediction Market Platforms Preparing for Launch

When releasing their Q3 earnings reports, both companies confirmed they would be launching the controversial platforms in the coming months. 

FanDuel mentioned it will offer markets on baseball, basketball, football, and hockey through FanDuel Predicts, which launches next month. It also said it will have a range of non-sporting event contracts, including financials, cryptocurrencies, and more. If successful, we would expect esports and all other significant events to be covered. 

DraftKings, meanwhile, said it will launch DraftKings Predictions by the end of the year. CEO Jason Robins was confident the venture would succeed, and the company is well-positioned to compete with rival platforms. 

In the company’s Q3 earnings call, Robins stated, “This is the most bullish I have ever felt about the future of DraftKings,” and added, “We will pursue this opportunity, we will compete, and we will win.”

Companies Position for (Prediction) Market Share 

In addition to FanDuel, DraftKings Predictions will compete with established platforms, Kalshi, Polymarket, and Crypto.com. 

Other companies are also planning to enter the space. This week, ProphetX announced plans to pivot from a sweepstakes model to a prediction market platform. The company has applied for a license from the Commodity Futures Trading Commission (CFTC). 

Additionally, PrizePicks gained CFTC approval in September and recently announced a deal with Polymarket to offer its markets on its platform. 

Underdog, meanwhile, has partnered with Crypto.com. Crypto.com also made the decision to withdraw from Nevada following an adverse judge ruling in its court battle with the NGCB. 

Kalshi, however, continues to offer markets in the Silver State, and its legal fight with the NGCB remains ongoing. 

DraftKings and FanDuel already hold CFTC licenses through partnerships with Railbird and CME Group, respectively. 

Gamble Away Nevada to Win California, Texas, and California

The potential of offering markets to users in California, Texas, and Florida, as well as other states that have not yet legalized online sports betting, has been a big draw for companies. Access to these states may come at the expense of established online markets, however. 

Nevada has a relatively low rate of online sports betting compared to other states. The American Gaming Association (AGA) notes that “Unlike in various other states where online sports betting accounts for 95 percent or more of revenue, mobile sports wagering accounted for just 59 percent of Nevada’s total sports betting revenue in 2024.”

The sacrifice of the Nevada market for access to the rest of the country may therefore make sense. If other states follow Nevada’s example, however, it could complicate matters for FanDuel and DraftKings, which hold the lion’s share of the online betting market.