What To Know As Wall Street Meets Sportsbooks

Topline

Bettors will soon be able to wager on market movements, inflation, the price of gas and gold on FanDuel as part of a partnership between the popular sports betting platform and the derivatives exchange CME Group, further narrowing the gap between sportsbooks and Wall Street after the investing platform Robinhood announced an expansion into football wagering.

The popular sports betting app will soon host event-based contracts linked to oil and gas prices, gold, the S&P 500 and more.

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Key Facts

FanDuel’s parent firm Flutter Entertainment and CME Group announced a joint venture Wednesday to “expand access to financial markets” for FanDuel customers, with event-based contracts listed on the FanDuel app that will be subject to CME Group’s regulations.

The partnership will allow bettors to wager multiple times per day on contracts linked to the S&P 500, the Nasdaq, oil and gas prices and cryptocurrencies, as well as economic data like gross domestic product and inflation, the companies said, noting other unspecified offerings would be determined “in the coming months.”

Bettors will express their views with “yes” or “no” positions for as little as $1, the companies said in a statement, and the partnership does not allow users to actually buy or sell stocks on FanDuel.

Event-based contracts on FanDuel are expected to launch later this year

Robinhood Launches Football Predictions Market

FanDuel’s announcement came one day after Robinhood launched pro and college football prediction markets within the online broker’s app. Bettors will now be able to wager on the outcomes of both regular season NFL matchups and college football games involving the Southeastern Conference, the Atlantic Coast Conference, the Big Ten Conference and the Big 12 Conference, according to Robinhood. Prediction markets for these games will roll out with the first two weeks of the pro and college football seasons, Robinhood said, with plans to add weekly matchups as the season progresses. The football prediction markets are expected to be tradeable each day between 8 a.m. EDT and 3 a.m., Robinhood said. In July, Robinhood CFO Jason Warnick told CNBC that nearly $1 billion in sports and non-sports events contracts were traded through its first quarter, adding the firm foresaw “a big opportunity” in sports betting. As of Thursday, Robinhood was taking bets on the NFL regular season opener between the Philadelphia Eagles and Dallas Cowboys, along with Saturday’s college matchup between Kansas State and Iowa State.

What To Watch For

Whether fellow sports betting platform DraftKings adds prediction markets. Oppenheimer analyst Jed Kelly suggested in a note last month that DraftKings and Flutter Entertainment were looking to become more proactive with prediction market offerings, complementing a rise in sports betting revenue in recent years. Analysts from Jefferies wrote Thursday that DraftKings will likely enter the prediction market space by acquiring Railbird, which operates a federally regulated prediction market and event contract exchange.

Big Number

$147.9 billion. That’s how much Americans wagered on sports betting in 2024, a 23.6% increase over the previous year, according to the American Gaming Association. More than 95% of these bets were placed online.

Key Background

New betting opportunities on FanDuel and Robinhood add to a developing landscape among the prediction marketplace. Betting platforms Crypto.com and Kalshi have launched sports contracts in recent months, while Polymarket said a return to the U.S. was in the works three years after it was blocked for failing to register as a derivatives trading platform. Polymarket and Kalshi have become popular platforms for bettors to wager on elections, the recent papal conclave and other scenarios, including whether Elon Musk and President Donald Trump would mend their strained relationship. Betting on sports and politics on derivatives exchanges faced criticism under the Biden administration. The Commodity Futures Trading Commission sued Kalshi in 2023 over its betting offerings for Senate and House election results, arguing the bets could sway polling. An appeals court ruled in favor of Kalshi in October 2024 and allowed users to wager on elections.

Tangent

Several states have issued cease-and-desist orders against Kalshi in recent months, including Montana, Nevada, New Jersey, Maryland, Ohio and Illinois, arguing Kalshi has allowed sports-related prediction contracts on its site despite statewide bans on sports betting. Kalshi has disputed the orders, arguing the platform is regulated by the CFTC, not state gaming officials.