Beyond the Odds: Taking on Kalshi like looking in a mirror for FanDuel

Key points:

– FanDuel creating joint venture with CME Group, world’s largest operator of financial derivative exchanges (market cap of almost $99bn)

– Entrance into prediction/events space long mooted and shows relentless desire for expansion, with DraftKings yet to make its move in this arena

– Taking on agile disruptors like Kalshi, Polymarket and Robinhood will be like looking in a mirror for FanDuel

“Okay, it’s happening! Everybody, stay calm!”

To quote a famous Michael Scott scene from the US Office, that was essentially our reaction as FanDuel announced its entrance into the prediction and event contract space.

The announcement came with some eye-catching details, such as the market capitalisation of FanDuel’s new partner, CME Group, standing at $98.96bn – ranking it near the world’s top 200 companies by size. In short, FanDuel isn’t messing around.

However, the fact that it is the new player in a sector boasting disruptors like Kalshi, Polymarket and Robinhood was an inevitability rather than a shock U-turn. Given public statements during quarterly earnings calls, there was anticipation that both FanDuel and DraftKings would eventually enter the space.

DraftKings is yet to show its hand, but Co-Founder & CEO Jason Robins was keen to talk up the possibilities in recent conversation with Gambling Insider, with the ensuing interview to be released in an upcoming publication. Keep your eyes peeled.

And yet, while FanDuel will be looking to replicate a strategy that has served it so well within both sports betting and online casino, there is a marked difference between the Flutter Entertainment-owned brand’s historical competitors and its new agile rivals. Indeed, for FanDuel, facing Kalshi will be like looking in a mirror.

The terms and conditions

Ultimately, in confirming its “groundbreaking alliance” with CME Group – the world’s largest operator of financial derivative exchanges – FanDuel is paying its event contract competitors the highest compliment.

Kalshi and Polymarket rose to mainstream recognition during the 2024 US Presidential Election and, despite ongoing litigation regarding the legal status of sports event contracts more specifically, FanDuel and DraftKings’ attention would have been caught largely through the success of these brands.

 From left to right, DraftKings CEO Jason Robins, Flutter Entertainment CEO Peter Jackson and FanDuel CEO Amy Howe – the new ‘predictors’ on the market?

It paints quite the picture that, FanDuel, in deciding to enter event contracts (notably, not yet with any sport-related offerings, although one may expect this to happen eventually), did so with a near-$99bn partner.

While CEO Amy Howe has been leading the charge in general, Flutter CEO Peter Jackson may well have utilised some of his contacts from the financial world to secure the deal.

So, as well as dominating fantasy sports, sports betting and online gaming markets across the US, FanDuel will now offer “a wide range of markets with simple ‘yes’ or ‘no’ positions for as little as $1.”

It is arguably the panacean form of simple, accessible, mass-market entertainment. Expected to launch later in 2025, offerings include the price of oil and gas, gold, cryptocurrencies and more.

Why is this significant?

Given FanDuel’s market superiority, it is no surprise that it would recruit only the biggest and best partners when entering new verticals. But, here, there may be a little more to it.

Founded in 2009 originally, FanDuel’s launch in the daily fantasy sports market saw it rise as a young, new disruptor. It was taking on the big boys and, when it moved into regulated sports betting in 2018 (then into the handful of states where online casino is legal), it was the fresh brand taking on the traditional status quo.

Now, the script has flipped. The likes of Kalshi, with its modern technology, Robinhood and Polymarket, with its 27-year-old Founder (who created the company aged 21 and, incidentally, called Kalshi a “Polymarket copycat”) are the up-and-comers. FanDuel, by contrast, is the more traditional company entering a relatively new field.

As stated, FanDuel succeeded doing just this in sports wagering – and then gradually overtook BetMGM as the #1 US online casino brand. Kalshi and co, however, will remind FanDuel of its own roots – agile, daring firms with no grand history to necessarily dictate terms or hold them back.

Can FanDuel, this time, play the opposite role and knock the new kids off the block?

The disruptors: From left to right, Robinhood CEO Vladimir Tenev, Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour

The overall landscape

The future of event contracts (leaving out the sports aspect for now) looks set for a far smoother path than that of sweepstakes in the US. We aren’t hearing of any multi-billion-dollar FanDuel partnerships in that vertical, with its legality being questioned more and more.

VGW has been the most dominant player in the sweepstakes field, just like Kalshi in predictions. But, of the two, it is Kalshi that looks to have the clearer path set out ahead of it.

FanDuel’s public decision to enter the event contract field adds legitimacy to the marketplace, while further demonstrating FanDuel and Flutter’s insatiable desire for growth.

The move is not a positive one for opponents of prediction markets. Instead, it’s music to the ears of the players, who will now have a new platform to help make the landscape more competitive, with a DraftKings offering more than likely to follow.

But, again, the most fascinating question now revolves around who goes on to lead this market, with FanDuel bringing scale and reputation to the party.

Predictions, anyone?