The Gaming Commission in Nevada has expressed its concerns over FanDuel’s plans to offer events contracts to its users.
After listening to financial presentations from Flutter Entertainment, FanDuel’s parent company, Gaming Commissioner Brian Kolicki asked for further clarification regarding the popular sports betting app’s future plans in the state.
It was announced last week that FanDuel is entering the prediction markets arena with a CME Group partnership and although the initial joint-venture is for events contracts, it does open the possibility for sports markets to become part of the roadmap.
Why Is Nevada Worried About Sports Contracts?
Sports markets is a particularly sensitive issue in Nevada right now as the state is battling legal proceedings with online financial exchange Kalshi and Robinhood over their rights to offer sports events contracts.
It is an ongoing dispute centred around what constitutes a sports bet and whether platforms such as Kalshi are answerable to state or federal government legislation.
FanDuel does not offer a sports betting site in Nevada at present as it is only licensed to supply information services.
Flutter’s private counsel Erica Okerberg revealed that the firm had spoken with Kalshi among others to get a greater understanding of the marketplace but it had not discussed any other partnerships.
Krolicki took a sensitive approach when framing his question.
“I’m walking on a slope here, and I want to be mindful and courteous,” he said.
“You all have been a great licensee.
“You’re moving in a direction of CFTC [Commodity Futures Trading Commission ] oversight, but you understand that we’re in the position of litigation not only as a Commission, but personally.
“This events market is a very sensitive spot for us and in conflict with this state and our Gaming Control Act and other states’ sports betting.
“What are the types of prediction betting that you envision pursuing?”
Flutter Confirm FanDuel’s Position
Okerberg stressed that FanDuel had chosen CME as its partner for its solid reputation as being strong on compliance and open with regulators.
“We’re coming at this with the idea that they only want to approach this business in a way that’s thoughtful and respectful of the regulator’s position and at all times in compliance with state, federal, and local law,” Okerberg said.
“At this time, we haven’t made a determination of what event contracts we might offer.
“Those might range from traditional commodities, like gold.
“Of course, they’re looking into whether sports contracts might be offered in certain jurisdictions in compliance with local laws.
“They’ve been working with both their internal and external experts to understand the landscape from legal and regulatory perspectives and are mindful of the positions taken, including by regulators in this litigation.
“At this time, their intent is not to do anything that would jeopardize their licenses in Nevada or other jurisdictions; those licenses remain paramount to the company and their primary focus on business.
“This is an opportunity to explore whether these types of business opportunities might appropriate and in line with the law and regulator’s expectations.”
Krolicki pointed out that while various legal disputes are still being fought in the courts, the CFTC is in conflict with the states who argue that the line into sports betting has been crossed.
“To reconcile complying with federal and state matters, that’s not possible today,” he said.
“So, I gently and respectfully remind you, your licensees here are important to us.
“I think it’s important to you. Something’s out of the barn door already. But there is much at stake.
“Just for the record, there’s profound sensitivity on these activities.
“We may not like the ultimate outcome in the courts, but until we have that definitively, we’re watching, and this is unpleasant for all.”
Jim Munro is a betting industry and gambling expert who has been a national newspaper journalist for over 30 years, predominantly at The Sunday Times and The Sun, where he wrote a weekly soccer betting column. Jim also worked on the launch of Virgin Bet with Gamesys and was subsequently head of editorial at LiveScore, the sports media and betting group.
