FanDuel and CME Revise Prediction Market Joint Venture to Route Sports Bets Through Nadex

FanDuel and CME Group are revising their prediction market joint-venture so that all sports-related bets on the FanDuel Predicts app will execute via Crypto.com’s Nadex exchange. To date CME has handled single-leg sports bets while Nadex has managed parlays since June. Going forward CME will process only the non-sports bets that represent less than 1% of the app’s activity. CME retains its 51% equity stake.

The disclosure came inside Flutter Entertainment’s second-quarter earnings report. Flutter parent CEO Peter Jackson will step down after nine years. The company reported U.S. betting handle with little growth, quarterly earnings that trailed consensus, and lowered full-year revenue expectations. Its stock (NYSE: FLUT) closed down more than 11% at $92.91 per share, as first reported by Sportico.

Terry Duffy, CME CEO, told analysts on a first-quarter earnings call: “When we originally negotiated this deal with FanDuel, our goal and objective had nothing to do with sports.” A CME spokesperson wrote that “Given the ongoing uncertainty related to sports event contracts, and as CME Group focuses more on market-based products, our FanDuel Predicts FCM will offer sports contracts, including individual performance and combo products, through Crypto.com.”

Jackson told Barron’s that Flutter “remains committed to CME” but “we know what’s really important for consumers in our sports space is to have an app that’s fast and easy to use.” Flutter acknowledged FanDuel Predicts is behind schedule, stating “operational progress in H1 has been slower than planned, we are gaining traction.” Sportico reported CME’s prediction market betting volume in the first two weeks of July at roughly 0.02% of all volume from U.S. regulated entities.

CME’s Strategic Refocus

The change highlights clear differences between the derivatives powerhouse and the gambling operator less than a year after the joint-venture launched. CME is not exiting sports entirely; it is seeking regulatory approval for monthly and quarterly cash-settled futures tied to team performance indexes through a partnership with FutureSports.

Reading the Convergence Signals

With more than 30 years advising operators, investors and regulators at the intersection of gaming and securities, I see this as an inflection point. The rise of federally regulated prediction markets is challenging the balance of power long held by FanDuel and DraftKings in state sportsbooks. Client-partners should track how infrastructure shifts affect execution speed, regulatory exposure and competitive positioning as these markets mature.

Reporting: Sportico