FanDuel Secures FCM License from NFA While Its CME Group Partnership Shifts
FanDuel secured NFA membership and an FCM license, enabling greater control over prediction market operations. The move evolves its relationship with CME Group, majority owner of FanDuel Predicts, after shifting sports contracts to Crypto.com. The FCM does not authorize an independent exchange, which requires separate DCM and DCO approvals.
SCCG Take — The FCM license strengthens FanDuel’s hand in renegotiating economics with CME and advances vertical integration options. Operators should assess similar regulatory steps to secure leverage in prediction market joint ventures.
FanDuel, the gaming unit of Flutter Entertainment (NYSE: FLUT), obtained approval as a member of the National Futures Association (NFA) on Monday. The approval includes a futures commission merchant (FCM) license. This development grants the operator more economic control over its prediction market operations and continues to reshape its arrangement with CME Group (NASDAQ: CME), the majority owner of the FanDuel Predicts platform, according to reporting by Casino.org News.
A futures commission merchant solicits or accepts orders for futures contracts, options on futures, retail off-exchange forex contracts or swaps, and accepts customer funds to support those orders. The FCM designation is required for prediction market operators because the Commodity Futures Trading Commission (CFTC) classifies event contracts as swaps.
Contractual Tensions with CME Group
FanDuel has not issued a public statement on precisely how the FCM license alters its ties to CME. The relationship is clearly in motion. Earlier this year FanDuel formed a prediction market partnership with Crypto.com, later shifting novelty and sports event contracts to that platform. The original CME arrangement now centers on financial derivatives, which generate lower volume than sports swaps.
The parties announced their partnership in August 2025, with FanDuel Predicts launching in five states last December. Flutter has since signaled it wants greater optionality in prediction markets. CME has taken the position that FanDuel cannot simply obtain an FCM license and become a competitive threat to the joint platform.
CME Chairman and CEO Terry Duffy stated that such a move by FanDuel is “obviously contractually against what we originally stated with them.” CME owns 51% of FanDuel Predicts and receives 50% of gross revenue, yet FanDuel bears all marketing, promotion and technology costs. That split supplies a clear commercial incentive for the gaming company to seek structures that deliver greater economic return.
Separate Requirements for Operating an Exchange
The FCM license is distinct from a Designated Contract Market (DCM) permit. Entities seeking to run their own exchange must hold a DCM license and secure approval as a Derivative Clearing Organization. DCMs operate like traditional futures exchanges and may list contracts on any underlying commodity, index or instrument under Part 38 of the CFTC’s regulations.
The prediction market sector is moving toward vertically integrated exchange models. Whether FanDuel will follow that route is not yet known. The FCM step removes one regulatory barrier but leaves others in place before full independence is possible.
Prediction market operators and their counterparties will track how this license influences contract flow, revenue shares and platform control in the months ahead. The outcome will test the durability of joint-venture structures when one party gains the regulatory tools to operate with greater autonomy.
Reporting: Casino.org News
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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