TLDR
- CME Group CEO Terry Duffy said some sports prediction markets amount to gambling
- CME certified new sports event contracts for tennis, golf, and college football
- FanDuel Predicts expanded its offering through a deal with Crypto.com’s Nadex
- CME is suing the CFTC over its approval of Kalshi’s Bitcoin perpetual futures
- Flutter’s CEO called prediction markets a strong customer acquisition opportunity
CME Group CEO Terry Duffy said some sportsbook-style prediction markets are gambling. He made the comment during the exchange’s second-quarter earnings call on July 22.
Duffy drew a line between CME’s own sports-event contracts and other products on the market. He pointed to small parlays as an example of what he does not consider a real market.
The comment does not mean CME avoids sports contracts entirely. The exchange already lists a growing number of sports-linked contracts, including soccer combos.
Duffy has raised this concern before. On the call, he repeated his view that broader sports prediction markets could end up before the Supreme Court.
“A lot of these prediction markets on sports are gambling,” Duffy said. He added that CME does not want to be part of that category right now.
Duffy also said some contracts are open to manipulation. He specifically named small parlays as an example.
CME President and CFO Lynne Fitzpatrick said the exchange offers a narrower product set than some competitors. She said this is intentional, to meet regulatory requirements.
CME Expands Its Sports Contract Lineup
One day before the earnings call, CME certified new sports event contract swaps. These covered tennis tournament champions, golf finishing positions, and college football outcomes, including the national championship.
CME stated in its filing that the contracts qualify as swaps under the Commodity Exchange Act. This places them under the CFTC’s jurisdiction.
The exchange also said the contracts do not count as gaming under federal law. It cited the financial and economic weight of the underlying sporting events.
CME said the new contracts are not easily manipulated. It pointed to league oversight, betting-market monitoring, and its own surveillance systems as safeguards.
CME’s Legal Fight and the Crypto.com Deal
CME has taken a public stance on prediction markets beyond its own contracts. Last month, it sued the CFTC over its approval of Kalshi’s Bitcoin perpetual futures contracts.
CME argued the products raised concerns about market integrity. Earlier that month, Duffy warned that fast-growing speculative trading tied to predictions could become a problem.
FanDuel Predicts is the prediction market joint venture between CME and Flutter Entertainment’s FanDuel. It has kept expanding its sports offering.
In June, FanDuel Predicts announced a partnership with Crypto.com’s Nadex. This lets FanDuel Predicts offer contracts from Nadex alongside those already listed on CME.
The deal means FanDuel Predicts now sources contracts from more than one CFTC-regulated exchange. It no longer depends only on CME’s own listings.
In May, Flutter CEO Peter Jackson called prediction markets a strong opportunity for gaining new customers. He said the company planned to grow its sports coverage and expand combination markets.
Those plans moved forward with the Crypto.com partnership the following month. FanDuel Predicts now offers a wider mix of sports, entertainment, and combination contracts across two regulated exchanges.
