DraftKings and FanDuel abruptly cut ties with the American Gaming Association (AGA) after heightened tensions around the future role of prediction markets in the legal betting ecosystem. The conflict surfaced during the AGA’s Public Policy Committee meeting in Washington, D.C., where discussions centered on whether sports event contracts — regulated federally by the Commodity Futures Trading Commission (CFTC) — fit within the traditional state-regulated gambling structure.
Following the PPC meeting, the AGA’s executive committee convened privately, and sources say the divide had grown sharp enough that both operators withdrew before a vote on their membership could occur. The AGA has taken an explicit stance against federally regulated sports event contracts, deepening the rift with DraftKings and FanDuel, both of which intend to enter the prediction market sector.
FanDuel acknowledged the company’s departure in a statement: “FanDuel has built our business by maintaining strong industry partnerships. We value the spirit of collaboration that comes with these relationships. But as we expand into prediction markets, we recognize this direction is not aligned with the American Gaming Association’s current priorities for its member operators. After thoughtful consideration, we have decided to step back from our AGA membership at this time.”
DraftKings offered a similar explanation, “As the company’s business strategy evolves — including with prediction markets — DraftKings determined that its plans no longer fully align with the AGA’s direction in certain areas and has decided to relinquish its membership.”
The AGA confirmed both exits, stating, “In discussion with DraftKings and FanDuel, the AGA has accepted their request to relinquish their memberships, effective immediately. We wish them the best, and we expect to maintain close ties in our mission to promote and protect legal, regulated gaming.”
Tech Operators and Casinos Diverge on Market Strategy
The departures highlight sharply contrasting approaches among companies offering legal sports wagering. Traditional casino operators — such as Caesars, MGM, and Penn Entertainment — have steered clear of prediction markets, while digital-first companies likeFanDuel, DraftKings, Underdog, and PrizePicks have leaned into the model.
The split reflects broader business differences. Casino operators maintain large physical footprints, significant debt obligations, and extensive staff. Tech betting companies largely operate online and manage far fewer tangible assets, enabling them to adopt new product lines more quickly.
Underdog already runs limited event-contract markets in 22 states and also provides technology to Crypto.com. PrizePicks launched its prediction platform in partnership with Kalshi, while both DraftKings and FanDuel recently revealed plans to debut CFTC-regulated products — DraftKings via its Railbird acquisition and FanDuel through a partnership with CME. Both committed to geofencing tribal lands and avoiding jurisdictions where they offer state-regulated sports betting.
AGA May Now Push a More Unified Message
Prediction markets surged into public attentinon earlier this year when Kalshi began posting Super Bowl-related contracts. Regulators in several states have since argued that these federally regulated products undercut state authority, lack responsible gambling oversight, and do not pay state taxes. Kalshi currently faces litigation in multiple jurisdictions, and Nevada recently announced FanDuel had surrendered its license while DraftKings withdrew its applications.
Source:
“DraftKings, FanDuel Resign From AGA”, ingame.com. November 17, 2025
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