CME Group teams up with FanDuel to launch a prediction market platform in the US, as the TradFi giant officially enters the space.

On November 12, 2025, the world's largest derivatives trading exchange CME Group announced in partnership with the online fantasy sports platform FanDuel that it will launch a prediction market platform in the United States through the independent application FanDuel Predicts in December. The new platform will offer event contracts for sports events as well as event contracts for benchmark asset prices such as crypto assets, oil, and stocks, and even provide access to sports contracts for residents in states where online sports betting is illegal. This collaboration marks the official entry of TradFi giants into the prediction market sector dominated by Kalshi and Polymarket, an industry that is rapidly emerging as a legitimate new avenue at the intersection of information and finance.

CME Group's Strategic Layout and Market Positioning

Terry Duffy, Chairman and CEO of CME Group, stated at the press conference that the new platform targets “a new generation of potential participants who are currently inactive in these markets,” and that it will “dramatically expand distribution and coverage” by connecting FanDuel's millions of registered users in the U.S. This statement reveals the core logic of the collaboration—CME provides derivatives expertise and market infrastructure, while FanDuel contributes a large user base and digital delivery capabilities.

FanDuel Predicts Platform Features

Contract Types: Sports Events, Crypto Assets, Commodities, Stocks, etc.

Accessibility: Sports betting is also open to out-of-state residents.

Technical Foundation: CME Derivatives Trading Clearing Combined with FanDuel User Experience

Target users: FanDuel currently has 21 million registered users as a base.

Regulatory Compliance: Avoiding gambling legal restrictions through event contracts

Unlike traditional sports betting, the event contracts offered by prediction market platforms are considered financial instruments rather than gambling products, which allows them to operate legally across a broader geographical area. For users residing in states where online sports betting is prohibited, this provides a new way to participate in sports-related markets while creating opportunities for speculation on a wider range of economic events.

Prediction Market Competitive Landscape

The prediction market industry is currently dominated by a duopoly of Kalshi and Polymarket. Kalshi has achieved a leadership position in trading volume thanks to its regulated status in the U.S., while Polymarket is reportedly re-entering the U.S. market and may challenge this situation. Both leading players continue to expand their influence by increasing partnerships with key industries such as finance and sports.

Dynamics of Key Participants in the Prediction Market

Kalshi: Partnering with Robinhood to target retail clients, focusing on professional sports

Polymarket: Exclusive partnership with Yahoo Finance, returning to the US market

CME-FanDuel: A Collaboration Between TradFi and Sports Betting Giants

Gemini: Has submitted regulatory documents to operate a designated contract market.

Google and NHL: Collaborating with Kalshi and Polymarket at the same time

The competitive landscape is becoming increasingly heated. Robinhood has chosen Kalshi to offer sports and policy event contracts on its platform, while Polymarket has recently reached an exclusive partnership with Yahoo Finance. Google and the NHL have opted to collaborate with both Kalshi and Polymarket, indicating that some companies are unwilling to take sides. Meanwhile, the Gemini exchange, led by the Winklevoss brothers, is also vying to challenge the dominance of Kalshi-Polymarket, as reported by Bloomberg, having submitted regulatory filings to operate a designated contract market and plans to launch prediction market contracts “as soon as possible.”

CME Group Product Innovation and User Experience

The events contracts offered by the FanDuel Predicts program significantly exceed those of traditional prediction markets. In addition to common sports events and political outcomes, the platform will also include Crypto Assets prices, oil, natural gas, stocks, and other Benchmark assets, providing users with comprehensive market opinion expression tools. This diversified strategy helps attract a broader user base, from sports enthusiasts to financial traders.

The participation of the CME Group brings institutional rigor to product design. As a leading global derivatives trading exchange, CME has deep expertise in contract pricing, risk management, and clearing, which, combined with FanDuel's intuitive user interface and mass market appeal, could create a prediction market product that has both professional depth and broad market appeal.

Regulatory Environment and Compliance Considerations for Prediction Markets

The regulatory status of prediction markets in the United States remains in a gray area. The Commodity Futures Trading Commission typically has jurisdiction over such platforms, but there is uncertainty about how existing regulations are applied. The CME Group, as a long-established regulated exchange operator, could bring higher compliance standards and regulatory recognition to the industry through its involvement.

The legal qualification of event contracts is a key factor. By constructing the product as a financial contract rather than a gambling bet, the platform can circumvent many state restrictions on sports betting. However, this distinction has not yet been fully tested in judicial practice, and regulatory attitudes may evolve with market growth. The Trump administration's crypto-friendly policies provided a relatively lenient environment for innovation, but the long-term regulatory framework still needs to be observed.

Market Impact and Industry Outlook of Giants Entering the Game

The entry of CME and FanDuel validates the potential of prediction markets as an asset class. The involvement of traditional financial giants not only brings capital and credibility but may also accelerate industry consolidation and standardization processes. For existing players, competitive pressure increases, but the overall expansion of the market size could create a win-win situation.

Factors Driving Growth in Prediction Markets

User demand: Tools for expressing opinions and hedging risks.

Data Value: The information aggregation function of collective wisdom

Technological maturity: The popularization of blockchain and mobile applications

Regulatory Evolution: Increasing Acceptance of Event Contracts

Institutional participation: liquidity provision and professional market making

From the market size perspective, the prediction market has huge growth potential. Polymarket and Kalshi had a nominal trading volume of 1 billion and 1.3 billion dollars respectively in the past week, while the traditional sports betting market has an annual trading volume exceeding 100 billion dollars. If the prediction market can capture even a small portion of the traditional betting market while exploring new financial forecasting areas, its growth potential will be quite considerable.

Prediction Market Technical Architecture and Data Value

The core technological architecture of the prediction market platform faces unique challenges. It needs to handle real-time event data, manage complex settlement logic, and provide a low-latency trading experience. The existing high-performance trading infrastructure of the CME Group may provide a competitive advantage for FanDuel Predicts, especially when dealing with a large number of concurrent users and rapidly changing market conditions.

The value of data transcends the transactions themselves. The price information generated by the prediction market, as an aggregation of collective wisdom, has independent value for decision-makers and investors. As the platform scales, its data products may become an important source of revenue, providing opportunities for business model innovation beyond traditional trading fees.

Investment Perspectives and Risk Factors of Prediction Markets

For investors, prediction markets represent an emerging field with high growth potential. With the entry of traditional participants such as CME, the legitimacy and sustainability of the industry are enhanced, but it may also accelerate commercialization and profit margin pressures. Key success factors include user acquisition, regulatory relationships, and product innovation.

In terms of risk, regulatory changes remain the biggest uncertainty. The legal status challenges of event contracts may limit growth trajectories, especially in politically sensitive areas. Additionally, technological risks, market competition, and user protection issues need to be managed carefully. In a rapidly evolving environment, players who can balance innovation and compliance are most likely to achieve long-term success.