FanDuel and Kalshi want to parlay a partnership into more parlays
FanDuel and Kalshi are exploring a bold partnership that could shake up both sports betting and prediction markets. But regulators aren’t exactly fans yet.
More like FanPartner: FanDuel, the largest sports betting company in the US, has recently discussed a tie-up with prediction markets startup Kalshi that could bring parts of each other’s services to customers nationwide, according to Front Office Sports.
The benefits (in theory):
- For Kalshi: FanDuel has 12M+ users, a potential gold mine. And while Kalshi offers relatively straightforward bets (futures/outright winners of games), industry experts say it’s only a matter of time until they start offering parlays, point spreads, over/under’s, etc.
- For FanDuel: Kalshi offers access to non-sports markets (ex: “will the US say aliens exist this year?”), something FanDuel does not. Kalshi also has approval to operate in all 50 states, whereas sports betting is only legal in 39—leaving states like Texas and California untapped by the legal sports gambling industry, and potentially accessible via a prediction markets tie-up.
Tomato, to-mah-to
Traditional sports gambling sees users betting against the “house,” aka a casino, sportsbook, or offshore bookie that sets the odds and profits when bettors lose, while prediction markets are marketplaces where users bet against each other (a real fan duel), according to Kalshi.
But…Not everyone’s buying this pitch. While the prediction markets company has permission from the federal gov’t to operate nationwide, state regulators could throw a wrench into any partnership plans.
Seven states—NV, NJ, IL, MD, OH, MT, and AZ—have issued cease-and-desist orders seeking to stop Kalshi from offering sports event contracts. In response, the startup that sounds a little like a document used by Hollywood to coordinate schedules (call sheet) has sued state regulators in NJ, MD, and NV.
Big picture: It’s not just FanDuel and Kalshi—nearly all the sportsbooks and federally regulated exchanges (ex: Crypto.com + other crypto exchanges) are engaged in discussions to figure out frameworks of potential partnerships, industry sources told Front Office Sports.
