FanDuel & DraftKings break ranks with AGA: US Crisis
FanDuel and DraftKings left the American Gaming Association amid tensions over the rise of prediction markets, unleashing an unprecedented rift in the U.S. iGaming industry. The dispute pits operators, regulators, and new platforms like Kalshi and Polymarket against each other, as regulatory pressure and stock market impact grow.
The U.S. iGaming industry is experiencing one of its biggest upheavals in years. FanDuel and DraftKings, undisputed leaders in online betting, decided to leave the American Gaming Association (AGA), breaking the sector’s historic unity and marking a turning point in the dispute over the legality and future of prediction markets.
The decision opens a deep crack between the major online gaming brands and the main body representing the industry in Washington D.C., weakening its lobbying power while new platforms such as Kalshi, Polymarket, or the newly announced Truth Predicts — linked to former President Donald Trump’s social network — advance relentlessly in the U.S. market.
An announced conflict: the rise of prediction markets
The boom of binary bets and prediction markets has been putting pressure on the regulated ecosystem for months. These platforms, which allow trading contracts based on sports, financial, or political outcomes, operate outside traditional gaming frameworks and under the still unclear supervision of the Commodity Futures Trading Commission (CFTC), which currently lacks formal leadership.
Kalshi, the most advanced in the sector, has raised more than USD 2 billion in recent investments, driven by a federal administration considered ideologically aligned with this model. It is no coincidence that Donald Trump Jr. acts as a strategic advisor for Kalshi and Polymarket.
Far from fighting the trend, FanDuel and DraftKings decided to join it. FanDuel will launch FanDuel Predicts in partnership with CME Group, while DraftKings acquired Railbird to develop DraftKings Predictions. Both initiatives confirm a profound strategic shift: prediction markets are no longer an external threat but the next major business vertical.
The break with the American Gaming Association
The simultaneous launch of these new platforms was accompanied by an institutional blow: both operators resigned their AGA membership, which has historically defended that prediction markets should be regulated and taxed the same as sports betting.
The AGA, surprised by the move, publicly stated that it “hopes to maintain working relationships” with both companies, although the sector interpreted the event as the biggest internal break since the repeal of PASPA in 2018.
Regulatory reaction: warnings from Massachusetts
Tensions escalated further when the Massachusetts Gaming Commission (MGC) warned licensed operators that offering sports contracts through prediction market platforms could violate state law.
For DraftKings — originally from Massachusetts itself — the message was clear: the regulator warned that any sanction in another state could jeopardize its suitability to operate locally.
Financial impact: the market punishes uncertainty
As the industry digests the split, volatility hits the iGaming giants on Wall Street.
In the past week:
- FanDuel/Flutter Entertainment fell 16.67%
- DraftKings dropped 5.35%
The shares reflect fears of a prolonged regulatory conflict, uncertainty about the legal fit of prediction markets, and the possible erosion of the traditional sports betting business.
Kalshi, the emerging winner
Amid growing tension, two names stand out as the winners of this internal war: Tarek Mansour and Luana Lopes Lara, founders of Kalshi.
Their platform has managed to open a new market, attract massive capital, and challenge the traditional regulatory model, forcing even the largest companies in the sector to adapt or risk being left behind.
The battle for the future of prediction markets is just beginning, and its outcome could completely redefine the regulatory structure and business model of U.S. iGaming.
Tags: USA, predictive market, Kalshi, Fanduel, DraftKings, Flutter, prediction markets