The two giants of US sports betting are reshaping their strategy. DraftKings and FanDuel have split from the American Gaming Association (AGA) as both companies push deeper into prediction markets and shift their lobbying focus to Washington, D.C. The move signals a major realignment in how the industry's most powerful operators see their future, with significant implications for bettors and regulators alike.
Quick answer: In 2026, DraftKings and FanDuel left the American Gaming Association as they expanded into federally regulated prediction markets and increased federal lobbying. Together the two operators control about 80% of the US online sports betting market, so their strategic pivot carries outsized weight across the industry.
Why the Operators Left the AGA
The American Gaming Association has long been the leading trade group representing the US casino and sports betting industry. DraftKings and FanDuel's departure reflects a growing divergence between traditional state-licensed gambling and the emerging world of federally regulated prediction markets. As these operators chase a new business model, their interests have increasingly diverged from the AGA's traditional membership, prompting the split.
The Prediction-Market Land Grab
Prediction markets, overseen federally by the Commodity Futures Trading Commission, have exploded in popularity. Combined monthly trading volume on platforms like Kalshi and Polymarket more than quadrupled in eight months, jumping from less than $5 billion in September 2025 to $24 billion in April 2026. For operators facing state-by-state licensing battles, federally regulated event contracts offer a potential nationwide footprint without navigating 50 separate regulators.
To understand how these markets differ from traditional wagering, our betting fundamentals guide explains the mechanics of odds and event-based contracts.
FanDuel Shifts Its Prediction Partner
FanDuel's path into prediction markets has not been smooth. Its partnership with CME Group reportedly underdelivered, and the company is now set to offer markets from CME competitor Crypto.com, despite CME owning a majority stake in FanDuel Predicts. The reshuffle illustrates how quickly alliances are forming and breaking as operators race to establish positions in a fast-growing but uncertain space.
Lobbying Moves to Washington
After years of focusing on state legislatures, the market leaders are turning to the nation's capital. FanDuel spent $1.1 million on federal lobbying in 2025, seven times more than the previous year, while DraftKings spent roughly $900,000, more than double its prior outlay. This surge reflects mounting federal scrutiny of online gambling and the operators' desire to shape any national framework that emerges.
Market Dominance Raises the Stakes
With FanDuel holding roughly 43.6% and DraftKings 36.4% of the national online market, the pair control about 80% of US sports betting. Their combined influence means that wherever they go, the industry tends to follow. A coordinated pivot toward prediction markets could accelerate the entire sector's shift away from the traditional state-licensed model. Bettors can compare the two leaders through our DraftKings review and FanDuel review.
What It Means for Bettors
For everyday bettors, the pivot raises practical questions. Prediction markets operate under different rules than sportsbooks, with event contracts rather than traditional odds, and consumer protections that are still evolving. Meanwhile, recent headlines about FanDuel layoffs, its third workforce reduction in under a year, suggest the operators are aggressively reallocating resources toward this new frontier. Bettors should keep an eye on how these changes affect product offerings and promotions, and continue comparing the best sportsbook promos as the landscape shifts.
A Regulatory Crossroads
The pivot lands amid intense regulatory debate. The CFTC has proposed rules that could bar prediction markets from offering certain sports contracts, such as those tied to officiating or player injuries, while several states have challenged the legality of these platforms. How that tension resolves will determine whether the operators' bet on prediction markets pays off or runs into the same patchwork of state objections they hoped to escape.
The Appeal of Federal Regulation
The core attraction of prediction markets for operators is structural. Traditional sports betting requires a separate license in every state, a slow and expensive process that has left large parts of the country off-limits. Federally regulated event contracts, by contrast, theoretically allow nationwide access under a single regulatory umbrella. For companies that have spent years and millions of dollars fighting state-by-state battles, that prospect is enormously appealing, even if the legal foundation is still being tested.
This explains why even fierce competitors like DraftKings and FanDuel are moving in the same direction at the same time. The potential prize, unfettered national reach, is large enough to justify the regulatory risk, and neither company wants to cede first-mover advantage to the other or to dedicated prediction-market platforms.
Winners and Losers in the Shift
If prediction markets succeed, the winners could include consumers in states without legal sports betting, who would gain access to event-based wagering for the first time. The losers could include state treasuries that rely on sports betting tax revenue, since federally regulated contracts may not generate the same state-level taxes. Traditional casinos and smaller sportsbooks that lack the resources to pivot may also find themselves squeezed. The realignment is far from settled, and its ultimate winners will depend heavily on how regulators respond.
Frequently Asked Questions
Why did DraftKings and FanDuel leave the AGA?
Both operators left the American Gaming Association in 2026 as they pivoted toward federally regulated prediction markets, a strategy that diverged from the trade group's traditional focus.
How big are prediction markets in 2026?
Combined monthly trading volume on Kalshi and Polymarket more than quadrupled in eight months, rising from under $5 billion in September 2025 to $24 billion in April 2026.
How much of the US betting market do DraftKings and FanDuel control?
FanDuel holds about 43.6% and DraftKings about 36.4% of the national online market, giving the pair roughly 80% combined market share.
What regulatory challenges do prediction markets face?
The CFTC has proposed rules limiting certain sports contracts, and several states have challenged the platforms' legality, creating uncertainty for operators expanding into the space.
Conclusion
DraftKings and FanDuel's exit from the AGA marks a pivotal moment in the evolution of US gambling, as the industry's leaders bet their future on prediction markets and federal influence. The outcome will reshape how Americans wager for years to come. Stay informed with the DeucesCracked latest articles and follow the story as it unfolds.
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