CME Group Waiting On Government’s Greenlight To Offer Sports Event Contracts With FanDuel

CME Group CEO Terry Duffy make clear the corporate’s potential foray into sports activities occasion contracts throughout its Q3 2025 earnings name.

If the federal authorities in the end provides the nod for prediction markets to proceed providing sports activities contracts, CME might be blissful to partake, Duffy told analysts on Wednesday.

“CME Group is just not opposed, not against itemizing sports activities occasions on our contracts, on our DCM (Designated Contract Market),” Duffy stated. “What is critically essential is the federal authorities has to make sure that they approve these contracts. I received’t sit on the sidelines.”

Moving ahead with FanDuel

While sports activities was not talked about when CME Group introduced in August a three way partnership with FanDuel, Bloomberg News reported final week that CME is “planning to debut monetary contracts tied to each sports activities video games and financial indicators by the tip of the yr.”

Per Duffy, the Bloomberg article, titled “CME Plans to Launch Sports Contracts to Compete With Kalshi”, didn’t break a lot floor, as he has maintained from the leap that CME is desirous about sports activities.

“Headlines may be very deceiving,” Duffy clarified. ”… I’ve stated quite a few instances on podcasts, publicly on tv, to you, to others, that my companion at FanDuel, when they’re ready to maneuver ahead with occasions on sports activities, I might be ready on day one so as to provide that to them on my DCM.” 

The caveat? The authorities should log out.

“As lengthy because the U.S. authorities is just not going to object to the self-certification of those and take into account these swaps and never gaming, it doesn’t matter what my opinion or anyone else’s.

“That’s the federal government’s opinion, and we’ll proceed accordingly. That is but to be determined.”

Parlays are problematic for prediction markets

Much of the discuss round prediction markets’ disruption of the sports activities betting trade has been about parlays, an enormous revenue driver for sportsbooks and merchandise that conventional sports activities betting operators consider give them a serious benefit over the upstarts. Kalshi, although, has been slowly rolling out “mixture” trades.

For monetary exchanges to supply an occasion contract, there should be an financial consequence tied to the occasion. Event contracts are designed as hedges in opposition to sure financial situations.

That’s the authorized rationale, anyway.

While some have a tough time shopping for the argument that the Broncos beating the Cowboys by 3.5 factors on Sunday is de facto an financial hedge, the case {that a} parlay may be an financial hedge is much more troublesome to make.

Duffy stated CME is just not contemplating moving into parlays, for each operational and regulatory causes.

“A swap is categorized or outlined as one thing that’s commercially or economically helpful,” he defined. “When you begin moving into parlays on prediction on sports activities, I believe typically you is likely to be crossing that line.

“Is this professional or not? Is this a sports activities playing contract, or is that this an economically helpful and has the publicity for the consumer that’s commercially regarding, which is the definition of a swap contract right this moment? It has to have an financial profit to it.”

The CFTC may weigh in on prediction markets providing parlays as soon as the federal government shutdown ends, Duffy famous.

Future is vibrant

Duffy participated in – in reality, sort of starred in – final month’s SEC/CFTC joint roundtable on regulatory harmonization that additionally featured Kalshi’s Tarek Mansour and Polymarket’s Shayne Coplan.

While Duffy pushed again on the completely different remedy prediction markets and conventional exchanges obtain from the CFTC and SEC, respectively, he made it clear that he’s “massively excited” concerning the future and taking part in new asset courses.

“I simply did the cope with FanDuel, as you realize, I’m all in on these things,” Duffy stated then.

On CME’s earnings name, he reiterated, “The announcement with FanDuel is essential for CME Group. We’re 13 million potential accounts that may have entry to CME Group’s merchandise, however extra importantly, have entry to have a view of CME Group and our distribution of our product strains for the long run.”

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