In a move that would have been unthinkable just a year ago, DraftKings and FanDuel — the two biggest names in American sports betting — have officially walked away from Nevada and quit the American Gaming Association.

The reason? Prediction markets. And the fight for the future of sports betting.

The Quick Hit

• What happened: DraftKings and FanDuel resigned from the AGA and withdrew from Nevada licensing
• The damage: Nevada regulators say prediction markets are "incompatible" with their gaming regime
• Why you should care: The biggest sportsbooks in America just chose prediction markets over the most iconic gambling state
• The move: The industry is fracturing, and nobody knows what the landscape will look like in a year

The AGA Breakup

FanDuel and DraftKings announced they're quitting the American Gaming Association — the trade organization that represents the casino and gaming industry.

The reason is simple: The AGA actively opposes prediction markets, viewing them as unregulated competition that operates outside their mission. But DraftKings and FanDuel? They see prediction markets as the future.

The rift was reportedly so significant that both companies resigned BEFORE a vote on their status could be taken. They didn't wait to get kicked out — they walked out.

In their announcement, both companies essentially said the same thing: the direction of online betting is increasingly tied to prediction markets, and that doesn't align with what the AGA stands for.

The Nevada Situation

Here's where it gets really spicy.

Nevada — the most iconic gambling destination in the world, the birthplace of modern sports betting — just lost its two biggest potential online sportsbook operators.

FanDuel surrendered its license. DraftKings withdrew its applications.

Nevada regulators made it clear: prediction markets are "incompatible" with Nevada's gaming regime. You can't operate a prediction markets platform AND hold a Nevada gaming license.

So DraftKings and FanDuel made their choice. They chose prediction markets.

Think about what that means. These companies looked at the Nevada market — Las Vegas, the Strip, the sports betting capital of the world — and said, "Nah, we're good."

What's Coming

Both companies have prediction markets launches coming:

FanDuel Predicts: A standalone app in partnership with CME Group (the derivatives marketplace). Set to launch this month (December 2025).

DraftKings Predictions: Coming soon, built on technology from Railbird, a prediction market company DraftKings acquired in late 2024.

These platforms will let users trade "event contracts" — which is basically sports betting, but regulated by the CFTC instead of state gaming commissions.

The key advantage? They can operate in states where sports betting isn't legal. Including massive markets like California and Texas.

Why This Matters

The gambling industry is splitting into two camps:

Camp 1: Traditional Gaming

• State-licensed sportsbooks
• Casino operators
• The AGA
• Nevada regulators

Camp 2: Prediction Markets

• DraftKings
• FanDuel
• Robinhood
• Kalshi
• Crypto.com

These two camps are now openly at war. States are suing prediction markets operators. The AGA is lobbying against them. And the biggest names in sports betting just switched sides.

The Irony

The funniest part? This whole prediction markets boom only happened because of how successfully DraftKings and FanDuel lobbied to legalize sports betting state by state.

They spent years convincing state legislators that regulated sports betting was better than the black market. They built the infrastructure. They educated the public.

And now they're pivoting to a different model that potentially makes all that state-by-state work... less relevant.

The Risk

To be clear, this could all blow up in their faces.

States are fighting back. Connecticut, New Jersey, Nevada, and others have already taken action against prediction markets operators. Courts will eventually decide whether event contracts are "gambling" or "trading."

If the courts rule against prediction markets, DraftKings and FanDuel will have abandoned the AGA and Nevada for nothing.

But if courts rule in favor? They'll have a massive first-mover advantage in a market that reaches all 50 states.

It's a bet. And these companies are betting big.

The Bottom Line

The American gambling industry is in the middle of a civil war, and the biggest sportsbooks just picked a side.

DraftKings and FanDuel are betting that prediction markets are the future — so much so that they're willing to walk away from Vegas and the trade organization that represents their industry.

Whether that bet pays off remains to be seen. But one thing is clear: the sports betting landscape a year from now will look nothing like it does today.

Buckle up, degenerates. Things are about to get interesting.