FanDuel reportedly in talks with Kalshi on prediction market deal

U.S. sports betting leader FanDuel is allegedly in discussions with federally regulated event contract platform Kalshi over a potential partnership that could grant the sportsbook access to prediction markets across all 50 states, according to a report by Front Office Sports.

The reported negotiations mark a potential shift in the U.S. betting industry, with FanDuel considering a strategic entry into the controversial prediction market sector, long regulated by the Commodity Futures Trading Commission (CFTC) rather than state gaming bodies.

FanDuel, a subsidiary of Dublin-based Flutter Entertainment, currently operates in 25 U.S. jurisdictions. Kalshi, in contrast, is live nationwide and regulated at the federal level, which may allow FanDuel to bypass state-specific restrictions and taxes. This includes entry into major states like California, Texas, and Florida, where sports betting remains illegal or restricted.

During Flutter’s first-quarter earnings call in May, Flutter CEO Peter Jackson confirmed the company is evaluating the space. “We're very thoughtful about it, particularly having seen so much success in terms of having the best product (BetFair) in the market,” he said, referring to Flutter’s ownership of the U.K.-based betting exchange.

If finalized, the partnership could allow FanDuel to offer new types of markets – including those on elections and pop culture – outside of traditional gaming laws. Kalshi began offering sports-related contracts this year and has expanded into various leagues, including the NFL, NBA, and MLB.

The deal could also help Kalshi scale operations by tapping into FanDuel’s 12 million-plus active user base. Liquidity remains a challenge for Kalshi, and a major sportsbook partnership could significantly enhance market volume and visibility.

However, legal uncertainty still looms. Kalshi has received cease-and-desist letters from several states, including New Jersey, Maryland, and Nevada, which have challenged its right to offer sports event contracts. The company has responded with lawsuits and has already secured favorable federal rulings in New Jersey and Nevada.

“We are literally like a financial exchange, but the underlying trading is events,” Kalshi co-founder Tarek Mansour said in April. “The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.”

In Maryland, legal observers are watching closely as a judge weighs whether Kalshi’s shifting arguments on jurisdiction undermine its case. The outcome may affect whether state regulators can override the CFTC’s authority.

Meanwhile, the CFTC is awaiting Senate confirmation of Brian Quintenz, a nominee to chair the agency and a former Kalshi board member. Quintenz has said he would recuse himself from decisions involving the company, though he has publicly stated that prediction markets fall under federal purview “unless Congress or the courts decide otherwise.”