Tensions flare as FanDuel quietly pushes into unregulated gaming territory, drawing sharp criticism from California’s tribal leaders.
Tribal Leaders Call Foul on FanDuel
The California Nations Indian Gaming Association is accusing FanDuel of sidestepping the law and threatening tribal sovereignty with its latest foray into prediction markets.
“These platforms seek to bypass California law and impose unlawful gaming on tribal lands without consent,” said CNIGA Chairman James Siva, warning that the move could spark legal or even congressional action. “Prediction markets tied to sports betting are illegal, unregulated gambling and are already the subject of multiple court challenges nationwide.”
Sportsbooks Split and Launch Their Own Path
FanDuel, along with DraftKings and Fanatics, made waves late last year by walking away from the American Gaming Association just before unveiling their own prediction market platforms. Unlike fully regulated sports betting operations, these markets rely on a peer-to-peer model, where users take opposing sides of a given outcome—like a point spread—without the house taking direct bets.
They’ve rolled out sports-related prediction products in states like California, Texas, and Georgia—all major markets where traditional sportsbooks are still off-limits. It’s a calculated workaround, giving operators a toehold in massive untapped regions without waiting for lawmakers or voter approval.
No Ballot, No Bet—At Least Not Yet
Sports betting remains a no-go in California for now. After a bruising and expensive battle between commercial sportsbooks and tribal operators in 2022, voters overwhelmingly shot down both competing ballot initiatives. Since then, tribal leaders have insisted that any future attempt must come through them—and with prediction markets now in the mix, they’re less inclined to trust outside operators.
There’s almost no chance of a new sports betting question making it onto the 2026 ballot, meaning the next realistic shot wouldn’t come until 2028. That pushes the possible launch of legal sports betting in California all the way to 2029—if the measure even passes.
Prediction Markets Find a Loophole
Thanks to the federal Commodity Futures Trading Commission (CFTC) staying quiet under the Trump administration, companies like Kalshi and Polymarket have surged forward with prediction market offerings. Kalshi, which boasts Donald Trump Jr. as an adviser, successfully argued for its right to offer contracts on political and sports events—and sports betting giants took notice.
FanDuel and others have leaned into this ambiguity, using it as a backdoor into restricted markets. FanDuel Predicts, for example, is now live in all 50 states, although only 16 allow sports-related predictions. In the remaining states, users can still bet on financial markets like oil or gas prices.
Risky Move for Tribal Partnerships
FanDuel may have complicated its long game. While the company has brought several tribal gaming leaders into the fold since 2022, this aggressive prediction market rollout is straining those bridges. Many tribes are now backing lawsuits aiming to shut these markets down, arguing they violate federal law and infringe on tribal gaming rights.
A federal judge declined to issue an injunction against Kalshi’s operations last fall, but that case—and others—are still active. The outcome could set a major precedent, potentially defining where the line is drawn between legal prediction markets and illegal sports betting.
How FanDuel Predicts Works
Prediction markets aren’t your typical sportsbook. Instead of placing bets against a bookmaker, users trade contracts against each other. A correct prediction pays out $1 per contract, and both parties must match up for a trade to occur. These platforms also lower the betting age to 18, compared to 21 for most traditional sports betting.
FanDuel Predicts operates separately from the main FanDuel wallet, meaning users can’t move funds freely between platforms. Still, it offers a familiar login experience and a growing array of options for sports, commodities, and economic trends—skirting regulatory lines while aiming to stay technically compliant.
