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Fanatics, which has grown its sports betting operations since starting as a retail sportsbook out of FedEx Field in January 2023, is moving into a new phase this week, as it launches prediction markets in 24 states.
Fanatics said its new Fanatics Markets platform opened up in 10 states on Dec. 3. California was part of a third wave of states it launched in two days later, which also included Florida and Washington, which have legal sports betting, and Georgia and Texas, which, like California, do not.
Fanatics CEO Matt King said it’s the next logical step for the company that began in 1995 as a retail outlet in Jacksonville, FL, selling Jaguars merchandise.
“For years, Fanatics has given fans new ways to enhance their fandom through team merchandise, collectibles, tickets, gaming, events, and more. Now, with Fanatics Markets, we’re giving fans a safe, and intuitive way to engage with the moments that move sports and culture, and to pick a side.”
Sportsbooks turn attention to prediction markets
Fanatics Markets is being touted as “a simple, user-friendly prediction market platform built to let people trade on the moments shaping sports, finance and culture.” Its website showcases an NBA game outcome as the sample prediction opportunity on its site.
In getting to market this week, Fanatics is the first of three sports betting operators to launch a prediction market after publicizing their intentions. FanDuel and DraftKings also reportedly have prediction market offerings in the works.
Underdog, which made its name in daily fantasy sports and was gearing up to enter the Missouri market as a sports betting operator before pulling out just days before the Dec. 1 statewide launch date, also announced that it was pivoting to prediction markets.
Kalshi’s recent victory
Fanatics could benefit from a recent court decision involving Kalshi’s prediction market operations in California.
In September, three California tribes – the Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians – sought an injuction against Kalshi, invoking the Indian Gaming Regulatory Act (IGRA) and the state’s Tribal-State Gaming Compacts to try to keep Kalshi from operating on their lands in the Golden State.
But last month, a judge from the United States District Court Northern District of California ruled in Kalshi’s favor on the injunction issue, determining that the IGRA does not apply to Kalshi. It further elaborated that the Unlawful Internet Gambling Enforcement Act, and not IGRA, applies to Kalshi’s operations, and its status as a registered entity under the Commodity Exchange Act keeps its activity from being considered bets or wagers under UIGEA rules.
