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FanDuel and DraftKings on Tuesday said they are quitting the American Gaming Association, the leading trade organization representing casinos, gaming manufacturers and sportsbooks.
In separate announcements, the companies said they were abandoning their AGA memberships because the direction of online betting — increasingly tied to booming prediction markets — does not align with the trade organization, they said.
It’s the latest escalation of a growing rift in the gambling world as prediction platforms like Kalshi and Polymarket, which allow customers to trade on events across pop culture, news and politics, skyrocket in popularity and push into sports.
The AGA has taken a firm stand against prediction markets offering sports betting. It plans to introduce a resolution at a board meeting on Tuesday that would exclude from membership any company that offers prediction markets, according to people familiar with the matter who declined to be named speaking about internal matters.
Last week, Flutter-owned FanDuel announced it would launch a prediction platform called FanDuel Predicts in December in partnership with the CME. It plans to offer sports prediction trades only in states where sports betting isn’t legal.
“We recognize this direction is not aligned with the American Gaming Association’s current priorities for its member operators. After thoughtful consideration, we have decided to step back from our AGA membership at this time,” a FanDuel spokesperson told CNBC.
DraftKings recently acquired Railbird, which has a federal license to offer event contracts.
“As the company’s business strategy evolves—including with prediction markets—DraftKings determined that its plans no longer fully align with the AGA’s direction in certain areas and have decided to relinquish its membership,” a DraftKings spokesperson told CNBC.
The AGA represents both commercial and tribal members, sometimes with competing interests.
The trade organization said in a statement it had accepted FanDuel’s and DraftKings’ “request to relinquish their membership.”
“We wish them the best, and we expect to maintain close ties to our mission to promote and protect legal, regulated gaming.”
FanDuel and DraftKings are also represented by the Sports Betting Alliance, which conducts more specific lobbying and outreach efforts on behalf of sports betting operators.