Fanatics Predicts Launches in 24 States, Challenging Sports Betting Landscape
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Americans now have a new avenue for wagering on events – from sports outcomes to election results – through Fanatics Predicts, a platform operating in 24 states where traditional sports betting remains illegal. This move by the sports merchandise giant positions it ahead of major players like FanDuel and DraftKings, who are expected to enter the prediction market space in 2026.
The emergence of these platforms, including existing player Kalshi, represents a novel approach to event wagering. Unlike conventional sportsbooks, these “prediction markets” involve users wagering against each other on the outcomes of events, framed as sports event contracts. This distinction is critical, as it shifts regulatory oversight from state-level gaming commissions to the federal Commodity Futures Trading Commission (CFTC).
“For years, Fanatics has given fans new ways to enhance their fandom through team merchandise, collectibles, tickets, gaming, events and more,” said Matt King, Chief Executive Officer, Fanatics Betting and Gaming. “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 and profit along the way if their prediction is correct.”
A Taxing Question for States
A key difference between traditional sports betting and these prediction markets lies in taxation. States do not currently collect taxes on wagers or revenue generated through prediction markets, a potential point of contention as the platforms gain traction. This lack of state revenue is raising concerns among regulators, particularly in states actively considering legalizing traditional sports wagering.
Legal Challenges and Regulatory Scrutiny
The prediction market model isn’t without its challenges. Kalshi, a pioneer in the space, has faced legal pushback, including lawsuits and cease-and-desist letters from state sports wagering oversight boards. A recent class action lawsuit, filed during the week of Thanksgiving, alleges that Kalshi is operating unlicensed sports betting and lacked transparency regarding who participants were wagering against.
Fanatics is currently live in Alaska, Delaware, Hawaii, Idaho, Maine, New Hampshire, North Dakota, Rhode Island, South Dakota, Utah, Alabama, California, Florida, Georgia, Minnesota, Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, South Carolina, Texas and Washington as of Wednesday.
Expanding Beyond Sports
Fanatics’ initial offerings focus on sports, finance, economics, and politics. However, the company plans to significantly expand its scope in early 2026 to include markets for crypto, stocks/IPOs, climate, pop culture, tech/AI, movies, and music. This ambitious expansion signals a broader vision for prediction markets as a platform for wagering on a wide range of future events.
Wisconsin Lawmaker Warns of Unregulated Growth
The potential for prediction markets to circumvent state regulations is causing concern among lawmakers. A Wisconsin representative recently cautioned colleagues that these platforms could dominate the state’s wagering landscape if swift action isn’t taken to legalize sports betting through the state’s 11 tribes. “If we leave a gray area in state law, national prediction platforms will fill it without our compact framework, Wisconsin oversight, or Wisconsin consumer safeguards,” wrote Wisconsin Rep. Tyler August, R-Walworth.
The rise of Fanatics Predicts and similar platforms marks a significant development in the evolving world of event wagering, raising complex questions about regulation, taxation, and consumer protection. As these markets mature, states will likely grapple with how to balance innovation with the need for oversight and revenue generation.
