Popular sports betting platforms DraftKings (DKNG) and FanDuel are leaving the American Gaming Association (AGA), the powerful gaming industry lobby group.
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The reason for DraftKings and FanDuel’s departures is that the American Gaming Association opposes prediction markets, which both companies are in the process of launching. “As we expand into prediction markets, we recognize this direction is not aligned with the American Gaming Association’s current priorities for its member operators,” said FanDuel, which is owned by Flutter Entertainment (FLUT).
Regardless of the reason, the departure of DraftKings and FanDuel from the gaming association is surprising as the lobby group is highly influential in both the betting world and in Washington, D.C. The American Gaming Association hosts the annual Global Gaming Expo in Las Vegas, Nevada.
What’s Next for DraftKings?
The American Gaming Association is widely credited with helping to overturn a federal ban on sports betting in the U.S. The lobby group’s efforts effectively got sports betting taken out of the federal government’s control and placed at the state level, where it has been widely legalized, paving the way for DraftKings and FanDuel. Wall Street views the two companies as an online sports betting duopoly.
DraftKings and FanDuel are each racing to launch their own prediction markets so that they can compete with firms such as Kalshi that offer federally regulated event contracts that enable people to bet on everything from the likelihood of future interest rate cuts to the outcome of political elections.
The American Gaming Association says it opposes prediction markets because they blur the line between sweepstakes and sports events and are more akin to blatant gambling.
Is DKNG Stock a Buy?
The stock of DraftKings has a consensus Strong Buy rating among 28 Wall Street analysts. That rating is based on 23 Buy and five Hold recommendations issued in the last three months. The average DKNG price target of $44.25 implies 51.44% upside from current levels.
