FanDuel gains its own FCM as New Venture III is approved

FanDuel secured registration of a new futures commission merchant (FCM) on 5 October 2026, when New Venture III LLC was approved as a member of the National Futures Association (NFA). The listing follows a six-month review and names FanDuel Group as a principal of the entity; the decision creates a potential route to operate its prediction-market business outside the structure it shares with CME Group.

## What FanDuel did and when

New Venture III LLC was registered as an FCM and approved as a member of the National Futures Association on 5 October 2026, according to public NFA records. FanDuel Group is listed as a principal of the company. The firm filed the application six months before approval. The new FCM does not make FanDuel an exchange nor allow it to list contracts by itself, but it gives FanDuel control of an intermediary entity that can route relationships to exchanges that supply contracts to [FanDuel Predicts](/sports).

## Why the move coincides with the change of contract providers

During summer 2026 FanDuel reorganised where it sources contracts for FanDuel Predicts. Sports contracts and other non-financial events were moved to OG Prediction Markets, Crypto.com’s platform, while CME Group continued to supply financial markets. Flutter Entertainment, FanDuel’s parent company, said in August that the change was made “in coordination with CME” and would allow FanDuel Predicts to launch new products faster.

## How the new FCM differs from the prior structure

FanDuel had already been operating FanDuel Predicts through FanDuel Prediction Markets LLC, an FCM created by the joint venture with CME. That entity sits inside FanDuel Prediction Markets Holdings LLC, owned 51% by CME and 49% by FanDuel. In practice, CME receives roughly 50% of gross revenues generated by FanDuel Predicts before promotional spend, according to Flutter’s first-quarter results. FanDuel bears app support costs: sales and marketing, promotions and non-exchange-linked expenses.

New Venture III gives FanDuel an FCM outside that ownership scheme. It is unclear whether revenues generated via a FanDuel-owned FCM would be subject to the revenue split with CME or the contractual restrictions both parties have publicly referenced.

## What executives said and CME’s responses

On the May earnings call, then-CEO of Flutter, Peter Jackson, previewed the strategy: he said he wanted FanDuel to be able to “adapt and do what we need to win,” and described the application as a means to give the company “greater optionality.”

CME initially responded that the filing did not imply a change to the relationship. On the April earnings call, CME President and CFO Lynne Fitzpatrick emphasised the difference between filing an application and actually launching an FCM, and noted there are "contractual restrictions" on operating alternative venues while the alliance with FanDuel exists. Terry Duffy, CME’s chairman and CEO, was more forceful: “They can’t just obtain or buy an FCM license and compete with the joint venture we set up with them,” he said.

“This does not mean a change in our relationship or the partnership going forward,” Lynne Fitzpatrick said in April, commenting on FanDuel’s filing.

“They can’t just obtain an FCM license and compete with the JV we formed,” Terry Duffy stated publicly on the topic.

## The distinction between financial markets and sports betting that mattered

CME made clear its initial interest in the alliance was not sports, but markets and distribution. In its second call of the year, Terry Duffy said the company preferred to keep sports contracts outside its activities, calling many of those contracts bets rather than traditional markets. That stance paved the way for FanDuel to move its sports contracts to OG Prediction Markets in August while CME continued to provide financial markets.

## What New Venture III could enable next

The approval of New Venture III does not oblige FanDuel to use it, but it gives the company a fully controlled platform to manage broking and connections to external exchanges. FanDuel has already shown it can integrate another exchange via its existing FCM when it connected OG Prediction Markets into the FanDuel Predicts flow, so New Venture III was not strictly necessary to access contracts outside CME.

A logical next step if FanDuel chooses to use the new FCM would be to expand the number of exchanges that supply contracts to the platform. ProphetX is a natural candidate: it is a sports-native exchange that also offers non-sports markets, including political markets, and is regulated by the Commodity Futures Trading Commission (CFTC). ProphetX has sought to broaden distribution of its contracts to third parties and recently formed an alliance with Plaee to speed onboarding of new distribution partners.

## Strategic and economic implications

The main gain for FanDuel is control. Owning an FCM allows the company to manage relationships with venues directly and have greater freedom over intermediation between FanDuel Predicts customers and the exchanges that provide liquidity. Flutter said in its second-quarter report that FanDuel’s pricing and risk-management capabilities position it to “capture a large portion of the economics within the Prediction Market ecosystem.”

Yet the new FCM by itself does not change existing contractual terms: the revenue split with CME and clauses that prevent competing with the joint venture remain unknown until agreement details are disclosed.

## What operators and suppliers should watch

Operators and platforms should monitor whether FanDuel uses New Venture III to route more venues and what commercial terms it signs with those providers. The development will affect how other operators negotiate access to external liquidity and the technical architecture needed to integrate multiple exchanges.

For infrastructure providers, FanDuel’s direction reinforces demand for solutions that ease multi-exchange connectivity, risk management and rapid partner onboarding, areas where players such as ProphetX and Plaee already work.