FanDuel wins standalone FCM registration with New Venture III LLC

FanDuel secured registration for a new futures commission merchant (FCM) when New Venture III LLC was approved as an NFA member on Oct. 5, 2026. The filing was first lodged six months earlier and lists FanDuel Group as a principal of the new entity. The approval arrives after FanDuel moved sports and other non-financial event contracts away from CME Group over the summer.

What the New Venture III approval means for FanDuel standalone FCM plans

New Venture III does not make FanDuel an exchange nor does it let the company list contracts directly, but it does provide an FCM wholly controlled by FanDuel at a moment the operator is seeking more flexibility over the exchanges and contracts available to its prediction-market platform. FanDuel currently operates FanDuel Predicts through FanDuel Prediction Markets LLC, an FCM formed via its joint venture with CME Group. That joint venture structure remains in place, and the new registration sits outside it.

The distinction is control and optionality. FanDuel Prediction Markets Holdings LLC is 51% owned by CME Group and 49% by FanDuel, and Flutter Entertainment disclosed that CME receives approximately 50% of gross revenue generated by FanDuel Predicts before promotional spending while FanDuel bears the app's operating costs, including sales, marketing and promotions. New Venture III gives FanDuel an alternative intermediary layer it controls, which could be used to route Predicts customers in future or to manage different exchange relationships.

Why FanDuel moved sports contracts and how CME responded

FanDuel moved its sports and other non-financial event contracts to Crypto.com’s OG Prediction Markets in August 2026, while CME continued supplying financial markets. Flutter Entertainment said the change was made “in coordination with CME” and framed it as a way to bring new products to market more quickly.

CME Group executives publicly responded to the prospect of a FanDuel-owned FCM earlier in the year. On CME’s April earnings call, President and CFO Lynne Fitzpatrick noted the difference between filing an application and launching an FCM and said the application did not by itself signal a change to the partnership. CME Chairman and CEO Terry Duffy was more pointed; he said FanDuel could not simply obtain or buy an FCM and use it to compete with the joint venture, describing that as contractually restricted. By July Duffy had reiterated that CME’s original objective in the partnership had been focused on markets and distribution rather than sports, and he said the company would "try to keep the sports out of it," describing many sports event contracts as gambling rather than the markets he wanted CME to supply.

"They can’t just get an FCM license, apply for one or buy one and compete with the JV that we put together with them," Terry Duffy said earlier in 2026.

How the mechanics affect FanDuel's economics and product roadmap

The public disclosures do not reveal the full contractual terms that govern revenue allocation or the treatment of contracts routed through a separate FanDuel-owned FCM. Flutter’s filings and earnings commentary, however, establish two concrete points: CME takes roughly 50% of gross revenue from FanDuel Predicts before promotions, and FanDuel bears all non-exchange operating costs. Those mechanics mean a FanDuel-owned FCM could change the distribution of revenues only if existing JV agreements permit it.

Peter Jackson, then CEO of Flutter Entertainment, previewed the strategy on the May earnings call when asked about the FCM application. Jackson said FanDuel wanted the ability to "adapt and do what we need to do in order to win" and that the application would provide the company with "further optionality." That optionality could be commercial — retaining a greater share of economics — or operational, by accelerating integrations with other venues.

FanDuel has already demonstrated ability to connect to an additional exchange from within its existing FCM when it integrated OG Prediction Markets via its current arrangements, which shows New Venture III is not strictly necessary to access alternative contract suppliers. The new FCM instead creates a corporate vehicle FanDuel owns outright through which it could manage such integrations and intermediary relationships.

Potential next steps: more exchange partners and distribution models

If FanDuel elects to use New Venture III to route Predicts customers, the logical consequence would be expanding the number of exchanges supplying contracts to the platform. ProphetX has been signalled in market commentary as a fit: it is a sports-native exchange that also lists some non-sports markets, and it has been pushing third-party distribution of its contracts to outside operators. ProphetX has also partnered with onboarding specialist Plaee to speed distribution partner integrations.

Owning the FCM layer aligns with Flutter’s stated aim for FanDuel Predicts. In its second-quarter earnings in August 2026, Flutter said FanDuel’s pricing and risk-management capabilities position it to "capture a large portion of the economics within the Prediction Market ecosystem." A FanDuel-owned FCM would be one way to pursue that capture, subject to the contractual restrictions still governing its joint venture with CME.

Regulatory and market context for prediction markets and the FCM route

The National Futures Association (NFA) is the self-regulatory organisation that records FCM registrations; New Venture III was approved as an NFA member on Oct. 5, 2026. Where exchange relationships sit and which venues supply particular contract types matters to whether activity is characterised as financial markets or gambling — a distinction CME’s leadership highlighted when discussing sports contracts.

The Commodity Futures Trading Commission (CFTC) remains the federal regulator overseeing futures and related derivatives in the US; exchanges and FCMs operate under its regime and under NFA membership obligations. Any move by FanDuel to route Predicts customers through New Venture III will have to respect existing contracts with CME Group and the regulatory permissions and rules governing each exchange partner.

What operators and vendors should watch now

Operators and platform vendors should track three items: the full text of any changes to FanDuel’s contractual relationship with CME (which are not public); whether New Venture III is used in practice to route customer flows for FanDuel Predicts; and which additional exchanges FanDuel integrates. Those developments will determine whether the new FCM changes economics, accelerates product launches, or simply provides FanDuel a controlled vehicle for existing multi-venue linking.

For ecosystem suppliers, a FanDuel-owned FCM could create demand for connectivity, onboarding and risk-management services that integrate non-CME venues into large retail platforms. This would be particularly relevant for vendors that work with sports-native exchanges and third-party distribution specialists.