CME Group and FanDuel announced a partnership on August 20 to launch new, user-friendly event-based contracts. These contracts will grant millions of FanDuel US customers increased access to financial markets with simple 'yes' or 'no' positions on markets like equities, commodities, and economic indicators. This initiative marks a significant expansion into the retail betting market for financial events.
As part of the partnership, CME and FanDuel will form a new joint venture and operate as a non-clearing futures commission merchant. This structure combines CME Group's experience in regulated and transparent trading with FanDuel's broad user base. Lynne Fitzpatrick, CME Group President and CFO, stated that the partnership is about distribution to customers, with FanDuel seeking additional access to financial market products.
The event-based contracts are expected to launch later this year and will be tied to benchmarks such as the S&P 500 and Nasdaq-100, the prices of oil and gas, gold, cryptocurrencies, and key economic indicators like GDP and CPI. Interest in prediction markets is growing, driven by unregulated platforms' volume and signs of a more relaxed regulatory environment. This collaboration could open new revenue streams and attract a new demographic of market participants.
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