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CME Group (NASDAQ: CME), the derivatives marketplace, and FanDuel, the online gaming company that is part of Flutter Entertainment (NYSE: FLUT, LSE: FLTR), have announced a partnership to create a platform for event-based contracts aimed at U.S. customers.
The alliance combines CME Group’s experience in regulated financial markets with FanDuel’s customer base. The companies said the products will be fully funded contracts with defined risk, allowing customers to take simple “yes” or “no” positions for as little as USD $100.
The new contracts are expected to launch later this year. They will be linked to benchmarks including the S&P 500 and Nasdaq-100 equity indexes, energy prices such as oil and gas, gold, cryptocurrencies, and economic indicators including GDP and CPI. Additional offerings are expected to follow.
“Individual investors are increasingly sophisticated and continually pursuing new financial opportunities,” said Terry Duffy, CME Group Chairman and Chief Executive Officer. “To meet this demand, we have created this innovative partnership, which will operate a non-clearing FCM. Together, our event-based products will appeal to the growing public interest in markets, and we will provide education to attract a new generation of potential traders not active in derivatives today.”
“Partnering with CME Group will unlock our ability to bring even more new and engaging products to FanDuel’s fast-growing customer base,” said Amy Howe, Chief Executive Officer of FanDuel Group. “We believe there is potentially a wide audience for trading event-based markets and we want to provide a platform that allows our customers to engage in this activity. We are excited to be partnering with CME Group to design new and engaging products, combining innovation with best-in-class regulatory compliance and consumer protections.”
As part of the agreement, CME Group and FanDuel will establish a joint venture that will operate as a non-clearing futures commission merchant. This entity will provide access to the contracts through FanDuel’s platform.
Pending review by the U.S. Commodity Futures Trading Commission, the contracts will be listed on CME Group exchanges and available through participating futures commission merchants.
