The AGA Exodus Explained: Why the Biggest Sportsbooks Quit — And What It Means for Your Betting Apps

If you have DraftKings, FanDuel, or Fanatics Sportsbook on your phone, something significant just happened behind the scenes — and it could shape what features show up in your betting apps for years to come. Four of the biggest names in American sports betting have quietly walked away from the American Gaming Association, the industry’s most influential trade group, and the fallout is more interesting than it might seem from the outside.

What the AGA Actually Does — and Why It Matters

The American Gaming Association is the main lobbying organization for the regulated gaming industry in the United States. It represents casinos, sportsbooks, gaming manufacturers, and other stakeholders in Washington, D.C., and in state capitals across the country. For years, it was the unified voice pushing for legal sports betting, fighting offshore gambling sites, and working to build credibility for the industry. The AGA carries real weight, and its members have benefited from coordinated advocacy at the federal and state levels.

That unified front started cracking in late 2025 over a single issue: prediction markets.

Why DraftKings, FanDuel, Fanatics, and bet365 All Left

The exits happened in stages. On November 18, 2025, DraftKings and FanDuel announced simultaneously that they were relinquishing their AGA memberships, effective immediately. Both companies pointed directly to their expansion into prediction markets as the reason their direction no longer aligned with the trade group. Fanatics followed roughly three weeks later, citing the same disagreement after launching its own prediction market product on December 3, 2025. bet365 also departed, though the UK-based operator pointed to the AGA’s heavier focus on the retail casino industry — rather than purely the prediction markets dispute — as its reason for leaving.

The AGA’s position is straightforward: it believes prediction markets that offer sports-based contracts should be regulated as gambling products, subject to the same state-level licensing requirements that govern traditional sportsbooks. The organization has publicly opposed these products and, according to reporting from CNBC, even planned to introduce a resolution at a board meeting that would bar companies offering prediction markets from remaining members. For DraftKings and FanDuel, which had already announced their prediction market plans during Q3 2025 earnings calls, that position made continued membership untenable.

What Are These Prediction Market Products, Exactly?

If you have only ever used a standard sportsbook, prediction markets work a bit differently — though they will feel familiar quickly. Instead of betting against the house at fixed odds set by the operator, you are trading event contracts with other users on an open market. Think of it like a stock exchange for real-world outcomes. Each market poses a yes-or-no question tied to a specific event — will this team win tonight, will the Fed raise interest rates, will this player win MVP — and contracts are priced between one cent and 99 cents based on what the market collectively believes is likely. If your side resolves correctly, the contract pays out one dollar. If not, it settles at zero. You can also buy and sell your position before the event closes, which is similar to cashing out on a sportsbook, except you always have the option — not just when the operator decides to offer it.

The key regulatory difference is that prediction markets operate under the oversight of the U.S. Commodity Futures Trading Commission at the federal level, rather than under state gaming commissions. That means they can legally operate in states where traditional sports betting is not legal — including California, Texas, and Florida — which is exactly why the major operators see these products as a significant opportunity.

Here is what each operator has actually built. DraftKings Predictions launched on December 19, 2025, as a standalone mobile app and web product available across 38 states. It operates through DraftKings’ wholly-owned subsidiary, which is a CFTC-registered Introducing Broker, with trades executing through CME Group at launch. FanDuel Predicts launched three days later on December 22, 2025, as a joint venture between FanDuel Group and CME Group. It debuted in five states with a phased national rollout, and as of January 2026 offers sports contracts in 18 states — specifically those where FanDuel does not hold a traditional sports betting license — along with financial and economic markets available more broadly. Fanatics Markets went live on December 3, 2025, built in partnership with Crypto.com’s CFTC-registered derivatives exchange and launching in 24 states including California, Texas, and Florida, with a second phase covering crypto, stocks, pop culture, and other categories planned for early 2026.

The Sports Betting Alliance Steps In

With four major operators now outside the AGA, the lobbying landscape has shifted considerably. The Sports Betting Alliance — which already represented DraftKings, FanDuel, Fanatics, BetMGM, and bet365 — moved in December to expand its role and take on broader advocacy functions beyond state-level sports betting legalization. The group hired Joe Maloney, who had previously served as the AGA’s senior vice president of strategic communications, as its new president and CEO. That hire made the realignment explicit: the SBA is now positioned as the primary lobbying vehicle for the country’s largest online operators, while the AGA retains its traditional casino and land-based gaming membership.

The two organizations now sit on opposite sides of the federal debate over prediction markets. A Senate Commerce subcommittee hearing specifically addressing prediction markets and their intersection with sports wagering was scheduled for May 20, 2026, which signals that congressional scrutiny of this space is picking up. Per Sportico, the Coalition for Prediction Markets — a separate group that includes Coinbase, Robinhood, and Underdog — plans to spend millions in 2026 defending the CFTC-regulated framework for these products.

What This Means for You as a Bettor

The practical impact on everyday users comes down to access and product variety. If you live in a state where online sports betting is not legal, these prediction market apps represent a legitimate, federally regulated way to bet on sports outcomes for the first time. Both DraftKings Predictions and FanDuel Predicts are designed to feel familiar to existing sportsbook users — DraftKings even defaults to displaying contracts in moneyline-style odds rather than probability percentages, so the interface looks like what you already know.

For bettors in states with existing sportsbooks, these products add a new layer alongside your existing apps rather than replacing them. The peer-to-peer trading model means the odds are set by market participants rather than oddsmakers, which can produce different lines than what you see on a traditional book. The ability to exit positions at any time before settlement also gives you more flexibility than a standard bet. Whether that translates into better value will depend on market liquidity and how sharp the broader trading pool turns out to be.

The lobbying divide ultimately reflects a fight over who gets to define what sports betting looks like in America going forward. The operators that left the AGA are betting, quite literally, that prediction markets are the next wave. The AGA and its remaining members disagree. For bettors, the result is more options, more apps to consider, and a regulatory environment that is still very much being written.