Managing Editor
On Tuesday, FanDuel and DraftKings abruptly terminated their membership in the American Gaming Association (AGA), citing differences in direction when it comes to prediction markets.
Companies like Kalshi and Polymarket have been seeking to disrupt the U.S. gambling industry by repackaging sports and political betting as a financial product. One thing they’ve apparently disrupted is the relationship between the top two U.S. sports betting operators and the main trade organization for regulated gambling in the country.
One of the AGA’s functions is to bring operators together to negotiate its Responsible Code of Conduct, which the members are then expected to follow. It also engages in campaigns against unregulated gambling, in which it includes “alternatively regulated” products like sweepstakes casinos (or “Social Plus games” as they now call themselves).
That is to say, the AGA and the retail casino operators that make up its original core membership are strongly opposed to products that feel like gambling but fall under different regulations, legally speaking.
That includes prediction markets, which is a problem for DraftKings and FanDuel, given that they’ve apparently chosen the mantra of “If you can’t beat ’em, join ’em.”
Although prediction markets are facing pushback in many states, they have the full-throated support of the President and his family, who have ties to every major operator in the space. A wind is certainly blowing, and DraftKings and FanDuel seem to have an opinion about its direction.
A Short-Lived and Uneasy Truce
It’s not entirely surprising to see these two online giants cut ties (at least partially) with the retail industry. It wasn’t that long ago, after all, that they were bitter enemies.
Both FanDuel and DraftKings began their lives as daily fantasy sports (DFS) brands. Although now regulated in many states, DFS was originally exactly the same sort of disruptive product as prediction markets. Its heyday was prior to 2018, during a time when the Professional and Amateur Sports Protection Act (PASPA) was still in effect and sports betting was illegal everywhere but Nevada.
The concept of DFS was to take the carveout PASPA had left for traditional season-long fantasy sports contests and use it to make something faster paced, that felt more like sports betting.
Naturally, that put DraftKings and FanDuel into conflict with retail gambling companies — particularly those with sportsbooks in Nevada — in the same way that sweepstakes casinos and prediction markets are today.
Following the legalization of online sports betting in many states, DraftKings and FanDuel pivoted to regulated operations. The rebels became part of the establishment, or tried to. However, some legacy operators like Rush Street Gaming still remained hostile to the new kids on the block, due to the advantages their DFS operations had given them — most importantly, customer databases in states that regulated casinos lacked access to until their sports betting markets opened.
Both DFS companies joined the AGA in 2021. However, they were considered “Diversified Gaming Suppliers” and not on par with the “Commercial Casino Operators” until 2023.
Given their background, DraftKings and FanDuel have remained more open than their legacy casino peers to gambling-adjacent products that skirt conventional licensing. That fact made it an eventual falling out with the legacy operators all but inevitable.
The AGA Isn’t Quite the United Front It Purports to Be
It’s not that rare for AGA members to leave the organization, but it is unusual for attention to be called to it or for a reason to be announced. Although it claims to represent “the full spectrum of the legal, regulated gaming industry,” its membership roster changes from year to year.
Generally speaking, it has been adding more members than it loses, but it isn’t a one-way street and there are some notable absences. Using Internet archives, PokerScout reviewed the changing membership of the AGA over the past five years.
Caesars Entertainment is the most notable non-member. PokerScout wasn’t able to determine exactly when it left, but it was advertising its membership as late as 2016 and was absent from the roster by 2020. Its departure was never announced or explained.
Boyd Gaming left the AGA more recently, sometime between February and April 2023, also without announcement or explanation. These departures are remarkable in that Boyd and Harrah’s (now a Caesars subsidiary) were founding members of the AGA, and both companies had executives on the AGA board within the decade before their exit.
Golden Gaming, which operates local casinos and taverns in Nevada, also left in 2021. There have been departures on the supplier side too, including Kambi and TransUnion.
