The online gambling landscape is shifting fast as prediction markets expand, U.S. states adjust policy, and regulators in major markets step up enforcement — forcing operators to rethink product mixes and compliance strategies heading into 2026.
New product front: prediction markets move into non-betting states
In a high-profile push this month, FanDuel partnered with CME Group to roll out a prediction-markets product called FanDuel Predicts in five states starting December 22, 2025, a move that follows DraftKings’ own prediction-market launches earlier in December. The new offerings let consumers trade event contracts tied to sports outcomes, economic indicators and commodities — structures that companies and exchanges argue are regulated as financial instruments rather than traditional wagers. Industry analysts say the strategy gives major operators a way to reach customers in states where sports betting remains illegal while staying within different regulatory frameworks. Reuters reported the FanDuel-CME launch and noted plans to expand nationally by early 2026. Read the Reuters report.
Regulation and enforcement tighten across jurisdictions
Regulators on both sides of the Atlantic are intensifying scrutiny. In the U.K., enforcement activity has targeted hundreds of illegal operators and thousands of offending web links this year amid new restrictions on online slot stakes and marketing rules. In the U.S., state-level action has produced a patchwork of outcomes: New Jersey implemented higher iGaming tax rates and restrictions on sweepstakes-style operators in mid-2025, while other states — including New York and Massachusetts — have continued to debate whether to move from sports betting to full online casino frameworks. The disparate regulatory posture is pressuring operators to compartmentalize risk, increase spend on compliance and lobby for clearer guidance on emerging formats such as event contracts and micro-betting.
Market dynamics – consolidation, taxes and product shifts
Consolidation and product diversification are accelerating as margins tighten. Larger operators are pivoting toward prediction markets, white-label partnerships and B2B exchange models to offset rising tax burdens — New Jersey raised online-casino and sports-betting tax rates in 2025 — and escalating compliance costs. At the same time, incumbents are experimenting with non-traditional bets and financialized offerings to capture customers in restricted states without running afoul of brick-and-mortar exclusivity rules. Investment activity continues but with more due diligence focused on license portability and regulatory risk.
Why this matters
The confluence of new product types, state-by-state legal uncertainty and active enforcement reshapes where and how players can operate. For consumers, the most immediate changes are new ways to bet — and new restrictions on previously available sweepstakes-style platforms in certain states. For operators and investors, regulatory clarity (or the lack of it) will determine where capital flows in 2026.
What to watch next
Expansion timelines for FanDuel Predicts and DraftKings’ prediction platforms as they target additional states in early 2026.
Any federal action or proposals addressing prop betting and novel contract formats following congressional attention to integrity issues in 2025.
State legislative sessions in Massachusetts, New York and other high-population states that could reopen the online-casino debate in 2026.