Sportsbook leaders edge out prediction market champions, according to DraftKings CEO's assertion
In the bustling world of online gambling, two major players, Bet365 and DraftKings, are making their moves. While DraftKings is focusing on its sportsbook business, which is experiencing record activity as the NFL season kicks off, Bet365 has remained steadfast in its commitment to developing its core sports betting platform.
DraftKings CEO, Jason Robins, recently discussed the company's progress and stance on prediction markets. Robins finds prediction markets interesting but emphasizes that sportsbooks remain the top choice for most players. This preference for sportsbooks is evident among American bettors, who, when given a choice, opt for the wider and more complex options offered by these platforms.
Prediction markets, under the supervision of the Commodity Futures Trading Commission, are gaining attention in the gaming and financial industries. FanDuel has partnered with the Chicago Mercantile Exchange to offer event contracts, and Underdog has collaborated with Crypto.com to provide prediction products in states where betting is not yet legal.
However, DraftKings is not planning to jump into the prediction market just yet. The company is looking at options in-house and will make announcements when ready to take action. This hesitance can be attributed to the built-in challenges that exchanges face in managing risk, which make it hard for them to match the range of bets, parlays, and features that companies like DraftKings provide.
Sportsbooks can restrict professional bettors to control risk, enabling them to maintain a broad range of bets. This strategy has proven effective, as the NFL season is a crucial time for DraftKings to gain new customers and expand its business.
Robins used the UK as an example, showing that betting exchanges make up a small part of revenue compared to regular bookmakers. In places where both sports betting and prediction markets are allowed, traditional sportsbooks may not be outcompeted by prediction markets, as per Robins.
Regulators and tribal operators are cautious about prediction markets, as they could potentially weaken state control over gambling income and player safeguards. The American Gaming Association predicts that US sports betting will reach $30 billion this season, growing 8.5% from the previous year. Despite this growth, Bet365 has chosen to remain focused on its core business, leaving the prediction markets segment to others for now.
