Key Moments:
- Genius Sports sees potential to support prediction market operators using its expertise in sports data and integrity services.
- The company’s CEO highlighted the importance of regulatory compliance and alignment with gaming laws during a recent earnings call.
- Several Genius Sports partners are preparing to launch event contracts as prediction markets continue to evolve.
Strategic Opportunity in Prediction Markets
Genius Sports has identified an opportunity for growth by applying its deep experience in delivering official sports data and integrity solutions to the developing prediction market sector. The company currently collaborates with numerous sports leagues and sportsbooks, supplying official data and a range of technology offerings. Any future partnership with prediction market operators, however, must adhere strictly to existing gaming regulations.
Emphasis on Regulatory Compliance and Partnerships
CEO Mark Locke stressed during the latest quarterly earnings call that compliance with state regulations and maintaining high standards remains central to any move into prediction markets. Locke indicated that the company’s involvement would depend on the regulatory acceptance of sports event contracts. If these are deemed permissible, new growth avenues could open for Genius Sports.
Locke underscored the role of regulators and commercial partners, stating: “As they evolve and mature, prediction markets may provide a meaningful new opportunity for Genius Sports in expanding the addressable market.”
He continued: “While these products are nascent, they are evolving rapidly, and the need for Genius official league data, marks and logos, and integrity solutions will only grow as prediction markets become more sophisticated. This means that we are extremely well placed should we decide to engage.”
Regulatory Engagement and Next Steps
Earlier in the year, Genius Sports reached out to the Commodity Futures Trading Commission (CFTC), describing sports event contract trading as “significant potential growth and innovation.” The company suggested that its knowledge could help improve sector oversight.
On Tuesday (Nov 4), Locke reinforced the company’s intent to work closely with league partners such as the NFL, regulators, current clients, and prediction market operators to determine their future approach. Locke stated: “We are confident in our ability to capitalize on this opportunity in a responsible and sustainable way if we feel all of the requirements we need to be in place to participate in this market are met.”
Industry Developments and Collaborations
Since 2021, Genius Sports has been the exclusive provider of official NFL data to betting operators and media groups, a partnership that has recently been extended. The company also partners with the NCAA and cooperates with major sportsbooks including ESPN Bet, Caesars, FanDuel, bet365, and DraftKings.
| Partner | Recent Prediction Market Activity |
|---|---|
| FanDuel | Collaborating with CME Group on a new prediction market platform |
| DraftKings | Acquired Railbird, a licensed derivatives marketplace |
Ongoing Legal and Regulatory Challenges
Legal hurdles remain for several prediction market operators. Kalshi, in particular, has encountered scrutiny regarding the use of official NFL logos, and the NCAA has formally raised concerns about implied partnerships. Despite ongoing legal disputes, Kalshi has entered into a data agreement with STATSCORE, although this does not involve the official data partners of major leagues. In the past month, Kalshi has also become the official prediction partner for the National Hockey League (NHL).
- Author
Daniel Williams
