Gaming operators run the gamut on prediction markets during earnings calls
Prediction markets remain controversial and nowhere was this more evident than during first-quarter earnings calls. Gaming executives’ comment spanned the spectrum from opposition to fevered endorsement, with a measure of indifference in between.
BetMGM CEO Adam Greenblatt got the ball rolling on 14 April , when he took to the airwaves to slam event contracts, which he disdained as “new sports betting companies … they call themselves prediction markets.” He accused them of driving up customer-acquisition costs.
However, Greenblatt deemed the spending fever as unsustainable.
“The current climate of hyperspend” would, he said, pass eventually. He denounced the new rivals at length, saying BetMGM stood with 40 state attorneys general and was looking forward to US Supreme Court adjudication of what he considered a states-rights issue.
Greenblatt could even afford to laugh about the competitors, saying, “I don’t control what others choose to spend, underpinning bad investment. We’re controlling the controllable. We’re not assuming that irrational spending continues to become more rational. Long-term, the market is going to come back to us and that’s an exciting moment.”
Greenblatt forecast that prediction-market dynamics would end in “shark-on-shark violence. Most recreational players flow back in time.” Event contracts would be dominated by sharps, he forecast, while casual players would “lose too quickly.”
During its earnings call, Vici Properties professed to be unfazed by the event-contract phenomenon. “We acknowledge the growing but unregulated prediction markets, said Chief Operating Officer John Payne, but reaffirmed the company’s faith in brick-and-mortar gambling venues and their “sticky” customer base.
Rush Street Interactive CEO Richard Schwartz was downright dismissive of prediction markets in his talk with Wall Street stock analysts. Igaming-first was his mantra, saying he’d seen little cannibalization from event contracts. He concluded, “we’re searching for different players and searching for them in different places.”
Striking a similar note with analysts with Kambi CEO Werner Becher. Referencing Schwartz’s comments, he said, “I don’t see it as a big opportunity for us, to be honest. On the other hand, so far we have also seen serial impact on our existing business. It’s an interesting, new type of — I call it still sports betting. Because of this great expansion of the prediction-market guys, in expanding the acquisition costs eventually go up a little bit.”
Caesars Entertainment, in its earnings call, also noted a 1% drop in betting volume and an increase in customer-acquisition costs. Becher mentioned this before resuming. He said he was receiving cautionary notices from regulators and that “it’s no option at all to engage with these companies.”
In the next breath, however, he pivoted. “But it’s definitely a new channel, especially for a younger audience, to get closer to betting, to engage sports fans. So there is some risk on revenues definitely for some of our customers, but it’s also an opportunity to broaden the customer base.”
Caesars execs were more circumspect. Said CEO Tom Reeg, “recall that the bulk of our customer-acquisition costs comes from our Caesars Rewards database. That’s a particular advantage now. We’re not swimming in those same pools that prediction markets are making acquisitions.”
Reeg also observed that Caesars’ promotional intensity online had been one-third to one-half of its peer companies. “That tells me that we have lower acquisition cost and lower churn than our peers,” something he said had been of particular benefit of late.
If other companies were at most hedging their bets on event contracts, Sportradar CEO Carsten Koerl was running toward them with arms wide open. “Prediction markets expand the U.S. TAM by opening up new states, attracting new demographies and enhancing engagement with sports … For Sportradar, this opportunity diversifies our customer base and promotes a shift to live engagement, all of which should drive higher revenue over time,” he said.
Koerl said his company was in talks between prediction markets and a variety of United States sports, including Major League Baseball, the United Fighting Championships, the National Hockey League and Major League Soccer. He added, “while we expect to announce agreements soon, we are being deliberate in our discussions.”
He even teased “enhanced conversations” with the National Basketball Association. The focus of prediction markets, he said, was on what was about to happen immediately, whereas legacy sports betting was result-driven.
“We are working hands-on and very quickly on the best possible product to serve our partners on the prediction markets. Our partners, as you know, can only be online sports betting operators which are switching into this segment,” Koerl said.
The CEO was unconcerned about cannibalization. He said, “I’m glad there is a big population which can now get an opinion on a sports event and monetize this.” Echoing Becher, he said called it basically an extension of the existing market. Koerl also celebrated the fact that event contracts open the betting market to teenagers.
Concluded Koerl, “We see that this additional market access is by far outpacing whatever cannibalization effect is in there. We see it outpacing TAM, we see an expansion opportunity for us and this is something which excites us.”
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
Verticals:
Sectors:
Topics:
Dig Deeper
Related stories
The Backstory
Why prediction markets are suddenly center stage
Prediction markets have been swelling in visibility and trading volume, and the ripple effects are hitting the core economics of U.S. sports betting. The appeal is straightforward: lower fees, lighter oversight and access to customers in states that do not allow online sportsbooks. Jefferies analyst David Katz laid out the gap in regulatory treatment in an April 1 note, writing that event-contract operators benefit from an “enforcement-light” Commodity Futures Trading Commission while avoiding the heavy licensing, tax and responsible-gaming costs borne by sportsbooks. Katz warned that rapid growth under this lighter regime risks a backlash and potential adverse court rulings as soon as 2027. He also flagged that multiple state challenges are moving on different legal theories and a Supreme Court showdown appears likely. His analysis underscored why operators’ customer-acquisition math is shifting and why the political footing for prediction markets remains fragile. For a detailed look at those legal and tax asymmetries — and the scenarios that could reset the field — see the Jefferies rundown in Prediction markets run backlash risk, Jefferies analyst says.
Against that backdrop, executives are recalibrating. The core question is whether event contracts expand the total addressable market without eroding sportsbook revenue, or whether they inflate acquisition costs and draw scrutiny that could tighten rules across the board. That dilemma is now playing out on earnings calls and in statehouses.
BetMGM draws a hard line as costs rise
BetMGM has been the most vocal opponent among major brands, portraying prediction markets as a regulatory arbitrage that undermines consumer protections and state tax regimes. Chief Executive Adam Greenblatt used two recent calls to sharpen that stance. In an Oct. 14 discussion, Greenblatt said BetMGM would “swear off” engaging with event contracts, citing letters from state regulators that warned of potential license consequences if the company waded in. He framed the issue as a states’ rights matter that could land at the Supreme Court and argued that handle trends showed no discernible hit from the newcomers. The company’s rationale and capital posture during that period are detailed in BetMGM swears off prediction markets in earnings call.
By April 14, the rhetoric had sharpened. Greenblatt blamed “new sports betting companies … they call themselves prediction markets” for inflating player-acquisition costs and said BetMGM would lean into higher-value customers and pare marketing in sportsbook-only states. He predicted “shark-on-shark” dynamics would push casuals out of event contracts and back to sportsbooks over time. The full context of BetMGM’s first-quarter view — including how the company is positioning around 2026–27 catalysts and igaming expansion — is in BetMGM blasts prediction markets in earnings call.
BetMGM’s posture resonates with parts of Katz’s analysis, which emphasizes political risk from limited customer protections and potential cannibalization of taxed sportsbook revenue. It also highlights a tactical split in the industry: incumbents that see regulatory exposure and spiraling costs versus players viewing event contracts as an on-ramp to new demographics and states.
Flutter keeps its options open
FanDuel parent Flutter Entertainment has avoided absolutist positions, signaling it is tracking the opportunity but not rushing in. On March 4, executives told analysts prediction markets could be “interesting” but lack the product depth of a sportsbook. They stressed discipline around handle and margins and focused on long-term unit economics rather than promotional volume. That watch-and-wait posture, along with commentary on state tax pressure and international resilience, set a contrast with peers taking sharper stances. Read the exchange in Flutter executives spar with analysts during earnings call.
Flutter’s caution also aligns with the Jefferies framework that lays out divergent outcomes: a Supreme Court definition of what constitutes a swap and whether sports or political contracts belong under commodities law; congressional clarification that could wall off certain contracts entirely; or state-by-state compromises that impose taxation and responsible-gaming mandates on prediction operators. For large operators with scale and compliance infrastructure, any shift toward tighter rules could blunt newcomers’ cost advantage.
DraftKings tests the upside — and its ESPN megaphone
DraftKings is moving in the opposite direction, treating event contracts as both a hedge and a growth lever. Chief Executive Jason Robins told investors the company will focus DraftKings Predictions on states without legal online sportsbooks to unlock new customers and revenue. He said the company would lean on existing media assets and partnerships — notably a new designation as ESPN’s sole official sportsbook and odds provider effective Dec. 1 — to minimize incremental national marketing spend and outflank entrants that lack distribution. Details on the strategy, including projected revenue guidance and risk management after customer-friendly results, are in DraftKings earnings call focuses on prediction markets and how new partnership with ESPN can be leveraged.
DraftKings has also tried to preempt regulatory blowback by briefing legislators on its acquisition of a CFTC-licensed exchange and by signaling it will avoid sensitive jurisdictions. That mirrors Katz’s view that non-sports contracts may carry lower legal risk and that scale incumbents could benefit under virtually any outcome: If event contracts gain durable footing, big brands’ distribution wins; if courts or Congress curtail them, smaller rivals retreat.
What the next rulings could mean for price wars and profit pools
Katz’s note frames the core risk-reward tradeoff. Prediction markets currently avoid high state taxes — often 10% to 50% of operator revenue — and most responsible-gaming mandates. He estimates that if states regulate and tax them, the annual haul could reach $2 billion. He also flags active litigation paths from Nevada to Massachusetts and California, any of which could become the vehicle for a Supreme Court decision. Congress could resolve ambiguity by redefining swaps to exclude sports or politics. See the legal map and potential outcomes in Prediction markets run backlash risk, Jefferies analyst says.
In the meantime, market behavior is diverging. Some suppliers, like data firms courting live, moment-to-moment engagement, argue event contracts expand the pie by bringing in younger audiences and non-bettors. Others, including retail-focused landlords and omnichannel casino operators, emphasize the stickiness of brick-and-mortar and loyalty programs as buffers against churn. The immediate pressure point is acquisition cost. BetMGM says it is “better-insulated” and will concentrate spend where it has an omnichannel edge. Flutter is pacing itself, and DraftKings is testing demand where sportsbooks do not operate, banking that ESPN reach and product integration will lower paybacks.
The stakes are straightforward: If event contracts remain lightly regulated and continue growing, operators that participate could add customers at lower marginal cost and monetize real-time engagement in new ways. If regulators or courts clamp down, the costs of compliance and taxation could erase today’s edge, reset the acquisition arms race and push the advantage back to scaled sportsbooks. Either path will shape how aggressively companies price promotions, what products they prioritize and where they deploy capital over the next 12 to 24 months — well before any final word from the Supreme Court.
