Sportradar pins hopes on prediction markets, analyst says
Prediction markets are performing up to expectations for Sportradar, J.P. Morgan analyst Samuel Nielsen wrote in a 29 September investor note.
Nielsen huddled at G2E in Las Vegas with three top Sportradar executives – Chief Financial Officer Craig Felenstein, Senior Vice President of Investor Relations Jim Bombassei and Senior Director of Investor Relations Ben Combes.
“Prediction markets trends are in-line (to slightly ahead) of expectations, supported by continued volume growth and ongoing product expansion,” Nielsen wrote. He added that no major deals needed to be cut in order for Sportradar to meet its targets for 2026.
However, Sportradar’s projections assumed that the NBA would approve prediction-market betting on its games and company executives expressed confidence in that outlook. They also perceived a robust advertising market, “particularly on the affiliate side, and expects that strength to persist near-term.”
Execs for Sportradar were bullish on their prospects with Kalshi, Polymarket and others. They saw opportunities for incremental tie-ins and long-running partnerships over the long term or sooner.
The Sportradar brain trust also felt that the economics of prediction markets were slightly better than those for online sports betting. Nielsen said they “emphasized that market-maker agreements are the primary lever to drive incremental economics upside vs a traditional OSB structure.” No regulatory downside was foreseen, also.
As for traditional OSB, Sportradar executives told Nielsen it was doing as well as they thought it would. They said they were “focusing on leaning into areas of strength.”
Soccer was a weak spot, thanks to low holds in August and mid-September. But trends in other areas of sport were viewed as ameliorating that softness.
Sportradar bosses projected potent margin growth in 2027, “as its cost initiative program is offsetting some of the investments in prediction markets, igaming (Playradar), and other growth verticals.”
As was the case with Flutter Entertainment, Sportradar was unruffled by Brazil’s 28 September ban on igaming and OSB. Potential effect was described as “minimal,” with Brazil accounting for less than half of the 10% of Sportradar revenue drawn from Latin and South America.
“IMG [Arena] synergies continue to pace ahead of expectations, and Sportradar is seeing strong monetization of IMG’s rights,” Nielsen reported of Sportradar’s major acquisition. He also found that artificial intelligence was being deployed across Sportradar, “supporting customer service, data collection, improving the depth and quality of its data, and contributing to cost efficiency.”
Nielsen concluded with the observation that Sportradar execs were enthusiastic about how their Playradar iGaming solution was ramping up. They pointed to “positive operator feedback and ongoing progress through the regulatory certification processes.”
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Prediction markets move from option to centerpiece
Sportradar’s latest pitch to investors rests on a shift that has been building for months: prediction markets are no longer being treated as a speculative side channel. They have become a test of whether the sports-data supplier can turn its league rights, trading tools and integrity products into a new revenue stream as growth in traditional U.S. online sports betting cools.
That context matters because the company’s confidence at G2E followed a year in which executives repeatedly framed event contracts as a way to expand the addressable market beyond states that have legalized online sports wagering. In prior earnings calls, Chief Executive Carsten Koerl said prediction markets were developing quickly in the U.S. and argued Sportradar was positioned to serve them because it already supplies official data, odds-related products, visualization and monitoring tools to bookmakers and leagues.
The strategy gained more definition after Sportradar struck a global agreement with Kalshi in June. The pact gave Kalshi access to data streams tied to Major League Baseball, the National Hockey League, Major League Soccer and the Ultimate Fighting Championship. The NBA was absent, a detail analysts treated as important because basketball remains one of the richest live-betting and player-prop categories. Sportradar executives have since treated NBA approval as a key assumption for the fuller rollout of prediction-market products.
Kalshi deal set the commercial template
The Kalshi agreement did more than validate Sportradar’s interest in event contracts. It showed how the company could monetize the category without rebuilding its cost base. Analysts focused on the sublicensing provision, which allows Sportradar to provide its data directly to Kalshi clients such as brokers, bookmakers and market makers. That clause hinted at a broader ecosystem opportunity: rather than relying only on an exchange, Sportradar could sell tools to multiple participants around the same trading activity.
Jefferies analyst David Katz said at the time that the initial impact was likely to be incremental in 2026, with more meaningful upside in 2027. J.P. Morgan analyst Samuel Nielsen estimated that if Sportradar captured even a modest share of Kalshi volume, the company could eventually generate tens of millions of dollars in revenue and potentially as much as US$100 million over the long term. Those projections help explain why management now describes market-maker agreements as especially attractive. The economics may be better than a traditional online sports betting structure if Sportradar can earn fixed fees for integrity and customer acquisition while tying data, odds and visualization revenue to trading volume.
The opportunity carries a regulatory shadow. Prediction markets operate under a different legal framework than state-regulated sportsbooks, and their sports products have drawn scrutiny because they can resemble wagering. Analysts have warned that micro-betting and other in-game contracts could blur that distinction further. Sportradar has generally avoided predicting legal outcomes, saying it operates where permitted and works with leagues to establish safeguards. That leaves the company dependent not only on client demand but also on the comfort level of leagues, regulators and courts.
Slow U.S. sportsbook growth raises the stakes
The push into prediction markets also reflects pressure in Sportradar’s core U.S. sportsbook business. In its second-quarter update, executives said the U.S. online sports betting market had slowed and that currency headwinds were weighing on reported results. Chief Financial Officer Craig Felenstein said the domestic market had “flatlined” in growth and that he did not expect a sharp rebound in the back half of the year.
That slowdown made the company’s event-contract plans more important to the investment case. In the same update, management said expected deals with prediction-market operators were materializing but taking longer than hoped, partly because league approvals were required. Sportradar had announced agreements with Kalshi and Polymarket covering various leagues, and Koerl said most activity was coming from large states such as Texas and California that do not have legalized online sports betting. That supported management’s argument that cannibalization of sportsbook clients would be limited because prediction markets were reaching different geographies and, in some cases, different age cohorts.
The second-quarter commentary also made clear why timing is sensitive. Sportradar adjusted guidance to reflect slower U.S. growth and foreign-exchange pressure, while saying prediction-market revenue was not fully embedded in full-year forecasts. If event contracts scale, they could offset sportsbook softness. If league approvals or litigation slow adoption, investors may have to rely longer on legacy betting content, advertising and international expansion.
Investor day laid groundwork for the 2027 case
Sportradar had already been selling Wall Street on a broader growth story before the prediction-market narrative accelerated. At its April 1 investor day, the company brought in high-profile sports and gaming figures, including DraftKings CEO Jason Robins, NBA Commissioner Adam Silver, NHL Commissioner Gary Bettman and Kaizen Gaming CEO George Daskalakis. Analysts, however, concentrated less on the guest list than on the financial plan.
According to coverage of the Sportradar investor day, management projected substantial revenue and cash-flow growth through 2027, driven by deeper customer relationships, more product bundling and pricing power around live betting. Analysts noted that clients using multiple Sportradar products generated far more revenue than single-product customers. That matters for prediction markets because the same bundling logic can apply: data feeds, odds services, visualization, integrity monitoring and marketing can be sold together to exchanges and market makers.
The investor day also highlighted artificial intelligence as a cost and product lever. Sportradar said it had automated data collection for more than half the games it covers, cutting costs materially compared with human collection. AI was also being used to improve coding efficiency and enrich products. Those tools support the company’s claim that it can enter new verticals, including prediction markets and iGaming, without a proportional increase in expenses.
IMG Arena acquisition expanded the rights base
The IMG Arena transaction is another thread behind Sportradar’s current confidence. Sportradar agreed to take on IMG Arena’s sports-rights portfolio, with Endeavor Group Holdings paying Sportradar US$125 million to assume the assets and reset certain league contracts. Analysts viewed the deal as an unusual chance to broaden data rights on favorable economic terms.
Management has since said IMG Arena synergies are running ahead of expectations and that monetization of those rights has been strong. Earlier, Sportradar said 75% of its clients were using IMG Arena intellectual property and pointed to relationships such as Hard Rock Bet as examples of the expanded content set. The company also projected that it would stream more than 700,000 matches in 2026, up from 525,000 in 2025.
For prediction markets, a larger rights portfolio is not just a volume story. Official data rights can be a gatekeeper for credible markets, especially if contracts expand into fast-settling, in-play products. The more sports Sportradar can cover with official, timely and trusted feeds, the more valuable it becomes to exchanges, brokers and market makers trying to create liquid products while satisfying league integrity demands.
Compliance concerns remain part of the backdrop
Sportradar’s growth narrative has had to compete with questions about compliance. In April, the company faced short-seller allegations that it had provided services to illegal or unlicensed gambling operators. During its first-quarter earnings call, Koerl rejected the allegations and said Sportradar supports only licensed businesses, using know-your-customer procedures and mitigation tools to address piracy and misuse.
The company also announced large share repurchases, with Koerl saying the market undervalued the business. Coverage of how Sportradar pushed back on the allegations underscored the stakes: the same integrity credentials that help Sportradar sell to leagues and regulated sportsbooks are central to its prediction-market ambitions. If the company is to become infrastructure for sports event contracts, trust from leagues, regulators and institutional clients is essential.
That is why the current article’s focus on G2E meetings is significant. Sportradar is trying to show that prediction markets can add revenue without requiring major new deals, excessive capital spending or a retreat from compliance standards. The upside case is a higher-margin extension of its existing data network. The risk is that growth depends on league approvals, legal clarity and public confidence in a market whose boundaries with sports betting remain contested.
