Why $8.2B prediction markets’ major league sports backing is huge blow to legacy betting
The National Hockey League (NHL) has reached licensing agreements with prediction market platforms Kalshi and Polymarket, making it the primary major US skilled sports league to allow using its emblems by prediction markets, or “licensed betting markets.”
As The Wall Street Journal reported on Oct. 22, the multiyear offers grant each platforms rights to use the NHL brand, phrases comparable to “NHL” and “Stanley Cup,” and particular person crew names.
The mental property bundle is the identical that the league extends to sportsbook operators comparable to DraftKings, FanDuel, and BetMGM.
The agreements formalize the push of prediction markets into sports betting, an incursion that has drawn authorized challenges from state regulators and outcry from gambling-industry teams.
Kalshi and Polymarket supply occasion contracts on video games that operate equally to conventional sports bets, however function below the oversight of the Commodity Futures Trading Commission (CFTC) quite than state gaming commissions.
As a federally licensed change, Kalshi affords sports occasion contracts in all 50 states, together with jurisdictions that limit betting on customary sportsbooks. Meanwhile, Polymarket is within the late levels of a US comeback.
Keith Wachtel, president of NHL enterprise, said:
“Prediction markets are right here to keep. Partnering with Kalshi and Polymarket may broaden the league’s fan base to the tech-savvy customers of prediction markets, Wachtel added, whereas noting that sportsbooks stay “vital companions” of the NHL.”
Volume surge and market share
The partnership arrives as prediction markets file multibillion-dollar quarterly volumes. Kalshi and Polymarket are the biggest platforms, accounting for 46.6% and 52.1% of the market, respectively, as of final week.
According to a Dune dashboard by consumer dunedata, Kalshi’s quantity elevated from $1.9 billion within the second quarter to $4.5 billion within the third quarter. In comparability, Polymarket’s quantity rose from $3.2 billion to $3.7 billion throughout the identical interval.
Combined volumes for the earlier quarter quantity to $8.2 billion, representing a 61% enhance over the second quarter’s outcomes.
Kalshi has loved file volumes since Sept. 29, when it launched a product comparable to same-game parlays, and brokerage Robinhood Markets introduced surging volumes in sports contracts.
Since that date, DraftKings shares have dropped 27%, whereas shares of FanDuel dad or mum Flutter Entertainment have fallen 14%.
A parlay combines two or extra wagers, comparable to betting on outcomes of separate video games, right into a single guess.
Before the NHL deal, Kalshi averted utilizing trademarked phrases comparable to “NFL” or “Super Bowl” on its platform, as an alternative referring to “Pro soccer champion” and figuring out groups by their cities.
The NHL and different leagues have traditionally protected their mental property from unauthorized use.
The licensing agreements take away that constraint, permitting Kalshi and Polymarket to market sports contracts utilizing official league branding.
Meanwhile, established sportsbooks have tailored accordingly. DraftKings acquired Railbird Technologies, which owns a CFTC-licensed change, as a part of a technique to enter prediction markets.
In August, FanDuel partnered with the CME Group, an change operator, to develop a buying and selling platform comparable to Kalshi’s.
Polymarket acquired a $2 billion investment commitment from the dad or mum firm of the New York Stock Exchange earlier this month, supporting the startup’s plans to relaunch within the US within the coming months.
Polymarket stopped serving Americans in a 2022 settlement with the CFTC however acquired a small CFTC-regulated change in July.
The change, now often called Polymarket US, plans to record contracts on sports and elections, in accordance to regulatory filings.
The earlier quarter’s development and the latest partnership show that prediction rails have captured materials market share from conventional operators, with sports IP accelerating adoption amongst retail customers who beforehand accessed betting completely by extra established names.
The put up Why $8.2B prediction markets’ major league sports backing is huge blow to legacy betting appeared first on CryptoSlate.
