Analyst Says Betting Data Providers Will Benefit from Prediction Markets

Some people within the investment community believe that prediction markets are partly responsible for the recent weakness in shares of sports betting data providers. However, according to a report from Citizens Equity Research analyst Jordan Bender, data companies could ultimately benefit from the growth of prediction market platforms.

Bender Explains How Data Providers Would Benefit from Prediction Markets

Bender’s opinion comes after he met with executives from Genius Sports earlier last week. According to him, the company is positioning itself to potentially come out ahead regardless of how the prediction markets space evolves. He observes that the company is maintaining a constructive approach toward the growing influence of reposition markets and will benefit from that, regardless of how the industry develops in the future.

This aligns with the fact that Genius Sports has been continually allocating more resources towards prediction markets investments. For example, recently, the chief executive officer of Genius, Mark Locke, said that the advertising opportunity through prediction markets is significant and that the company will continue with its commitments to the scene.

Back to Bender, he says that prediction markets companies like DraftKings, FanDuel, and Fanatics will play a huge role in sports betting data providers’ future. He explained that these companies faced no pushback in launching their platforms and that stakeholders are shifting their tone as they recognize the industry is unlikely to disappear in the near term. 

Bender Talks About the NFL’s Recent Change of Opinion

While some smaller North American professional sports leagues have quickly embraced prediction markets, the NFL has taken a more cautious stance. However, Bender notes that the league’s rhetoric has recently shown signs of softening, as recently the NFL’s EVP Jeff Miller said he is now more open to the idea of prediction markets, despite being staunchly against them last year.

The analyst adds that if the NFL were to allow prediction market companies to use league intellectual property, Genius Sports could generate incremental revenue beyond its 2028 targets, despite currently assuming little to no prediction market revenue in its projections. At the same time, Bender notes that even if sports-related prediction markets were ultimately banned, the company’s financial outlook would still remain unchanged, and Genius would continue operating as usual.