DraftKings CEO: Sportsbooks Have the Upper Hand Over Prediction Markets

The NFL season’s start has led to DraftKings seeing record-breaking betting activity. CEO Jason Robins talked about the company’s progress and its stance on the growing trend of prediction markets. At the Bank of America Gaming and Lodging Conference last week, Robins said prediction markets might gain a foothold in states where sports betting is not legal. However, he thinks they will not be able to compete with traditional sportsbooks in places where both are allowed.

DraftKings CEO Points to Risk Limits as a Big Advantage Sportsbooks Have Over Betting Exchanges

Robins used the UK as an example, showing that betting exchanges make up a small part of revenue compared to regular bookmakers. He said that American bettors, when they have a choice, like the wider and more complex options that sportsbooks offer. In his view, exchanges face built-in challenges with managing risk, which make it hard to match the range of bets, parlays, and features that companies like DraftKings provide.

The CEO explained that sportsbooks can restrict professional bettors to control risk, which enables them to maintain a broad range of bets. On the other hand, exchanges must offer liquidity to any participant ready to take the opposite side of a deal. This, he pointed out, limits their capacity to provide the same breadth of betting options, reported Covers. When it comes to complex wagers like multi-leg parlays, this creates extra challenges, as exchanges would need to back every possible payout.

While recognizing that platforms like Kalshi and Polymarket are seeing big trading volumes, Kalshi reportedly handled over $26 million in trades during the NFL’s first game, Robins stated that DraftKings would not jump into this market. He mentioned that the company is looking at options in-house but will make announcements when it is completely ready to take action.

FanDuel and Underdog Explore Prediction Markets While DraftKings Stays Committed to Core Betting

Prediction markets, which run under the watchful eye of the Commodity Futures Trading Commission, are catching the eye of players in the gaming and financial worlds. FanDuel has joined forces with the Chicago Mercantile Exchange to offer event contracts, while Underdog has teamed up with Crypto.com to provide prediction products in states where betting is not legal yet. However, regulators and tribal operators remain cautious, pointing out that prediction markets could weaken state control over gambling income and safeguards for players.

DraftKings still puts its main effort into its sportsbook business, which is thriving as the NFL season kicks off. Robins told investors the company is experiencing record activity, calling this time one of the most crucial to gain new customers and expand. The American Gaming Association predicts US sports betting will reach $30 billion this season, growing 8.5% from the previous year.

While Robins found prediction markets “interesting,” he emphasized that sportsbooks remain the top choice for most players and offer a more viable model for operators. At present, DraftKings seems happy to observe as its competitors explore new territory.