Prediction market products are not competitive with traditional sportsbook operators, Macquarie senior gaming, lodging & theatres analyst Chad Beynon said, so they shouldn’t have a significant financial impact on their earnings in 2025.
Prediction Markets Gain Ground but That Won’t Negatively Impact 2025 Earnings, Beynon Claims
Beynon stated that the threat appears genuine, especially in newly regulated states where Prediction players are securing a first-mover advantage. This could result in longer initial promotional periods for sportsbooks and a smaller total addressable market. However, he believes the current market sell-off is exaggerated.
Beynon’s analysis comes at a time when prediction markets are increasingly encroaching on the territory of more traditional sportsbook operators. In fact, Kalshi’s new same-game parlays from earlier this week shook the betting stocks of DraftKings and Flutter, which lost $7 billion. This proves Beynon’s claims that while prediction markets are not the end of sportsbooks, they should still be regarded with certain respect.
A Few States Drive Up Much of Prediction Markets’ Traffic
In his analysis, Beynon noted that much of the volume in prediction markets is coming from US states where sports betting remains illegal, such as California and Texas. As a result, Macquarie is keeping its online gross gaming revenue (GGR) forecasts for 2025 to 2027 largely unchanged.
In the short term, Macquarie projects Q3 online GGR growth of 21%, with online sports betting (OSB) up 13% and iGaming up 32%. That growth is expected to accelerate to 34% overall in Q4. On the land-based front, the analyst anticipates a 2% year-over-year increase in Las Vegas Strip GGR for Q3, driven by a soft baccarat comparison from the prior year. However, Macquarie also pointed out that revenue per available room on the Strip is currently trending down 9%.
As a result, Benyon expects third-quarter declines in the low to high single digits, varying by comparable performance, disruption, and market tier. For Las Vegas locals, he noted that weakness on the Strip could spill over with a delay, driven by a generally softer local economy. This has already led to increased promotional and marketing efforts in both the Strip and local markets.