In one of the first session of the first day of SBC Summit Americas, the topic that’s dominated the gaming industry for the last year came up.
The issue of prediction markets was raised during the latter portion of the session “The Big Picture: Steering the Future of Gaming” Wednesday in Fort Lauderdale, Florida. As usual, people were either passionately pro or con about them.
“The reason prediction markets are doing so well is it’s very simple to play,” said Fanatics Gaming and Betting Chief Technology Officer Ian Botts. “It’s a binary yes or no. If you look at a sports betting event in a 100 different markets, it’s generally a complicated game to get into if if you’re not too familiar with it. I think the impact across the industry is going to be quite significant. You’ll start to see online casinos, sports books, start to adapt their products to be a bit more user intuitive, a bit simpler, bit cleaner.”
But Kevin Mullally, IAGR and the Mullally Group CEO and Managing Director, said it was befuddling to regulators that prediction markets have no embedded consumer protections.
“It’s unbelievable to me that you have people who take the very difficult action admitting, ‘I have a problem with this product. I’m going to take personal responsibility for it. Will you help me?” Mullally said. “Then their own federal government says, ‘Well, we know you’ve self-excluded, we know you’re trying to stop engaging in this activity, but we, the federal government, don’t care. We’re going to let these operators target you, market to you, entice you, and take as much of your money as they can with no regulations on an activity that has been regulated throughout the world.”
Optimove Director of Sales Tomer Imber said a year ago, sweepstakes gaming might have dominated panel discussions. But real-money gaming operators lagged behind and were reluctant to adopt prediction markets because of regulation issues.
“Some states have some nuances to them, but largely, it’s regulated by the CFTC,” Imber said. “That’s why we see operators like Fanatics go into that market. But the question is why a company like Kalshi gets better evaluation than even FanDuel and Draft Kings at some point? Kind of like the new startups are winning that industry and not the real-money gaming operators.”
Also discussed were the merits of regulation and whether it aids or harms operators. Soft2Bet Chief Commercial Officer Andrew Cochrane says his company doesn’t see regulation as an adversarial thing to overcome, but a positive way to advance a company.
Regulation, Cochrane noted, “flows through payments, flows thru localization, and actually you start to build your market strategy around compliance. I think those operators that do that from day one put themselves in a position of strength, because the reality is regulation is going to change, particularly in new markets like the U.S., as the market matures. Regulators are going to impose changes over time. We’ve seen it in virtually every regulated market globally, so we can expect changes, and those operators with a compliant mindset with a highly compliant platform that’s scalable actually put themselves in a very strong position ahead of the upcoming changes in the market.”
