Share 
When it comes to betting on sports online, there’s no shortage of options. Traditional sportsbooks dominate in legal states, while prediction markets are gaining traction in places without regulated betting. But the big question is this: can predictions ever hold their own against the powerhouse that is sports betting?
DraftKings CEO Jason Robins doesn’t think so, at least not in states where both are available. His take highlights some of the key challenges prediction markets face, as well as the opportunities that might exist in their niche.
DraftKings Sees Predictions as a Niche Product
Jason Robins made his stance clear at the Bank of America Securities 2025 Gaming & Lodging Conference. He explained that sports predictions might attract players in states without legal sportsbooks, but once both options are on the table, predictions have a tough time competing. Robins said:
“I just think it’s virtually impossible under that type of regulatory framework to ever have something that could be as rich and varied as what you see in an online sportsbook.”
That’s a blunt but practical point. A sportsbook offers endless betting lines, parlays, live in-game options, and the ability to manage risk in ways prediction markets cannot. For bettors, variety and flexibility matter, which explains why sportsbooks consistently dominate where they’re legal.
Lessons from the United Kingdom
Robins pointed to the UK as a real-world example. Prediction exchanges exist there, but they make up just a small slice of the pie. According to him, only a single-digit percentage of total revenue comes from exchanges. The vast majority of bettors prefer sticking with sportsbooks.
That doesn’t mean prediction markets have no role to play. Instead, it suggests they’re more of a supplemental product—something to scratch a specific itch for certain bettors rather than a full replacement.
Why Predictions Can’t Match Sportsbooks
One of the biggest hurdles is risk management. Sportsbooks can limit sharp bettors, adjust lines, and protect themselves from being “picked off.” Prediction markets don’t have that luxury. Anyone can take liquidity, which makes it nearly impossible to offer the same variety of bets, especially parlays.
Robins explained that if DraftKings tried to offer its entire sportsbook catalog in a prediction-style exchange, it would get destroyed. That reality caps the growth potential of predictions in regulated states.
There’s also the matter of collateral. With parlays betting, for example, sportsbooks manage potential payouts internally. Exchanges, on the other hand, require collateral for every possible outcome, which slows down the ability to expand offerings.
DraftKings Isn’t Ignoring Predictions
Just because DraftKings hasn’t rolled out a big prediction product doesn’t mean it isn’t paying attention. Robins hinted that the company might consider acquiring an already-approved exchange. He said there’s no need to announce plans until they’re ready, which fits DraftKings’ usual strategy of preparing behind the scenes before making a move.
It’s an innovative approach. While others race to launch, DraftKings is clearly waiting to see how the market develops. If predictions find their footing in the US, it wouldn’t be surprising to see DraftKings jump in through acquisition rather than building from scratch.
Flutter and Underdog Test the Waters
DraftKings isn’t the only operator weighing its options. Flutter, the parent company of FanDuel, recently announced its intention to bring predictions into the fold, though details remain scarce. Meanwhile, Underdog is already live with sports predictions in 16 states, mainly targeting areas without legal sportsbooks.
This is the sweet spot for predictions: filling a gap. If you’re in a state with no legal sports betting, a prediction exchange offers a taste of the action. It may not have the bells and whistles of DraftKings or FanDuel, but it’s something, and that’s often enough to keep fans engaged.
Circa Sports Fires Back
Not everyone is thrilled about the rise of predictions. Circa Sports CEO Derek Stevens recently criticized the Commodity Futures Trading Commission (CFTC) for permitting prediction markets to expand into sports-style contracts.
His argument is simple: prediction markets don’t face the exact costs as regulated sportsbooks. They avoid paying federal excise taxes, state gaming taxes, league fees, official data fees, compliance costs, and problem gambling funding. From Stevens’ perspective, that creates an uneven playing field.
“Hard to believe all the legal entities that have a stake in the industry will lay down,” he said, questioning how regulators can justify letting prediction platforms bypass rules that sportsbooks must follow.
Kalshi and Polymarket Push Forward
Despite the criticism, prediction markets are charging ahead. Kalshi recently filed to offer parlay-style contracts tied to football outcomes, ranging from game lines to player stats. They even created a football-specific rulebook to govern participation, banning players, coaches, and anyone tied to the NFL or NCAA from trading.
Polymarket, meanwhile, just got the green light to re-enter the US after exiting in 2022. The CFTC granted a “no-action” position, allowing Polymarket’s designated contract market to operate legally. That move could shake things up as the company tries to reestablish itself.
Regulators Want More Oversight
Not all regulators are comfortable with this rapid growth. Departing CFTC commissioner Kristin Johnson warned that there aren’t enough guardrails in place for prediction markets. She called for clearer expectations, noting that some operators are already eyeing leveraged and margined products for retail customers—a risky move if left unchecked.
Her comments underline a broader issue: prediction markets blur the line between financial products and gambling.
Without consistent oversight, the potential for confusion or harm grows, especially as companies introduce more complex contracts.
The Road Ahead
Sports betting and predictions may share the same audience, but their paths look very different. Sportsbooks have the infrastructure, variety, and regulatory framework that keep them in the lead. Prediction markets, on the other hand, thrive in gray areas—states without legal betting or customers curious about new ways to play.
The most likely outcome? Coexistence. Sports betting will remain the dominant product wherever it’s legal, while predictions carve out a niche in underserved markets.
The bigger question is how regulators will treat them moving forward, especially with voices like Derek Stevens and Kristin Johnson pushing for more oversight.
