The Bulletin Board
THE LEDE: Even if Kalshi wins in court, success is not guaranteed.
ROUNDUP: Fanatics gains access to MO; FAIR Bet Act and a must-pass bill; Sweeps enlists support of 3 CA Tribes.
NEWS: The PGA is backing efforts to legalize sports betting in Georgia.
NEWS: PrizePicks is now a 100% peer-to-peer DFS operator.
AROUND the WATERCOOLER: A positive bit of news for athletes.
STRAY THOUGHTS: Gouker’s signs of the apocalypse.
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The Lede: Are Prediction Markets Really the Future?
A recent Slate article makes the argument that the rise of prediction markets could be a sea change for gambling:
“Prediction markets like Polymarket—best known for bets on current events like elections, market trends, or celebrity news—haven’t been fully legalized the way sports-betting apps have, with the blessing of the nation’s highest court. But thanks to political connections and a regulatory system gutted and captured by private interests, they’ve been allowed to operate more freely than ever before. And they’re using that to expand their gambling ambitions into the sporting world, to the ire of Native American reservations that rely on sportsbook revenue, as well as the established companies (DraftKings, FanDuel, Caesars Sportsbook, etc.) still earning their operational licenses state by state.”
This is a valid perspective, but it’s not the only way (or even the most likely way, in my opinion) this story plays out.
There are numerous structural problems with the sports contracts at prediction markets, or as they have been known for over two decades, betting exchanges.
First and foremost, we don’t know how this will play out on the legal and regulatory fronts in the short- or long-term.
There’s no evidence that customers prefer the prediction market/betting exchange model.
Peer-to-peer gambling presents unique challenges, including compliance with CFTC regulations.
We don’t know what a competitive market will look like.
Contrary to popular belief, operating a gambling site is not a license to print money.
On Point #1, there are ongoing legal cases, a regulatory body (the Commodity Futures Trading Commission) in limbo, the overarching threat of a new administration installing CFTC commissioners with different perspectives, and the potential for congressional intervention. The NFL has explicitly clarified that prediction markets like Kalshi and Polymarket "mimic sports betting" and fall under prohibited conduct in its gambling policy, adding league-level scrutiny. States like Ohio have issued warnings to licensed sportsbooks, threatening to revoke their licenses if they partner with prediction platforms. Basically, the legal and regulatory environment remains highly uncertain.
On Point #2, evidence from mature markets such as the UK and Australia suggests that where betting exchanges and traditional sportsbooks coexist, the market is typically dominated by traditional sportsbooks. These products cater to various customer segments and meet different betting needs. As Regulus said in a recent note, the model hasn’t set the world on fire in other corners of the globe, despite having the same structural advantages: “We believe that the biggest danger for prediction markets is that they are structurally small and weak without professional layers to provide liquidity, especially delivering the longer-odds bets and parlays that mass market customers (and many whales) like.” Everyone thinks prediction markets will figure it out and offer these products, but broad adoption beyond niche users remains unproven.
On Point #3 (an extension of Point #2), in addition to the usual P2P issues (liquidity and skill gaps), platforms like Polymarket and Kalshi struggle to maintain active trading outside of tentpole events. Unlike traditional sportsbooks, which can guarantee liquidity through house backing, P2P systems rely on user participation (and market makers). And then, as the excellent Fifty Cent Dollars Substack noted, parlys are “trickier for CFTC-regulated prediction markets like Kalshi (for the moment). Every contract must be fully cash-backed the second it's traded - if you can win $100, someone's posting $100 in cold, hard collateral until settlement. No IOUs allowed.”
On Point #4, the competitive landscape is shrouded in uncertainty. We don’t know how many companies will get involved — if Kalshi wins in court and the CFTC maintains its current hands-off approach, you can expect dozens of companies to get involved (Polymarket's $112M acquisition of QCEX in 2025 to re-enter the US, FanDuel’s partnership with CME, and DraftKings, PrizePicks, and Underdog registering with the National Futures Association), and more competition means less meat on the bone, as I’ll discuss in Point #5 below. Another factor is that if prediction markets are authorized, it won’t be long before everyone and their cousin shows up with their hand out asking to wet their beak.
On Point #5, running a gambling operation — whether a casino, a traditional sportsbook, or a prediction market — is far from a guaranteed profit machine. Even when largely unregulated, many companies have failed, for a variety of reasons: Full Tilt Poker is the most famous, but the list of failed online poker sites and sportsbooks exiting the US market is lengthy. We don’t even know how the giants will eventually fare, as the major players in the US online sports betting market have yet to post a profitable quarter despite more than $500 billion in lifetime handle, as high customer acquisition costs and compliance burdens continue to weigh them down.
Bottom Line: Assumptions about rapid growth and product scalability remain optimistic at best. Established operators have shown that high customer acquisition costs, compliance burdens, and competition can quickly turn apparent opportunities into financial pitfalls. Expect regulatory hurdles and uncertainty, as well as liquidity issues to erode margins.
Roundup: Fanatics Access to MO; FAIR Bet Act and a Must-Pass Bill; Sweeps Enlists Support of 3 CA Tribes
Fanatics is the latest sportsbook to gain access to Missouri [Press Release]: “Fanatics Betting and Gaming announced that it is partnering with Boyd Gaming Corporation in the state of Missouri. Under the terms of their multi-year agreement, Fanatics Sportsbook will operate mobile sports betting under Boyd’s sports betting license in Missouri.” Fanatics is the latest operator to gain access to the market. Circa and DraftKings secured the two untethered licenses, while Fanatics, bet365, BetMGM, Caesars, ESPN Bet, FanDuel, and Underdog have inked market access agreements with a casino or sports franchise.
Titus will try to attach FAIR Bet Act to must-pass NDAA [InGame]: “Nevada Rep. Dina Titus will introduce the Fair Accounting for Income Realized from Betting Earnings Taxation Act (FAIR BET Act) as an amendment to the 2026 National Defense Authorization Act (NDAA), Titus announced on X Wednesday.” As InGame notes, the NDAA is a must-pass bill; therefore, anything attached to it will also pass. However, Titus is in the minority party, so attaching the amendment is the challenging part.
Sweepstakes supporters pick up more tribal support [Casino Reports]: “A third tribe in California has come out against a bill, AB 831, that would ban sweepstakes gaming operators in the state: The Sherwood Valley Band of Pomo Indians.” The tribe joins Big Lagoon Rancheria and the Kletsel Dehe Wintun Nation of the Cortina Rancheria Tribe, the latter of which also inked a deal with VGW. But as Victor Rocha noted on the Indian Gaming Association (IGA) New Normal webinar about dividing tribes: “What is it when you do the same thing and get the same result? Stupidity… This game plan is worn out. It just shows the lack of imagination.”
News: Georgia Committee Talks Gambling Expansions
The Georgia House Study Committee on Gaming has been holding hearings on gambling expansions. At the most recent one, the PGA joined the chorus of professional sports teams and leagues advocating for legal sports betting — something that has eluded Georgia for several legislative sessions.
As I noted last month (you can click the link to see who spoke in favor and against at the July hearing):
“The newly formed House Study Committee on Gaming, chaired by Rep. Marcus Wiedower, held its first meeting on July 28. The committee is tasked with exploring the potential for casino gambling, sports betting, and horse racing, with recommendations due by December 1. Last week’s hearing focused on commercial casinos.”
During the committee’s recent hearing, Scott Warfield, head of the PGA Tour’s gaming division, said, “This is a way to get the core fan engaged longer on our sport. They engage more with our content and follow the tournaments closely.”
As the local press has reported, there could be a significant push in 2026, as the state is considering eliminating the income tax, which would require tapping into new revenue streams.
As previously noted, unlike other states, Georgia’s reluctance to expand gambling isn’t due to stakeholder divides or union opposition; it’s more cultural:
“On the opposition side, the Committee heard mainly from conservative and religious groups — Georgia lacks legal commercial gaming, so unlike most other states that pit gambling interests vs. gambling interests, in Georgia, it’s businesses (sports franchises and venues) clashing against entrenched conservative opposition.”
News: PrizePicks Transitions to 100% Peer-to-Peer
As of August 22, 2025, PrizePicks is officially out of the against-the-house daily fantasy sports game.
Per SBC Americas:
“The country’s largest DFS operator has transitioned to only offering its peer-to-peer Arena product in all states and territories in which it operates, a company spokesperson confirmed to SBC Americas.”
Multiple observers have suggested that the move away from against-the-house makes a potential acquisition more appealing, as a shift to P2P alleviates regulatory uncertainty.
In a recent edition of the EKG Line, Eilers & Krejcik Gaming (a newsletter sponsor) wrote:
PrizePicks has pursued that PVP change more rigorously than rivals—potentially in a bid to make itself an attractive M&A target.
Online gambling operators look well-suited as buyers, particularly as listed firms look for new growth with new state launches slowing down.
And as Dustin Gouker wrote in his The Closing Line newsletter:
“The logical explanation for the move to P2P only would be to make the company more attractive (i.e., a lighter shade of gray) for a potential sale. It’s clear that the P2P version of fantasy pick’em is more accepted across the country.”
The second part of this story is PrizePicks’ potential foray into prediction markets, as reported last week:
“DraftKings, Underdog, and PrizePicks have registered with the NFA (the self-regulatory organization for the US derivatives industry), which ‘is an important preliminary step in ultimately obtaining the regulatory approval and licensure necessary to be regulated as a futures and derivatives market by the Commodity Futures Trading Commission (CFTC).’”
SPONSOR’S MESSAGE - Host Brad Allen is joined by Eilers analysts Chris Krafcik and Jimmy Neilly to discuss the firm's recent , including:
Why PrizePicks is a compelling acquisition target
A surprising contender for best DFS+ product
What OSB firms can learn from DFS+ apps
Around the Watercooler
Social media conversations, rumors, and gossip.
We are taking baby steps toward a brighter day.
From the press release:
“As college football season kicks off, Venmo is collaborating with the NCAA to help protect student-athletes from these unwanted interactions… So we’re strengthening the protections we have in place to make it easier for these users to maintain a positive experience.”
These protections include:
A Reporting Hotline: Venmo will offer a dedicated hotline for student-athletes and the NCAA to report potential cases of abuse for investigation and identify typologies of athlete harassment on Venmo.
Student-Athlete Resources: Venmo will provide a best practices guide for student-athletes to stay safe on Venmo with details on the reporting hotline. The guide will be distributed directly to student-athletes via NCAA channels, including newsletters, emails, and e-learning modules.
Athlete Account Support: Venmo will monitor student-athletes' accounts on an ongoing basis to help mitigate an influx of requests based on game performance and work directly with them to implement additional security measures as needed.
User Education: Venmo will educate users on the possible outcomes of harassing athletes through unwanted requests to athletes, including potential account closure.
Stray Thoughts
If today’s Watercooler is about brighter days, today’s Stray Thoughts section is a sign of the apocalypse — kudos to Dustin Gouker, who has apparently given up on sleep to cover the prediction market space:
