Prediction Markets: Waiting Game for Gaming Giants

A Universal “Monitor Mode”

The overwhelming sentiment from executives was one of strategic patience. Rather than racing to launch their own prediction market offerings, companies are content to watch how the current landscape evolves.

“I wouldn’t expect us to be a first mover,” said PENN Entertainment CEO Jay Snowden. “We want to see how this plays out. There’s a lot going on right now in the courts, as well as with the regulators across the country.”

This view was echoed by DraftKings CEO Jason Robbins, who described his company’s stance as being “more in monitor mode.” He added, “A lot of what I think we need to see will come from watching how things unfold with others that are currently offering prediction markets.”

Perhaps most bluntly, BetMGM CEO Adam Greenblatt stated, “We do not have the desire to be a first mover.”

The Regulatory Minefield

The core reason for this industry-wide hesitation is the immense regulatory and legal uncertainty surrounding prediction markets.

The central question, whether these products are a form of financial trading or simply sports betting in disguise, remains unanswered and is being actively challenged by state authorities.

Greenblatt laid out the opposition in stark terms. “Our state regulators have been very clear. Our tribal partners have been very clear. 34 states’ Attorneys General have been very clear,” he said. “They do not believe prediction markets should…offer sports contracts because that is sports betting.”

This legal ambiguity has created a high-risk environment. Eric Hession, President of Caesars Sports and Online Gaming, noted that while his team is watching the situation to avoid being “caught flat-footed,” he has seen “a lot more people objecting to it, but really nothing’s moved through the court system at this point.”

Questioning the First-Mover Advantage

Beyond the regulatory fears, executives are also questioning the strategic value of being first to market. DraftKings’ Robbins suggested that the traditional benefits of being an early entrant may not apply here.

“I do think that being an early mover in a space like this can be important,” he said. “I also think that being a literal first mover may not be as important and there are downsides to that as well.”

BetMGM’s Greenblatt expanded on this idea, arguing that success in these markets is driven by liquidity, not timing. “The advantage is conferred by liquidity, not who gets there first,” he explained. He even suggested that financial tech companies like Robinhood or Coinbase, with their massive user bases and capital, might be better positioned to build the necessary liquidity pools than traditional sports betting operators.

“I don’t think we—BetMGM—has a right to win in…what is a very different market,” Greenblatt conceded.

The Experienced Watcher

If any company has a built-in advantage, it is FanDuel’s parent company, Flutter Entertainment. Flutter CEO Peter Jackson pointed to the company’s long history with its Betfair exchange as a key strategic asset.

“We have two decades experience of operating the world’s largest betting exchange…which shares similar characteristics with events contracts and this will help inform our views,” Jackson said.

Yet, even with this deep expertise, Flutter is exercising the same caution as its peers. “We’re closely monitoring regulatory developments and are assessing opportunities and potential participation strategies,” Jackson stated, declining to speculate on specifics.

For now, the industry’s approach is best summarized by a simple financial fact from DraftKings CFO Alan Ellingson: the company’s guidance for fiscal year 2025 “does not include the potential launch of a predictions market offering.”

Until the legal and regulatory dust settles, it appears prediction markets will remain a topic of intense discussion, but not of immediate action, for the gaming world’s biggest players.