The Chief Executive Officer of Genius Sports has made a bold statement, claiming that the demand for gambling and predictions platforms will not change – nor apparently impact each other.
In an announcement to investors, Mark Locke stated that while he is anticipating regulatory change especially for prediction markets, the demand created by the sector is “here to stay”.
This in turn means that the NYSE-listed, London headquartered sportstech will continue to benefit, according to Locke.
“Increases in wagering volumes support the demand for Genius products, irrespective of the form that wagering takes,” he wrote.
“Supplying rivals is how we have always worked: DraftKings and FanDuel compete for the same customer yet both buy from us. And I believe that the settlement standards regulators are now writing will raise the value of official data.”
The comments follow the company agreeing deals with both prediction market flagbearers, Kalshi and Polymarket, to bring official sports data, marketing, media and integrity services to the platforms.
On the back of those partnerships, Locke was majorly optimistic, declaring that the rise of the sector “is all very net positive for us”.
His outlook does not seem to have changed in the time since, despite the increased pressure that the industry is facing in the US.
He continued: “The prediction markets of today are very unlikely to look like the prediction markets of tomorrow: the rules on access, tax and product will move, and some of today’s advantages will move with them.
“What is almost certain is that the liquidity will be captured, taxed and regulated under some regime, federal, state or both. That journey has started: North Carolina already taxes exchanges’ net trading-fee revenue, Illinois has added a transaction levy, and the CFTC is writing its framework. It will take years.
“We are confident that Genius is well positioned to be paid at every point along it. Today we supply the exchanges, the market makers behind them and the sportsbooks competing with them for the same customer.
“At the endpoint we will supply whoever the rules leave in charge of the activity, and at every stage in between we will supply both sides. The route decides who pays us. The demand decides that we are paid.”
Genius has faith predictions are here to stay
The future of prediction markets hinges heavily on the outcome of a number of ongoing regulatory and legal developments taking place in Europe, North America and Latin America.
In the US, the defining decisions come in the legal battles between the Commodity Futures Trading Commission (CFTC) on one side and state regulators, and to an extent the regulated gambling industry, on the other.
In Europe, Gibraltar has become the first jurisdiction to launch a regulated regime solely for prediction markets products. Many national regulators remain hesitant, however, including France, Germany, Italy, Ukraine, Portugal and others.
Genius’ leadership is confident demand will remain for predictions no matter the regulatory trajectory, however.
“We believe the demand created by the rise of prediction markets is here to stay, but not necessarily today’s structure,” said Locke.
“Demand can endure while access narrows, activity falls or customers move between products. The distinction is between confidence in the underlying appetite for sports wagering and confidence in any particular platform’s current business model.”
Genius is not short on scars itself in recent times, having suffered a share price slump following its $1.2bn acquisition of Legend in February which has contributed to the company’s stock being almost 70% down since its 2021 IPO.
However, its CEO and Co-Founder still has faith in success 25 years on from its foundation, and there’s no denying that the company has a track record for generating revenue.
According to Locke, that is not going to change.
He concluded: “At the endpoint we will supply whoever the rules leave in charge of the activity, and at every stage in between we will supply both sides.
“The route decides who pays us. The demand decides that we are paid.
“Americans are going to keep wagering on sports, and Genius will be paid however they do it.”
