Prediction Market Partnerships May Be Too Valuable For Leagues To Pass Up

While the NFL insists its attitude toward prediction markets hasn’t changed, the league does not let many opportunities to boost its business pass by.

Considering the trajectory they’re on, prediction markets present such an opportunity.

Before PASPA was overturned in 2018, the NFL, at least publicly, was staunchly opposed to sports betting. Once states were given the greenlight, the league realized how legal gambling could deepen its pockets, through enhanced fan engagement and sponsorship revenue.

There’s a parallel dynamic happening now.

Prediction markets have essentially increased the total addressable market for sports betting to all 50 states. With sports event contracts now available on financial trading apps like Robinhood and Crpyto.com, they’ve also turned on a new group of consumers.

“[Leagues] realized that they can make more money [by embracing prediction markets],” sports marketing veteran Stephen Master told Gambling Insider, “and everyone’s trying to make the owners more money, whatever the league is.”

“If it’s gonna happen anyway, you might as well monetize it.”

Despite the multitude of states and tribes trying to stop it, it is indeed happening.

Seeing Green

Prediction markets are attracting billions of dollars in investments, recently valuing Polymarket and Kalshi each in the eight figures. Just this week, Novig announced the close of a $75 million funding round that values the company at around $500 million, according to Sportico.

These types of dollars get a league’s attention. 

“They like huge numbers,” said Master, a formerly VP of business development at the NFL, said of major sports properties. “A lot of it will go towards product, but a lot of it’s gonna go towards marketing. So if they’re raising [billions], why wouldn’t you take some of that?”

To Master, who now consults with companies on sports betting strategies and teaches a sports betting class at New York University’s Stern School of Business, this is precisely what happened when leagues decided to partner with sportsbooks.

“They’re looking at like, ‘we might as well make them sponsors because we should making money from it,” he added.

NFL Clarifies Prediction Markets Stance

Comments by NFL executive VP Jeff Miller earlier this month were interpreted as an indication that the league is warming up to prediction markets. Miller spoke of the “fan engagement” benefits prediction markets offer.

An NFL spokesperson told Gambling Insider, however, there’s been no shift in policy since Commissioner Roger Goodell said in December, “That’s not something we’re about to enter into. We are going to see how things play out.” In written testimony for a Congressional hearing the same month, Miller expressed the league’s concern about the lack of regulatory oversight of prediction markets.

“We are in the exact same place [today],” the spokesperson said. 

During this year’s Super Bowl festivities in San Francisco, Miller stressed the NFL was the last league to get involved with sportsbooks.

In comments the NFL shared with Gambling Insider, not all of which appeared in the original report from Front Office Sports, Miller said, “We didn’t jump into it right away. We created a strategy to say what’s important to us here: Integrity of the game, integrity of the game, integrity of the game. And our partners demonstrate that with how it is that we work with them. 

“Same thing will have to happen if the Polymarkets and Kalshis of the world end up continuing in this trajectory to becoming a regulated business.”

Similarly, at NBA All-Star festivities last weekend, Commissioner Adam Silver said his league is “looking at prediction markets essentially in the same way that we’re looking at sports betting markets or sports betting companies.”

MLB Eyes Prediction Market Partnership 

The NFL may be hedging, but MLB appears ready to jump. The league, per an ESPN report, is considering partnering with prediction markets. 

MLB Commissioner Rob Manfred is also publicly leaning into the integrity of the game premise, rather than revenue or fan engagement, when discussing with owners potential partnerships, especially in light of the game-fixing controversy involving Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz.

“We thought it was important for the owners to be updated on why prediction markets are different than sports betting — why we might want to consider being in be business with prediction markets in an effort to protect our integrity, to get the kind of protections we need,” Manfred said of briefing the teams last week. 

Do Prediction Market Sponsorships Devalue Sportsbook’s League Ties?

While neither the NFL, NBA or MLB are there yet, several pro leagues have already partnered up with prediction markets. 

The NHL was the first one in, striking simultaneous licensing deals in October with both Polymarket and Kalshi. 

Polymarket also has partnerships with MLS and UFC.

These deals must rankle the properties’ sports betting partners, which already have to navigate a category that is often not exclusive. (UFC counts only DraftKings as an official sportsbook in North America, but the NHL and MLS have deals with multiple operators).

Partnerships with prediction markets chip away at the value of sports betting sponsorships.

“There’s a lot of confusion in the minds of consumers,” said Master, who ran the sports division at Nielsen for nine years. “At the end of the day, it’s about the consumers, and if they can’t understand the difference, and no one can articulate the difference, then I think it devalues the sports betting category a bit.”

Leagues, Master explained, are eager to split up a sponsorship category if it means increasing revenue.

“It’s kind of like if you’re in the car category. ‘Well, we’re the official domestic car exclusively.’ Then, we got the official imported car,” he said. “Well, they’re both cars. One just happens to be a GM and one is Toyota, [but leagues] make them two separate categories. It’s just another way to monetize a category.”