The US sports betting market is facing renewed pressure as prediction market platforms continue to disrupt the landscape – as proposed tax increases on state operators threaten to do more harm than good.

On this episode of the Business of Betting Podcast, Joe Maloney, President and CEO of the Sports Betting Alliance (SBA), outlined how opinions on prediction markets amongst its five members is currently split.

FanDuel, Draft Kings and Fanatics all currently offer prediction market products.

Operators like BetMGM and bet365, do not.

The role of prediction markets

Despite this, Maloney stresses that this has not created internal tension at SBA, with the organisation rallying behind SBA’s three core objectives – expanding legal sports wagering, expanding iGaming and defending against market restrictions.

To Maloney, the rise of prediction markets provides them with helpful leverage against state legislators as stakeholders are forced to ask questions they previously avoided.

“I’m not chided anymore when I bring up a legal and unregulated market that competes with the legal and unregulated market,” Maloney stated. “I now have a whole new category of gaming I can point to.”

The rapid growth and high-profile advertising campaigns prediction market platforms are employing have given SBA a new and powerful argument in support of legalisation and regulation. 

“I watch the Daytona 500, and I see the winning car with a Chumba Casino logo on the hood. This is a company that has received a cease and desist order in nearly a quarter of American states” quipped Maloney.

When asked about the US’s two biggest untapped markets, Texas and California, Maloney was less optimistic.

Little progress has been made in either state, with Maloney acknowledging that the rise of prediction markets is likely to accelerate conversations on both sides. 

With iGaming currently only legal in eight US states, expansion remains a top priority for SBA.

Maloney mentions New York as his most closely watched state, as budget pressures are creating what he describes as a key precondition for progress.

He declined to place odds on a timeline.

Maloney continued, describing how gaps in understanding between legislators and the regulation industry are making national adoption difficult.

His solution, an increase in face-to-face engagement, clinical partnerships and a willingness to build credibility around marketing practices.