FanDuel, DraftKings, Fanatics Nervously Await SCOTUS Ruling

The US Supreme Court is expected to decide the future of sports prediction markets, and several sports betting giants are nervous.

DraftKings, Fanatics, and FanDuel have been three of the most successful sportsbooks in the US over the last few years. However, the three operators decided to supplement that success by launching prediction market platforms. These include sports contracts, which they have been expanding across the US.

Unlike prediction-only platforms like Kalshi and Polymarket, the trio could stand to lose far more than their investment.

Operator Expansion Angers States

Shortly before the football season kicked off this fall, DraftKings announced it was expanding its sports markets into all states where its sportsbooks aren’t available. This includes non-betting markets like California and Texas, as well as single-operator markets like Florida. FanDuel and Fanatics announced similar expansion soon after.

This has generated anger in California, which aims to legalize online sports betting in 2028. If it does, it would automatically become one of the US's top two mobile markets. That means operators will push hard to secure licenses to operate there, but will likely need to go through the state or its gaming tribes. 

Given FanDuel and DraftKings' decisions to launch sports betting there, their reputation may not be enough to secure a license in such a large market. That could be a massive financial blow and let smaller operators close the gap in US market share. 

Fanatics May Be Positioned Best

The biggest difference between the country’s top two sportsbooks and Fanatics is that the former are publicly owned. They have shareholders, financial reports, and the constant pressure to deliver profits to investors. As a result, an unfavorable SCOTUS ruling on prediction markets could hurt DraftKings and FanDuel more.

Fanatics remains privately owned and operates in several different industries. Its most prominent business is apparel, which has secured exclusive licensing deals with several of the country’s top sports leagues. This success can offset losses from its sportsbooks or prediction platform, allowing it to move forward without the chaos of angry shareholders. 

While the operator would still likely lose significant revenue, it could weather the storm better than its two sports betting rivals.

Prediction Industry Continues to Grow

If SCOTUS decides sports markets qualify as commodity trading rather than gambling, that wouldn’t clear the three sportsbooks.

As successful as these operators have been with their sportsbooks, that success hasn’t translated to the prediction industry. Kalshi continues to dominate the US market, and new competitors keep popping up. This includes online sports platforms like Novig and international heavyweight Polymarket.

Because operators could also face state-level pushback, they could see a significant drop in sports-betting revenue that they can’t make up for with their prediction platforms.