Here’s How Prediction Markets Are Pinching Sportsbooks

In the states where online sports wagering is legal, prediction markets aren’t yet pilfering significant market share, but they’re thorns in the sides of their sportsbook rivals in another way.

Citing various affiliate and marketing sources, Eilers & Krejcik Gaming (EKG) analyst Brad Allen says in a new report that prediction markets are spending big this football season. So big that the figures can be described as eye-popping.

Prior to and since the start of the 2026 football season, there’s been a spate of fresh prediction market advertising, some of it controversial. The ubiquity of the ads is undeniable and there’s increasing belief in the gaming industry that sportsbook operators are in a tough spot.

Prediction Markets Trying to Up Their Promo Games

Bonus and promotional spending has long been the lifeblood of the online sports betting industry’s cost- per-acquisition (CPA) model. It was previously seen as unapproachable for prediction markets because as peer-to-peer exchanges, the economics weren’t there to lavish big rewards on attracting and retaining customers.

Prediction markets appear to be finding fixes because as Allen notes, CPA spending is approaching $200 for a prediction market trader — not far off the $250 spent by sportsbooks. The analyst says that’s causing a “headache” for sportsbook operators.

“Prediction markets are flush with cash and looking for growth-over-everything, online sportsbooks need to show strong results to reassure investors about their core business,” says the analyst.

Indeed, all-or-nothing exchanges are raising capital at an impressive pace and it appears they’re using portions of that financing to better compete with sportsbooks on the promotional spending front.

Sportsbooks Between a Rock and a Hard Place

To the chagrin of investors, DraftKings (NASDAQ: DKNG) and FanDuel owner Flutter Entertainment (NYSE: FLUT) are in the midst of significant spending plans aimed at bolstering sports betting market share and some of those expenditures involve those operators’ prediction markets.

Specific to DraftKings, executives of that company recently said they’re willing to spend meaningfully to acquire prediction market customers and that related spending could span two years. Fanatics CEO Michael Rubin recently said his company could spend as much as $1 billion in 2027 on sports betting advertising.

Expanded sportsbook spending may be a sign that operators have no choice but to keep pace with prediction market rivals.

“They (sportsbooks) can either pay more for customers and endure longer paybacks or hold the line and acquire fewer customers,” concludes Allen.