The last seven days have been busy for sports wagering as the industry saw a number of items that garnered significant attention. The prediction market space has certainly become the focal point in terms of strategy. As it relates to this, we witnessed an eye-raising announcement from one of the top operators in the U.S. regarding an alliance; meanwhile, there were positive and negative trends when examining the latest handle numbers; and two states made progress on their respective legislative timetables. We will give you a quick overview of all of these items below.

Story of the Week: Kalshi Deepens Sports Contract Offerings

Kalshi made significant progress toward expanding its offerings in sports event contract markets last week through the launch of NBA playoff series outcomes markets, as well as the introduction of individual game contracts for prime time games. With the inclusion of these additional contract types (NFL, NBA, MLB, and NHL) in the federally regulated marketplace, there are now more contract types available on Kalshi today than were available six months ago, and we have seen the overall liquidity continue to improve.

We have seen little public comment regarding the Kalshi expansion from traditional bookmakers. Privately, however, they appear to be concerned about what may happen. When asked by media covering the gaming industry to comment on the Kalshi expansion, DraftKings did not provide a direct quote. On an earnings call addressing their parent company Flutter, which owns FanDuel, the subject of competitive response to prediction markets was mentioned, but Flutter indicated no intention to make a specific strategic move relative to competition in this area. The fact that both operators chose to remain silent speaks volumes: neither appears to have found an easy way to address a competitor who does not require a license in each of the states where it offers services, nor does either embed a house margin into all lines.

Handle and Revenue: This Week’s Numbers

Operator Moves

Two of the operators to watch for updates are:

• Penn Entertainment (ESPN Bet): There have been reports Penn is looking at selling a portion of its ESPN Bet investment due to financial restructuring; the partnership was expected to grow users faster than it has and investors appear less patient. To date, there has been no confirmation of an official sales process but multiple sources indicated that the company is actively evaluating different options.
• Fanatics: Announced a strategic data partnership with a leading sports analytics company to enhance Fanatics’ in-game wagering product before the start of the NFL season. This move will help address one of the largest criticisms of Fanatics’ offering, specifically that Fanatics offers less competitive odds than other in-play platforms.

One to Watch

The Michigan Gaming Control Board is set to report its first monthly Responsible Gambling Data Release on Tuesday. This represents a complete reporting cycle that includes the implementation of new in-app prompt requirements for all operators to display Responsible Gambling Tools as defined by the operator when certain gaming session thresholds are met. In addition to providing the first quantifiable measurement of the effectiveness of these required prompts at increasing player engagement with Limit Setting Tools (or simply dismissing them), regulators from four other jurisdictions have indicated their intent to follow the metrics produced from this data prior to making decisions regarding implementing similar mandates.