When FIFA named then-nascent ADI Predictstreet as the official prediction markets platform for the World Cup early in April, many wondered what that would mean in the U.S., where the federal government’s regulation of event contracts would preclude the Abu Dhabi company from securing a license in time for the tournament.
We learned the answer this week when Fanatics revealed that it had secured pass-through rights that will allow it to offer the only official World Cup event contracts, co-branded with Predictstreet on its Fanatics Markets app and site. Brokered by Fanatics, the contracts will trade on an exchange operated by Crypto.com, regulated by the Commodity Futures Trading Commission.
While Kalshi, Polymarket, PrizePicks, DraftKings and many others will have World Cup prediction products — functioning as a workaround in states in which online sports betting remains illegal, such as California and Texas — only Fanatics will be able to use official FIFA marks and licensed content on its app and in advertising and promotions.
You can check out the hub and its early markets here.
Fanatics Betting and Gaming CEO Matt King said the two began discussing options shortly after Predictstreet announced its FIFA deal, which came about a week before it launched a crypto-based site that isn’t available in the host U.S. It was issued an exchange betting license by Gibraltar gambling regulators last month.
“For us the biggest thing was the fundamental question of, ‘Does working with Predictstreet allow us to deliver a better fan experience for soccer fans in the U.S. during the World Cup who want to trade prediction markets?’” King said. “Given the rights they have, the answer was absolutely yes. Once you answered that question the answer was pretty easy.”
The World Cup marks the first major event since prediction apps offered by DraftKings, FanDuel and Fanatics began expanding their sports menus, girding for a fight for customers in California, Texas, Florida, Georgia and other states that their sportsbooks had been boxed out of as attempts to legalize — or in the case of Florida, open to more than one operator — online sports betting have stalled.
DraftKings and FanDuel have both said they expect to spend $200 million to $300 million launching prediction markets, likely beginning during the World Cup and accelerating at the start of football season.
“What we’re going to witness this summer all the way through football season is an advertising avalanche like we have not seen in a very long time,” King said. “The benefit we have is we’re in this for the long game. You’re not going to see us trying to go toe-to-toe with people that are going to spend what we would think are uneconomic dollars on advertising.
“It will be a bit of chaos, I’m guessing, this summer and into the fall.”
Fanatics ramped up its TV ad spend last fall with a campaign featuring Livvy Dunne, which it followed with a splurge on a Kendall Jenner Super Bowl spot. But its TV frequency still paces well behind DraftKings and FanDuel. Instead, it focuses on integration with the broader Fanatics ecosystem, with a focus on FanCash, a loyalty program that allows bettors and buyers to earn reward money with each bet or purchase. FanCash earned from placing bets can be spent on merchandise, and vice versa.
“We’ve found FanCash to be a huge reason why people are switching to using the sportsbook,” King said. “And the ability to bring that to prediction markets [has us] super excited because we think the same will hold true there. There are no loyalty programs in prediction markets. And so, we think we can offer something that we know is really compelling to sports fans.”
The strategy appears to be working. Our tracking in 15 states that report handle by individual sportsbooks showed Fanatics pulling ahead of BetMGM and into a podium spot at the start of last football season. A rebound put BetMGM back ahead in January, but Fanatics held a 10% share to BetMGM’s 8% in March.
Now comes the battle to accumulate share among the 45% to 50% (depending on how you count Florida, which has legalized but still will be a prediction market hotbed) of U.S. adults who can’t bet legally from their homes.
Sportsbook and prediction market operators are optimistic that the World Cup will drive volume during what is typically their slow season. Soccer represented about 5% of U.S. handle in the last two years, peaking at 8% to 9% in the summer months, when basketball drops off. Not surprisingly, Fanatics reports that only 4.7% of its soccer handle comes from MLS.
To grow that handle appreciably, and attract signups for predictions accounts, operators will have to engage the vast swath of bettors who rarely bet on the sport.
“If you watch soccer and have any inclination to bet, you’re probably already betting [on it],” King said. “But, similar to March Madness, you definitely get people who are bettors that don’t normally follow college basketball who will make a bet, because they are following March Madness. I think you’ll get that here.”
