Prediction markets may still be tangled in lawsuits, regulatory uncertainty and political debate across the United States, but for the executives building the space, one thing already feels settled: the category is not going away.
That was the prevailing message during “The State of Prediction Markets in the U.S.,” a panel discussion held at SBC Summit Americas in Fort Lauderdale on June 10, where industry leaders from DraftKings, Sporttrade, Optimove and the legal sector debated the future of event-based trading, sports prediction products and the broader convergence between financial markets and gaming.
The panel featured Alex Kane, founder and CEO of Sporttrade; Jeanine Hightower-Sellitto, Senior Vice President and General Manager of DraftKings Predictions; Jeff Laniado, Optimove’s U.S. lead; and Ian McGinley, partner at Sidley Austin, who discussed the evolving legal framework surrounding prediction markets, the convergence between gaming and financial trading, and why many executives believe the category is only beginning to scale.
Much of the conversation revolved around the increasingly blurred line between traditional sports betting and prediction markets, particularly as operators such as DraftKings expand deeper into the category and companies like Kalshi and Polymarket continue to attract massive valuations and investor interest.
“There’s going to be three or four, maybe five, that are going to have a right to win,” Kane said of the long-term market outlook. “And it’s all going to be about quality and execution for brokers.”
Legal battles continue, but momentum grows
McGinley opened the discussion with an overview of the legal environment surrounding prediction markets, noting that several lawsuits involving state gaming regulators, tribal interests and private plaintiffs are currently moving through the courts.
At the center of many of those disputes is the question of whether sports event contracts qualify as swaps under federal commodities law and whether federal authority preempts state gaming enforcement.
“You have district courts that have issued decisions,” McGinley explained. “I think it’s fair to say they’ve gone both ways.”
He added that many observers expect the issue to eventually reach the U.S. Supreme Court as conflicting rulings continue to emerge from different federal circuits.
Still, despite the legal uncertainty, operators are already building aggressively around the category.
During the panel, DraftKings reiterated its belief that prediction markets represent a major long-term opportunity. Referencing comments previously made by DraftKings CEO Jason Robins, Hightower-Sellitto described prediction markets as “a strategic priority” for the company.
“This category is still in its first inning,” she said.
DraftKings pushes forward with its “super app”
According to Hightower-Sellitto, DraftKings believes it holds a significant advantage because of its existing sports infrastructure and customer base.
The company recently integrated prediction markets directly into its main sports app, creating what executives described as a “super app” experience that combines sportsbook and prediction products in one ecosystem.
“Being able to leverage our brand, being able to leverage all of our resources into a single experience for customers for the sports experience is really where we’re heading,” Hightower-Sellitto said.
She argued that prediction markets and sportsbooks are complementary products rather than direct replacements.
“Both coexist really well,” she said. “They are different businesses at their core.”
Hightower-Sellitto described sportsbooks as essentially “single-dealer markets,” while prediction markets function more like traditional exchange and brokerage systems where traders interact within a marketplace structure.
That distinction, panelists argued, could fundamentally reshape how consumers engage with gaming-style products in the future.
Sporttrade sees convergence between trading and betting
Few executives on the panel were as bullish about the broader convergence between financial trading and betting as Kane.
Sporttrade, which originally launched as a state-licensed sports betting exchange, is now focused on becoming a federally regulated exchange through the CFTC framework.
Kane argued that prediction markets sit at the center of a much larger transformation involving trading, gaming and financial products.
“Customers are going to want to trade or play traditional gaming products like horse racing and online casino and DFS,” he said, “or whether they’re more interested in doing options and futures trading and equities.”
“The prediction market sits in the middle of that Venn diagram.”
Kane also pointed to the enormous investor enthusiasm surrounding the space. He referenced recent funding rounds involving Kalshi and Polymarket, noting that their valuations reflect ambitions extending far beyond sports contracts alone.
“I think those valuations are more an indication of just how interconnected trading and betting can ultimately be,” he said.
Regulation remains a major dividing line
One of the most recurring themes during the discussion was the difference between state gaming regulation and the principles-based framework used by the CFTC.
Kane criticized the highly detailed regulatory structures common in state sports betting markets, contrasting them with what he described as a more flexible federal approach centered on broader “core principles.”
“It’s not about what color font it is, size 14 and a half,” Kane said, describing his frustrations with state-level licensing processes. “It’s a completely different paradigm shift.”
McGinley agreed that the CFTC’s proposed framework appears focused primarily on preventing market manipulation and ensuring integrity rather than micromanaging operational details.
At the same time, several speakers acknowledged that prediction markets still face difficult questions around consumer protection, particularly because many platforms are available to users aged 18 and older rather than the 21-plus standard used in most U.S. sports betting markets.
Hightower-Sellitto said DraftKings has already implemented “responsible trading” protections modeled after responsible gaming programs commonly used in sportsbook operations.
“It’s something the CFTC is going to need to address,” she said.
CRM and customer retention evolve alongside the market
From the marketing side, Laniado explained that prediction markets are already changing how operators think about retention and customer value.
While many traditional sportsbook strategies focus heavily on deposits, net gaming revenue and casino cross-sell activity, prediction market operators are often optimizing for trading volume, liquidity and spread efficiency.
“The mechanics of the businesses inform what we’re trying to incentivize from a marketing perspective,” Laniado said.
Still, many familiar customer behavior patterns remain intact.
Operators acquiring large numbers of users during major sporting events such as the World Cup or Super Bowl now face the same challenge prediction market platforms encounter: how to keep those users engaged once the event is over.
“The players that are trading across products are of higher value,” Laniado noted.
The next phase of prediction markets
As the panel wrapped up, speakers were asked where they believe the industry will stand by 2027.
McGinley predicted that prediction markets would survive ongoing legal scrutiny, even if future CFTC rules narrow portions of the market.
Kane forecast consolidation, arguing that only a small handful of major operators will ultimately dominate the space.
Hightower-Sellitto took perhaps the broadest view of all, suggesting that prediction markets may eventually stop being viewed as controversial altogether.
“I think prediction markets just become part of the overall landscape,” she said. “They’re not controversial. People understand how they work.”
Laniado agreed that the category would likely continue expanding into increasingly sophisticated products and broader content verticals.
“In the next year, we’ll probably see even more productization and more breadth of markets that are available,” he said.