Genius Sports works with multiple sports leagues and several sportsbooks to provide official data, technology and integrity services. The company is open to doing similar deals with prediction market operators, as long as it can do so without incurring the wrath of gaming regulators.
Speaking on a quarterly earnings call on Tuesday, CEO Mark Locke stressed that his company is focused on remaining compliant with state laws and regulatory requirements. However, he acknowledged that if sports event contracts are seen as permissible, there’s a significant expansion opportunity.
Genius says Kalshi needs official data
“We place a great deal of importance on the views of our regulators and commercial partners,” he told investors and analysts. “As they evolve and mature, prediction markets may provide a meaningful new opportunity for Genius Sports in expanding the addressable market.
“While these products are nascent, they are evolving rapidly, and the need for Genius official league data, marks and logos, and integrity solutions will only grow as prediction markets become more sophisticated. This means that we are extremely well placed should we decide to engage.”
Genius Sports previously wrote to the Commodity Futures Trading Commission (CFTC) in May, calling sports event contract trading “an area of significant potential growth and innovation” and urging the federal body to lean on the company’s expertise to help better regulate the sector.
On Tuesday, Locke vowed to work closely with key stakeholders including its league partners such as the NFL, gaming regulators and existing customers, as well as prediction markets operators, to determine the next steps.
“We are confident in our ability to capitalize on this opportunity in a responsible and sustainable way if we feel all of the requirements we need to be in place to participate in this market are met,” he added.
A whole new world
Genius Sports has been the exclusive distributor of official NFL data to sports betting operators and media brands since 2021 through a multiyear deal extended this past June. It also has a deal with the NCAA. Its portfolio of operator partners includes several big-brand sportsbooks such as DraftKings, FanDuel, Caesars, bet365 and ESPN Bet.
Some of those partners, including FanDuel and DraftKings, have announced firm plans to begin offering event contracts. Most notably, FanDuel is working on a new platform with leading exchange CME Group and DraftKings recently acquired another licensed derivatives marketplace, Railbird.
Meanwhile, the legal and regulatory scrutiny continues, and platforms such as Kalshi continue to be embroiled in legal battles with state regulators. Kalshi has been scrutinized for using official NFL logos in the past and the NCAA wrote to the firm last week to opine that the platform is unjustly implying that it has some form of official partnership with the college sports governing body.
Last month Kalshi did sign a data partnership, but with the company STATSCORE, not the official data partners of the major leagues.
Genius Sports wary of licensed supplier standing
On the Nov. 4 call, Locke stressed that treading carefully is of paramount importance for a company like his, which has so many close ties to state-regulated sports betting. But, as the landscape continues to shift and more sportsbooks explore the opportunities ahead, he believes his company may need to be at the table.
“We’re watching it very closely, it’s a topic of frequent conversation not only externally but also internally. We feel very well placed, we feel like there could be a large opportunity, but we’ve got to watch the regulatory space and how that’s evolving over time.”
