As Polymarket looks to compete with online sportsbooks by offering sports prediction markets, the company’s CEO Shayne Coplan blasted state-licensed sports betting platforms as “a scam” and accused them of ripping off bettors.
Speaking to Axios business editor Dan Primack on Tuesday at the Axios BFD Summit in New York City, Coplan eagerly gave his thoughts on state-regulated sports betting and the model followed by market-leading operators like FanDuel, DraftKings, Fanatics and BetMGM.
“If you look at all four of those products, they’re all identical,” he said. “None of them innovate. They all rip off the consumer, respectfully. You can only trade against the house. They can ban you if you make money and they can profile you as a user and change the prices based on you. That’s a scam. In traditional finance, that’s like a bucket shop. It’s a scam. Those are illegal.”
Competing across borders
Coplan also criticized regulated sports betting as a duopoly shared by FanDuel and DraftKings and bemoaned the difficulty of establishing a competitor brand.
“There’s this patchwork state-based solution where every single state is like some sort of weird backdoor lobbying of the tribes get this and the tax is this rate, and everything is like this hodgepodge solution,” he added. “And as a result, it’s so goddamn complicated and expensive that no new entrants can enter the market.”
Polymarket is preparing to re-enter the U.S. market under Commodity Futures Trading Commission (CFTC) regulation. When it does, the company has promised to offer “legal sports betting in all 50 states.”
Daily fantasy sports operators Underdog and PrizePicks already offer sports prediction markets in several states that do not allow online sports betting. PrizePicks has launched Kalshi markets, although it also struck a partnership with Polymarket and wil soon offer Coplan’s company’s markets, including on sports in several states.
While Polymarket and PrizePicks will work together, Polymarket will soon compete with online sportsbooks not only in regulated sports betting states but also in the rest of the country, given recent developments. FanDuel and DraftKings are preparing to launch sports markets in non-sports betting states through a partnership with CME Group and an acquisition of Railbird, respectively.
Coplan expects Supreme Court will be needed
Polymarket’s CEO made those comments in response to a line of questioning from Primack that asked why Coplan’s company should be allowed to offer sports contracts in all U.S. jurisdictions when sportsbooks are limited to states that have legalized sports betting. “There’s an argument that you’ve just found a loophole,” Primack noted.
Coplan emphasized that Polymarket’s sports offerings will be “a financial market” that is approved federally. Like CME Group and Railbird, as well as fellow PrizePicks and NHL partner Kalshi and Underdog technology partner Crypto.com, Polymarket operates a federally regulated derivatives exchange and clearinghouse, allowing it to offer and process trading on its own platform.
“That’s what we’re going to market with,” he said. “That is the infrastructure, and we’re focused on being compliant within that framework.”
The dispute over prediction markets’ legality continues to be contested in several state courts. Coplan believes the issue will ultimately reach the Supreme Court.
