There’s no escaping the news about prediction markets. Over the last two years, their popularity has grown exponentially – and more traditional sportsbooks are now looking at new ways to tap into the prediction market opportunity.
But with that boom in popularity has come a tricky conversation around regulation, player protection and establishing the key differences between prediction markets and traditional gambling products.
Speaking ahead of his appearance at SBC Summit in Lisbon, High Roller CEO Seth Young takes a look at the factors that have shaped the rise of prediction markets in the last two years, and some of the lessons that politicians and regulators from outside the US can learn when it comes to these products.
You have witnessed many evolutions in the US gaming market. Compared to previous changes, how would you characterize the rise of prediction markets in the last two years?
It’s different in kind, not degree. This isn’t an evolution of gaming or gambling, because it isn’t a gambling product at all. It’s a financial product – and more than anything, I think we’re watching the evolution of finance itself.
I’ve been fortunate to be an early participant in many interesting opportunities over the course of my career, but I have never seen one with this combination of scale, timing, and structural tailwinds. It is – by far – the most interesting opportunity I’ve encountered in my 20+ years, full stop.
We’re talking about a product that isn’t tied to any one demographic or interest, one you don’t need to teach people to want. Prediction markets are intuitive to understand, and they’re for anyone who follows the world and forms an opinion about it. Which is to say, the addressable market is everyone.
I’d characterize the rise of prediction markets as wholly unsurprising when you consider the breadth of the business opportunity and the broad-based, mainstream appeal of the product itself. But the most exciting part is that we’re at the very beginning of it, and in front of multiple growth curves at once, each with a long way to run.
Having helped to launch PointsBet in the US online sports betting market and now preparing to launch a prediction markets product with High Roller, how would you compare or contrast the licensure processes?
With PointsBet, it was largely a state-by-state licensing process for online sports betting and online casino. And for High Roller, we’re talking about federal licensing for a non-gambling, financial product. They’re so fundamentally different it’s almost like comparing a trombone and a toaster.
With the state-by-state gambling model, you’re working through a patchwork of individual jurisdictions, each with its own regulator, its own requirements, its own timeline, and obviously that can become tedious and complex.
Federal licensing for a financial product is more streamlined in the sense that you’re operating under a single, unified structure rather than fifty of them, but streamlined doesn’t necessarily mean simple. There are different levels to it, across both the NFA and the CFTC, depending on the type of license your business is pursuing, and each carries its own complexities and requirements.
The two processes aren’t entirely unrelated in one respect: both require the discipline of operating in a highly regulated environment, and in both the bar to obtain licensure is high.
What lessons can politicians and regulators from outside the US learn from how the current situation in the US market is playing out?
Innovation tends to move faster than regulation, and that’s especially true in a genuinely new category. But the clearest lesson from the US experience is the value of deciding early, and correctly, what a product actually is.
A lot of the friction – for regulators, for operators, for the market itself – comes from trying to fit something new into a category it was never built for. When a market is understood for what it is, the path forward gets clearer for consumers and responsible operators alike, and it gives the credible operators the confidence to invest for the long term.
I also think it’s important for regulators and industry participants to maintain an open dialogue. The technology and business models will continue to evolve, so creating opportunities for collaboration can help ensure regulatory frameworks keep pace while still protecting consumers and supporting market integrity.
Every jurisdiction will ultimately take its own approach based on its own legal and regulatory structure, but the broader lesson is that thoughtful regulation and innovation aren’t in tension. The frameworks that endure are the ones that pair real clarity with real safeguards — and the jurisdictions that recognize that early are the ones that will earn the trust any new market needs to mature.
How does High Roller plan to stand out among the newest entrants to the US prediction markets space?
I’m not sure “standing out” is how we think about it. We’re far more focused on executing against our own strategy than on positioning ourselves against anyone else. Everyone starts somewhere, we’re clear-eyed about where we sit in the market today, and our energy goes into the things we know we can be excellent at rather than the scoreboard.
A few of those things give us real confidence. The first is focus, which I think is a genuine advantage here; we’re a pure-play prediction markets business in the US, and that’s all we are. We can move quickly, iterate on product, and potentially take more interesting swings on the product side that a more diversified company might not prioritize.
The second is that we’re a product-led organization at our core, and we look at our day one launch as the starting point, not the finish line. Building genuinely interesting products and user experiences is precisely where I expect us to compound an edge over time.
And the third is our profile as a publicly traded company. We’re effectively a pure-play in the public markets, and if we execute the way we intend to, that alignment between the business we’re building and the way the market can measure it is a powerful thing.
Seth Young, CEO High Roller, will be speaking at SBC Summit in Lisbon, on the panel session entitled ‘Prediction Markets: The Future’s Not Near, It’s Here’ which takes place on Wednesday September 30, 16:30-17:10 CET. Register for your tickets here.
