When it comes to the battle of the prediction markets, which player are you betting on?
Fanatics, the global sports platform, is out to prove that sportsbooks will be the emerging industry’s biggest winners. Today, Fanatics is launching a stand-alone predictions market app designed to appeal to the fans who already buy its apparel and collectibles.
It’s the first of the major sportsbooks to move into prediction markets—and almost certainly won’t be the last.
“Prediction markets are one of the top things that fans want to do these days,” says Matt King, who leads betting and gaming for Fanatics. “People want to be able to express their opinions on not just sports, but entertainment, culture, and everything under the sun.”
King, the former CEO of FanDuel, oversaw Fanatics’ expansion into sports betting in 2023 with a sportsbook that now operates online in 22 states and Washington D.C. With prediction markets, King sees a way to give people “the ability to speculate on different asset classes, different trades, all in one place.” The demographic that is core to both Fanatics and prediction markets—men in their 20s and 30s, who likely watch sports and trade crypto—are seeking “the ability to profit if they’re right,” King says.
Fanatics Markets will be available to users aged 21 and up in 10 states this afternoon, and an additional 14 by the end of the week—all places where Fanatics’ Sportsbook & Casino is currently unavailable. The trading categories featured in the app include live games, major league matchups, economic indicators, and elections. (Later releases will include crypto, pop culture, movies, and more.)
Fanatics designed the app’s user experience, partnering with Crypto.com to operate the derivatives exchange that powers the underlying market and its pricing. The Android app will go live first, followed by iOS.
Prediction markets are an adaptation of traditional futures markets, which allow traders to buy and sell contracts associated with future events. Originally a hedging tool designed to protect farmers in the event of a poor harvest, the contracts have been repackaged as an internet-era way to bet on news.
Since winning greater regulatory clarity last year, prediction markets have been growing at a breakneck pace. Weekly trading volume now extends into the billions of dollars, with a significant portion of those dollars dedicated to sports. In late October, for example, industry pioneer Kalshi posted weekly notional trading volumes of more than $1 billion in sports, making the category its most popular by far.
Numbers like those have convinced sportsbooks to get off the sidelines.
“If you look at the inherent customer base, the experience that we have in this business, it’s super exciting for us,” Fanatics CEO Michael Rubin told CNBC last month. “Customers want this product, and we want to give it to the customers.”
GROWING COMPETITION
Meaningfully, prediction markets also give Fanatics an opportunity to try to leapfrog U.S. sports betting leaders FanDuel and DraftKings, which together control roughly 80% of the market. Fanatics’ sports betting operation generated $300 million in revenue in 2024; its market share, while growing, is in the single digits.
Structurally, prediction markets are vastly different to operate than sportsbooks, in which the operator serves as the “house.” But to fans, the underlying impulse is the same: putting money on a predicted outcome.
While Fanatics is making the first move, FanDuel has teamed up with CME Group and has a product in the works. DraftKings says it is “watching how things unfold,” according to CEO Jason Robins.
Stock and crypto trading platforms see prediction markets as an opportunity, too. Robinhood unveiled its prediction markets feature last fall, just in time for the presidential election. Leaked screenshots suggest that Coinbase, in pursuit of its goal of becoming an “everything exchange,” could unveil a prediction market offering, in partnership with Kalshi, later this month.
Meanwhile, Kalshi and Polymarket are attracting significant investor interest. In October, Polymarket raised up to $2 billion in strategic capital from ICE, parent company of the New York Stock Exchange, and Kalshi followed suit with a $1 billion round on Tuesday, led by Paradigm.
As Fanatics prepares to go head-to-head with existing exchanges, King says he sees Fanatics’ strong brand as an essential asset. “We think a combination of the brand, a good product experience, and our rewards proposition means that we’ll have a big chunk of customers that play with us,” he says. “But we don’t think it’s ‘winner take all.’ We recognize it’s going to be a competitive industry.”
PLACING BETS, AMASSING REWARDS
Fanatics has positioned itself at the center of sports fandom in recent years. In addition to selling licensed apparel, it now offers trading cards, collectibles, and memorabilia. Its live events arm produces the annual Fanatics Fest in New York City, which has become something of the Comic Con of sports. The company’s Fanatics ONE rewards program, meanwhile, knits together these disparate arms, offering users rewards for betting and shopping.
In the coming months, King expects to integrate Fanatics Markets with Fanatics ONE. Users might earn rewards points the more they trade, for example.
“You’ll also see traders, the more they trade, unlock benefits that are really only available to our best users, whether that’s access to exclusive merch drops, or free tickets to Fanatics Fest, or other things like that,” he says. “It’s a formula we’ve seen work in the other categories that we operate in, and so we know there’s a huge overlap between the customer demographic, trading and prediction markets, and some of our other core businesses.”
Sports is emerging as a prediction markets linchpin because of the frequency and regularity of the events it comprises. “Month in, month out, there’s always something going on,” says Travis McGhee, global head of predictions at Crypto.com.
Prior to its Fanatics collaboration, Crypto.com launched sports event trading last December. The trading platform also announced a prediction markets partnership with Underdog, a fantasy and sports gaming company, in September.
But even sports-first Fanatics sees potential in a broader realm of trading possibilities.
“Sports is the most intuitive Tech to net-new users,” King says of prediction markets. But he expects to see sports fans expand their trading activity to new categories as they get more comfortable with the format. “If you think about the papal election, when there were a lot of Chicagoans rooting for our man, that was incredibly popular on a relative basis,” he says. “And I think if that were to happen again today, it would be orders of magnitude more popular, because you have so many more users that are on these platforms and aware that they can now express an opinion.”
Sports leagues have their offseasons. But if Fanatics has its way, there will always be a reason for fans to log on and put money down.