Genius Sports co-founder and CEO Mark Locke published a public letter on Monday arguing that the consumer demand generated by prediction markets will outlast whatever legal outcome eventually reshapes the sector, according to next.io, which first reported on the letter.
Locke wrote that the debate around sports prediction markets has been framed too narrowly, as if the entire opportunity depends on a single legal ruling. “The future of sports prediction markets is being discussed as though it hangs on a single legal answer: either today’s model survives or the opportunity disappears,” he wrote, according to next.io.
He was blunt that the current crop of prediction market operators may not be the ones who ultimately benefit. “Some current advantages will disappear, and today’s winners may not be tomorrow’s,” Locke wrote, adding: “Americans are going to keep wagering on sports, and Genius will be paid however they do it.”
The 11 holdout states and Kalshi’s retail base
Locke’s letter leans on data from Eilers & Krejcik showing that, as of July, 69% of Kalshi’s retail demand came from states without legal online sportsbooks, while its combined handle across mature betting states sat at roughly 2%, per next.io’s reporting. He argues this points to two possible outcomes: sportsbook operators in regulated states could absorb prediction market bettors if the format is curtailed, and the 11 states that have not legalized sports betting could face renewed pressure to do so.Locke acknowledged that a Supreme Court decision separating sports betting from prediction markets would not necessarily flip holdout states such as California or Texas overnight, noting that lawmakers there have long understood the tax revenue at stake without acting on it.
Locke acknowledged that a Supreme Court decision separating sports betting from prediction markets would not necessarily flip holdout states such as California or Texas overnight, noting that lawmakers there have long understood the tax revenue at stake without acting on it.
Suppliers as the likely long-term winners
Locke’s letter positions suppliers, rather than any single operator or exchange, as the group best placed to benefit no matter how the legal fight resolves. He pointed to Genius Sports’ role supplying official data, settlement and integrity services to DraftKings, FanDuel, Kalshi and Polymarket alike, plus its sale of data and pricing to market makers providing exchange liquidity, and its Legend media platform’s role in customer acquisition for operators.
He also cited Flutter’s characterization of FanDuel Predicts as a customer-acquisition tool ahead of state-level regulation, framing it as valuable “under today’s product and the next one,” according to next.io’s account of the letter.
The letter arrives amid what next.io described as a period of real shareholder uncertainty for Genius Sports, whose share price has fallen sharply, by nearly 10%, as prediction markets have eaten into the traditional sports betting operators the company also serves. DraftKings and FanDuel, both established sportsbook operators that have since launched their own prediction market products, have been among those affected by the sector’s growth, per next.io. InterGame Online also reported on Locke’s comments backing prediction markets’ staying power.
