An analyst at Macquarie said they don’t expect prediction markets to have a material impact on US sportsbook operators’ earnings in 2025.
The prediction markets product is not competitive with sportsbooks, especially for live betting, props and parlays, argued Macquarie senior gaming, lodging & theatres analyst Chad Beynon in a note published yesterday (1 October).
It follows operators with an exposure to US online sports betting including Flutter, DraftKings, MGM Resorts and Ceasars seeing a share price hit this week, after leading prediction market Kalshi quietly launched its sports parlay product.
Beynon wrote: “We do think the threat is real, particularly for new states as Prediction players are gaining first-mover advantage, which could lead to higher initial promo periods for sportbooks and reduced TAM. With that said, we think the current sell-off is overdone.”
Speaking to nextpredict.io/ this week, Regulus Partners’ Paul Leyland said the threat to sportsbooks from prediction markets from their parlay product was likely on the VIP side.
This, he argued, was due to high-value bettors possibly being enticed by the potential pricing advantage, and not being put off by a likely less intuitive user experience.
In his analysis, Beynon added that prediction markets volume is largely from US states that have yet to legalise sports betting, like California and Texas.
Macquarie leaves online GGR estimates largely unchanged
As a result, the analyst said Macquarie is leaving its online GGR estimates from 2025 to 2027 largely unchanged.
In the nearer term, Macquarie models Q3 online GGR growth of 21%, comprising 13% for OSB and 32% for iGaming, accelerating to a 34% overall increase in Q4.
Meanwhile on the land-based side, the analyst wrote that he expects Las Vegas Strip GGR to rise 2% year-on-year in Q3 driven by a weak baccarat comparable last year.
However, Macquarie noted Strip revenue per available room is trending down 9%.
Benyon wrote: “As a result, we expect low-to-high-single-digit 3Q declines depending on comparable, disruption, and tier. For LVL, Strip softness could spill over on a delayed timeline given an overall softer local economy, which has already prompted higher promotional/ marketing activity on both the Strip and Locals market.”