FORT LAUDERDALE, Fla. - Prediction markets and traditional sportsbooks are often portrayed as rivals battling for the same customer, but an executive from a leader in both industries says the two products are increasingly proving to be complementary businesses rather than direct competitors.
- A DraftKings exec says prediction markets and traditional sportsbooks are increasingly complementary products that serve different customer needs rather than competing for the same users.
- The company believes prediction markets can expand customer engagement by offering contracts tied to politics, economics, climate, and crypto while also filling slow sports betting periods.
- Industry leaders expect continued prediction market growth, though legal battles over federal versus state regulatory authority continue.
Speaking at a SBC Summit North America panel Wednesday, Jeanine Hightower-Sellitto, senior vice president and general manager of DraftKings Predictions, argued prediction markets and sportsbooks serve different functions and customer needs, even as both increasingly operate under the same corporate umbrella.
“It allows us to reach into a new audience with a product that can be available to them, and it allows us to serve our current sportsbook audience with a new whole set of content categories that currently aren't available for a sportsbook customer,” Hightower-Sellitto said. “And so it's really a different kind of model, it's a different trajectory, but very complementary at its core.”
Prediction markets as sportsbook complements
The comments come as prediction market sites continue to expand rapidly across the U.S., fueled by federal court victories, growing trading volumes, and new regulatory proposals from the Commodity Futures Trading Commission. On Wednesday, the CFTC formally proposed rules that would establish a federal framework for sports-related event contracts, a significant step toward long-term regulatory clarity.
DraftKings has emerged as one of the highest-profile entrants into the sector. The company launched its prediction markets product in late 2025 and has integrated it directly into what executives describe as a “super app” strategy that combines sportsbook wagering and prediction market trading in a single platform.
Hightower-Sellitto maintains the distinction between the products is fundamental.
“When I think about sportsbook, it is a single-dealer market. It's a marketplace that exists and there's one market maker that exists in that marketplace,” Hightower-Sellitto said. “Prediction markets operate differently. The economics of it are different.”
Rather than cannibalizing sportsbook activity, Hightower-Sellitto argued prediction markets allow DraftKings to reach new audiences and offer products that sportsbooks cannot. The company can offer contracts tied to politics, economics, climate, and cryptocurrency while simultaneously serving traditional sports bettors.
Prediction markets also help fill periods when sports betting activity is slower, providing tradable markets throughout the day and week.
Future prediction market growth
Other panelists suggested the broader convergence between gaming, trading, and financial services is only beginning.
Alex Kane, founder and CEO of Sportrade, said investors increasingly view prediction markets as part of a larger shift that could eventually blur the line between betting and financial trading.
“The prediction market sits in the middle of that Venn diagram,” Kane said.
Kane, whose company has pivoted from offering a state-licensed sports betting platform to a federally regulated prediction market, pointed to growing valuations for companies such as Kalshi and Polymarket and suggested the future could include sportsbooks offering financial products or trading platforms expanding into gaming-related offerings.
Sporttrade CEO Alex Kane pitched to Mass. regulators to permit sportsbook operators with prediction markets (FanDuel, DraftKings, Fanatics) to be able to offer both, arguing it would expand the player base and generate more state tax revenue, Kane said during today's SBC Summit
— Ryan Butler (@ButlerBets) June 10, 2026
“You should be able to trade anything at close to zero spreads,” Kane said.
The discussion highlighted how rapidly the sector has evolved from a niche product into one of the industry's most closely watched growth areas. Hightower-Sellitto noted prediction markets are now a strategic priority for DraftKings, which believes its sports expertise, customer base, and technology infrastructure position it well for long-term success.
Challenges remain
Still, the industry's future remains tied to ongoing legal and regulatory battles.
Prediction market news has been dominated over the past year by court battles against state regulators and gaming agencies that argue sports event contracts function as a form of unlicensed sports betting. At the same time, prediction market operators and the CFTC have argued event contracts are federally regulated derivatives that fall under the Commodity Exchange Act rather than state gambling laws.
Federal courts have begun weighing in. The Third Circuit recently found that sports-related event contracts are likely swaps subject to federal oversight, while the Ninth Circuit appears skeptical and set to potentially rule against the prediction market platforms.
Legal observers increasingly expect the jurisdictional dispute to reach the U.S. Supreme Court.
Meanwhile, the CFTC is moving forward with a comprehensive rulemaking process that would permit many sports-related contracts while restricting markets viewed as particularly susceptible to manipulation, including those tied to player injuries, officiating decisions, and certain other event categories.
Speaking at Wednesday’s event, former CFTC enforcement director Ian McGinley said the industry's long-term success will depend on regulatory credibility and market integrity as much as product innovation. McGinley added the current legal landscape remains highly unsettled, with state gaming regulators, tribal interests, and private litigants all pursuing separate challenges against prediction market operators.
McGinley also pointed to the CFTC's newly proposed rules as a potentially significant development for the industry. While he had only begun reviewing the proposals released Wednesday morning, he said regulators appear focused on preventing contracts that can be more easily manipulated, such as markets tied to events controlled by a single individual or contracts involving subjects such as assassination, terrorism, or war.
“I think what the CFTC is trying to accomplish in its current proposed rule is to make sure the contracts that are really on their face susceptible to manipulation are not permitted to be traded,” McGinley said.
For industry executives gathered in Florida, such as DraftKings’ Hightower-Sellitto, the debate has already moved beyond whether prediction markets will survive.
“If we're back here in a couple of years talking about prediction markets like we are today, we're in a very weird state at that point,” Hightower-Sellitto, whom Covers interviewed in December, said Wednesday. “I think prediction markets just become part of the overall landscape of both the financial and the sports betting outlook, and they're just another tool and another product customers use on an ongoing basis, and they're not controversial.”
