Genius Sports CEO: We Get Paid However Americans Wager
Genius Sports co-founder and CEO Mark Locke has told investors that regulatory change coming for prediction markets will not hurt the company, because it is positioned to be paid regardless of how the industry's rules shift.
"Increases in wagering volumes support the demand for Genius products, irrespective of the form that wagering takes," Locke wrote in a note published on the company's own newsroom on September 15, titled "Americans Are Going to Keep Wagering."
Supplying Both Sides Of The Market
Locke said Genius Sports already works both sides of the US sports betting market, supplying official data, settlement and integrity services to sportsbooks such as DraftKings and FanDuel while also serving prediction market platforms Kalshi and Polymarket.
"Supplying rivals is how we have always worked: DraftKings and FanDuel compete for the same customer yet both buy from us," he wrote. "And I believe that the settlement standards regulators are now writing will raise the value of official data."
He argued that the demand prediction markets have surfaced looks largely incremental rather than simply diverted from existing sportsbooks, pointing to Eilers & Krejcik Gaming's July monitor, which found 69% of Kalshi's retail demand sits in states with no legal online sportsbook, with only about 2% of Kalshi's combined handle coming from mature online betting states.
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Expecting The Rules, Not The Demand, To Change
Locke said he expects prediction markets to look different by the time the regulatory picture settles, pointing to North Carolina's new tax on exchanges' net trading-fee revenue, Illinois' transaction levy and the CFTC's ongoing rulemaking as early signs of a longer process that "will take years."
"The prediction markets of today are very unlikely to look like the prediction markets of tomorrow: the rules on access, tax and product will move, and some of today's advantages will move with them," he wrote.
"What is almost certain is that the liquidity will be captured, taxed and regulated under some regime, federal, state or both." His conclusion, he said, is that "the route decides who pays us. The demand decides that we are paid."
Betting On Data, Not On A Winner
Locke also addressed the legal fight playing out over prediction markets in the US, writing that even a decisive Supreme Court win for exchanges would settle only which laws apply to sports-event contracts on CFTC-registered platforms, leaving product rules, taxes and consumer safeguards still open to debate, with the CFTC already working on a more detailed framework for event contracts.
He argued that the underlying value Genius supplies, official data and settlement of what actually happened in a sporting event, holds up regardless of which side of that regulatory fight eventually wins out, since "pricing tolerates approximation, because the market corrects it. Settlement does not, because it is final."
