The National Hockey League (NHL) has made a groundbreaking move by entering into licensing agreements with prediction market platforms Kalshi and Polymarket. This development marks the first time a major U.S. professional sports league has allowed the use of its brands through prediction markets, also known as “licensed betting markets.” The multiyear deals grant both platforms the right to use the NHL logo, terms like “NHL” and “Stanley Cup,” and individual team names, thereby formalizing prediction markets’ foray into sports betting.
According to a report by The Wall Street Journal on Oct. 22, the intellectual property package extended to Kalshi and Polymarket is the same one the league offers to sportsbooks such as DraftKings, FanDuel, and BetMGM. This move has significant implications, as it draws a connection between traditional sports betting and prediction markets, which are regulated by the Commodity Futures Trading Commission (CFTC) rather than state gambling commissions. Keith Wachtel, president of NHL operations, expressed his enthusiasm for the partnership, stating that “buying markets are here to stay” and that the collaboration with Kalshi and Polymarket could expand the league’s fan base to include tech-savvy users of betting markets.
Increase in Volume and Market Share
The partnership between the NHL, Kalshi, and Polymarket comes at a time when prediction markets are experiencing substantial growth, with billions of dollars in quarterly volumes. Kalshi and Polymarket are the largest platforms in this space, accounting for 46.6% and 52.1% of the market, respectively. Data from a Dune dashboard by user dunedata shows that Kalshi’s volume increased from $1.9 billion in the second quarter to $4.5 billion in the third quarter, while Polymarket’s volume increased from $3.2 billion to $3.7 billion over the same period. This growth indicates a significant increase in market share for prediction markets, potentially at the expense of traditional sports betting operators.
The previous quarter’s total volume was $8.2 billion, representing a 61% increase over the second quarter’s results. Kalshi has seen record sales since Sept. 29, when it launched a product similar to same-game pays, and brokerage firm Robinhood Markets reported rising sales in sports contracts. In contrast, shares of DraftKings have fallen 27%, while shares of FanDuel parent company Flutter Entertainment have fallen 14% since the launch of Kalshi’s new product. The licensing agreements between the NHL, Kalshi, and Polymarket remove restrictions on the use of official league branding, allowing these platforms to market sports contracts using the NHL logo, terms, and team names.
Implications for Traditional Sports Betting Operators
Established sports betting providers have taken notice of the growth of prediction markets and are adapting their strategies accordingly. DraftKings acquired Railbird Technologies, which owns a CFTC-licensed exchange, as part of its efforts to enter the prediction market space. FanDuel partnered with CME Group, an exchange operator, to develop a trading platform similar to Kalshi’s. Furthermore, Polymarket received a $2 billion investment commitment from the parent company of the New York Stock Exchange, supporting its plans for a relaunch in the US in the coming months. These developments suggest that traditional sports betting operators are recognizing the potential of prediction markets and are taking steps to remain competitive.
The partnership between the NHL, Kalshi, and Polymarket demonstrates the increasing legitimacy of prediction markets in the sports betting landscape. As the market continues to evolve, it will be interesting to see how traditional sports betting operators respond to the growth of prediction markets and whether they can maintain their market share. For more information on this topic, visit https://cryptoslate.com/8-2b-prediction-markets-just-got-major-league-sports-backing-do-sportsbooks-lose-share-next/
