In the latest episode of Right to the Source, co-hosts Robin Harrison and Ed Birkin revisit discussions surrounding FanDuel after their recent conversation with Nigel Eccles. They dive into several pivotal themes currently shaping the gambling industry, including the resurgence of prediction markets.
Ed begins by sharing insights from H2’s unpublished prediction market data. He reveals that the NFL sportsbook handle has remained relatively stable this year, showing a slight increase of 0.4% in reporting states, while including Florida results in a decline of 1%. This balance stems from about 4% organic growth countered by a predicted 4% to 5% headwind attributed to the rising prominence of prediction markets.
Notably, prediction markets have carved out a larger segment of the overall handle in regulated states, increasing their share from approximately 5% six months prior to around 15%. Much of this growth is linked to aggressive spending related to the World Cup and through August. Ed hints that one state is feeling significant pressure from these markets. Listeners are encouraged to tune in for the reveal.
The episode also addresses the uncertain legal terrain surrounding prediction markets. Ed shares insights from a recent trip to the US, where observers predict a showdown between states and the Commodity Futures Trading Commission (CFTC) may escalate to the Supreme Court by 2027 or 2028. This discussion gains urgency in light of the NFL's recent filing of an amicus brief advocating for the Supreme Court's involvement in the ongoing Flaherty vs KalshiEx, LLC case.
Wrapping up the episode, Robin and Ed engage in a dynamic discussion regarding mergers and acquisitions within the industry. They analyze several recent deals, focusing on the Banijay and Tipico merger and utilizing Flutter as a central case study. Ed contends that there has yet to be a demonstration of value creation from Flutter’s acquisitions beyond what FanDuel has achieved. The conversation leads to questioning where Lottomatica’s acquisition of Cirsa fits into this narrative. Tune in to hear their conclusions.
