The betting industry is changing rapidly. At this moment, most of the news is coming from the USA. For years, the gambling market was defined by sports-related wagers. Will this team win in football? How many total points will that basketball game have?
However, in the last few months, a major shift has occurred, and the industry is embracing a model that is more of a stock exchange rather than a traditional sportsbook. Industry leaders such as Bet365, FanDuel and DraftKings paved the way on this new path after exiting the American Gaming Association (AGA).
Why Are Big Operators Leaving Traditional Groups?
Three of the “Big Four", together with BetMGM, decided to explore new perspectives, moving gradually away from the old-school gambling scene. The idea behind the exit is to expand into a hybrid betting model, including prediction markets in its services. AGA is resisting this option, and Bet365 needed freedom to innovate.
DraftKings and FanDuel were the first companies to move away from AGA. All three operators are increasingly interested in “event contracts,” as major prediction markets in the US are. These are options where people can wager on specific events that require a simple “yes” or “no”. The difference is that bettors can act as if they were trading a stock.
The traditional bookmakers understand that the “old ways” are not as profitable as they were in the past, and they want to offer more flexibility to the bettors. Products like the event contracts can keep them engaged 24/7, even when there are no games available, since they can trade in and out of their positions whenever they want.
How Does The Global Market React?
While the betting companies shift towards new products, the US government appears to be skeptical about them. Only recently, Senators Adam Schiff and John Curtis joined forces to prepare a bipartisan bill that will effectively ban betting on sporting events in prediction markets. Industry experts highlight that lawmakers are protecting the entire market and safeguarding the licensed operators in each state.
On the other hand, other territories find the addition of prediction markets extremely interesting. Authorities in Malta are exploring the possibility of regulating the new industry to capture a share of the $31.5 billion in prediction market trading. Malta is a heavyweight in gambling and a major hub for betting companies. The latter know that sooner or later they will need to compete with the “modern options” of betting, or their most valuable players will look elsewhere for alternatives.
