Sporttrade CEO Alexander Kane has suggested it is “intellectually inadequate” to compare prediction markets and commercial online sports betting operators, as he assuaged fears of cannibalisation.
As part of a panel discussing the growing vertical at the SBC Americas Summit this week, which was one of the most well-attended during the conference, Kane said the two products could live side by side.
Kane, who has asked the Commodity Futures Trading Commission (CFTC) to allow Sporttrade to roll out event contracts nationwide, was bullish in his defence of the sector.
Concerns were raised over whether the likes of Kalshi and Robinhood have been allowed to launch a form of sports betting across the US, including in states which have yet to legalise.
However, the Sporttrade CEO said the ecosystem was more than capable of supporting both types of business, with his key point centered on product differentiation.
Kane said: “This is a very nuanced topic, right? And I think that to call what DraftKings currently offers and what Kalshi offers or what Sporttrade offers as both sports betting, is intellectually inadequate. They’re so different.
“[Some people] think this is some existential threat to what we currently think sports betting is. Caesars, MGM, DraftKings, FanDuel – they know they make 85% to 90% of their free cash flow from parlays and SGPs [same game parlays] and the types of things that aren’t even close to what’s being offered on these prediction markets.”
Extrapolating on his point about being able to co-exist, Kane pointed to the hold that prediction markets will report in comparison to commercial operators.
Additionally, as has been seen in more mature markets like the UK, even market leading exchanges like Betfair are some way off the leading sports betting operators.
Kane continued: “So Maryland, just last month reported 11.5% hold. [Hypothetically] out of maybe $100m spent, $11m was kept by the sportsbooks. And I can tell you that that hold for an exchange would be 1/100 of that.
“If we were to say that sports betting and what these prediction markets offer are the same, the only thing they have in common is that you’re risking money to win money, and it involves sports. But there is no other thing that is similar or exactly the same or congruent between DraftKings offers and when someone like Sporttrade offers.”
Kane also predicted that state revenue income will not be impacted by the emergence of Kalshi and other prediction markets in the space.
“From a state revenue tax perspective, we’re going to see over the next year – it’s not going to have an impact,” he added. “That’s because the SGPs, the juicy stuff, the online casino, is not happening on prediction markets, in my opinion.”
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Alexander Kane states that lack of same game parlays on platforms such as Sporttrade mean different consumers will seek out difference experiences
The post Sporttrade CEO insists prediction markets and OSB can co-exist first appeared on EGR Intel.