PrizePicks and Polymarket are teaming up to launch a new prediction markets platform.
The news follows an announcement by PrizePicks in September that its Performance Predictions II subsidiary has secured registration as a Futures Commission Merchant (FCM) by the National Futures Association (NFA), allowing the DFS operator to facilitate trades on futures contracts offered on CFTC-regulated Designated Contract Markets.
The partnership will see Polymarket’s event contracts integrated onto PrizePicks app. The offerings will go beyond sports, according to the press release, which also mentions “entertainment and cultural moments”.
The launch will have to wait for Polymarket’s US re-entry, but that seems imminent, especially with the end of the government shutdown in sight.
“As Polymarket prepares for its anticipated re-entry into the U.S. market,” the press release says, “this collaboration further strengthens its mission to make prediction markets accessible and trusted at a global scale.”
Partnerships Expanding Quickly Across the US
The PrizePicks/Polymarket tie-up is the most recent in a lengthening list of deals as sports betting companies seek a slice of the prediction markets pie.
Underdog, a major competitor of PrizePicks in the fantasy pick ‘em space, partners with Crypto.com to offer sports event contracts in 16 states.
Last week, DraftKings, fresh off its acquisition of CFTC-approved Railbird Exchange, unveiled plans to launch a prediction markets platform that will include sports event contracts.
FanDuel, meanwhile, is teaming up with CME Group, but both partners maintain they need the right regulatory environment to move forward with sports event contracts.
Convergence of Prediction Markets and Sportsbooks
PrizePicks CEO Mike Ybarra discussed the Polymarket deal on Squawk Box today and was asked by CNBC’s Andrew Ross Sorkin about the convergence of sports betting and prediction markets.
“I think it complements our business very well,” Ybarra responded. “I don’t think it’s one takes over the other. This is about expanding the number of customers that we have for our product, but also enabling us to enter new states … and welcome millions more people into the PrizePicks environment.”
Ybarra also explained the disputable notion that “prediction markets is peer to peer” as a key distinction between prediction markets and sportsbooks.
“In online sports betting, those operators create the lines, and they build in profit into those lines. You’re playing against the house,” he said. “Prediction markets is peer to peer, and what that means is it’s supply and demand. Is it A or is it B? There is no against-the-house market there, and I think that’s very important to understand.”
Sorkin dug deeper, asking if M&A between sports betting sites and prediction markets will eventually mean consolidation to two or three major platforms.
“From the customer experience, it may actually not be that different whether you’re betting against the house, per se, versus betting on those markets,” Sorkin probed.
“I think you’re going to see a lot of new players in the market, and the more competition that comes in the United States, frankly, the more innovation and the more customer value you’ll see,” Ybarra said. “At PrizePicks, it’s important for us to have a single-app experience across daily fantasy sports and prediction markets, but we welcome the competition. We hope that a lot of new people come in, and it’ll push us to innovate more and frankly drive a lot more customer value.”
