Missing the jump? OSB market leaders won’t want to cede predictions ground.
In +More: Vegas down in April.
Penn and ink: Another day, another set of accusations in the Penn proxy fight.
24-hour party people: Kraken’s round-the-clock tokenization trading plans.
Hard Rock Bet is growing – we know you know! And we want to bring in some more maestros to make beautiful music in our Sportsbook. You need to be among the very best in the industry to be considered for these roles. Are you up to it?
Transfixed
Calibrate good times, c’mon: DraftKings and FanDuel will be nervously eying each other waiting to see what the other is planning in response to the emergence of prediction markets as a competitive threat, fearful of getting beaten to the punch by their major rival.
“If I am anyone of the incumbents, my biggest fear is getting this wrong,” said one industry insider who opted for anonymity.
“The secondary issue is trying to understand what ‘wrong’ looks like,” they added.
Shooting party: Said another industry consultancy source who also opted for their name not to be used: “The big two are like deer in the headlights right now – and the gamekeeper has just been told he can’t shoot the poachers.”
Wouldn’t want to be in your shoes: While the rest of the sector will also be affected by what happens in the predictions space, it is the market leaders that are judged to have the most to lose.
“The big gaming guys might think a shake-up is possibly good for them,” said the industry consultant. “It’s a bigger problem for DraftKings and Flutter.”
Hey, that’s our playbook: Both companies will be well aware of the potential for Kalshi, Robinhood and potentially other operators that enter the predictions space to build a database in as yet unregulated states. It is, after all, exactly what they did with DFS.
“Neither are strangers to operating outside the traditional regulated gambling framework,” said Chris Grove from EKG.
“Their roots in fantasy sports and ventures into skill-based games show the companies know how to build products that sit just outside the regulatory core.”
Seed venture: Both the OSB market leaders will be cognizant of the danger of seeding ground in as-yet-unregulated states, particularly California and Texas. “If it is Kalshi and Robinhood who dominate the California and Texas markets, that’s a problem,” said the industry consultant.
The response, then, would be to launch a product in unregulated states with the potential of securing a “promising foothold,” said Grove.
While prediction markets “might seem like a curveball,” Grove suggested it’s a “pitch they’ve seen before” and much of the present infrastructure can be immediately repurposed.
The age of wisdom, the age of foolishness: But as Grove pointed out, “this is a tale of two markets” and in already regulated OSB states, the picture is more nuanced.
“In states like New York, it gets more complicated,” he said. “Regulated operators are hemmed in by high taxes and struct rules, while prediction market entrants operate under lighter oversight.”
That, he added, puts sportsbooks “in a bind,” forced to compete against products that “aren’t burdened by the same regulatory weight.”
Tax and upend: Moreover, if the prediction market provider and operators develop the product to the point of competing with the OSB product in regulated states, then there is also a tax-free competition problem.
Added to this, Underdog and PrizePicks “might be ahead of the big two here,” said the unnamed industry insider.
“They already have the brand awareness and the distribution,” they added. “That is another reason why the OSB incumbents have to figure things out quickly.”
Under wraps: This “figuring out” is unlikely to take place in the public eye. Both Jason Robins at DraftKings and Peter Jackson at Flutter acknowledged analyst questions about prediction markets on their respective Q1 calls, but didn’t give much else away.
On DraftKings recent Q1 call, Jason Robins said prediction markets were what “everybody is talking about right now.”
Meanwhile, Jackson said FanDuel was “interested in the potential opportunity” and made the point once again that the sports prediction product was “quite limited.”
But he hinted at ongoing discussions within the company. “We’re not going to take you through all the details of how we’re thinking about tackling the prediction market, there’s a bunch of different ways we can think about it,” he said.
Hut! The internal discussions among operators will be taking place, as it is reported by The Closing Line that Kalshi now has single-game markets for the NFL.
Further reading: All this fuss over what as yet appears to be relatively little in terms of revenues, as InGame reported Kalshi likely generated a mere $15.2m in revenue in the three months between late February and late May.
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+More
Las Vegas data points: Strip revenues fell 3% YoY in April against an all-time high for the month this time last year to $647m while Locals was up 3% to $279m. The Strip fall was driven by slot revenues, which were off by 5% to $385m. Baccarat rebounded 41% to $108m. Truist noted the 5% fall in visitation came despite a strong convention and event calendar.
DraftKings has renewed its partnership with Meadowlark Media, the venture launched by former ESPN president John Skipper and longtime sports personality and podcaster Dan Le Batard.
Read across
Papara over the cracks: The Turkish authorities have detained 13 people as part of an investigation into payments provider Papara over suspected money laundering, illegal betting and establishing a criminal organisation. In yesterday’s Compliance+More.
Getting the Hump: The UK Gambling Commission’s Gambling Survey for Great Britain has come in for criticism from the Office for Statistics Regulation for failing to communicate the biases that may affect its estimates. From Tuesday’s Compliance+More.
+More careers
OpticOdds has appointed Leo Barker as VP commercial for its Europe, Middle East, and Africa regions. Barker was previously at Genius Sports. GR8 Tech has appointed Lusine Khudaverdyan as head of its casino business. LuckyStreak has appointed Neil Brooke as head of product. Brooke was most recently head of product at Inspired Entertainment.
Head of CRM – Remote
Group Online Director – Africa
Chief Data Officer – San José, Costa Rica
Earnings edit
Cirsa
Clearing the decks: Sorting out its debt and leverage profile remains a priority for the Spanish and LatAm casinos, slot hall and online operator, as the company announced ahead of its earnings a new €600m debt package that will help the company reduce its leverage to 3.4x from 3.8x.
See yesterday’s Earnings Extra (PRO subscribers only).
Earnings in brief
Opap: Q1 GGR rose 8% YoY to €595m while EBITDA was 9% higher at €207m. The company said it had seen continued momentum in iCasino where revenue rose 20% to €84.9m. Betting rose 13% to €190m while lottery was up 5.5% to €207m.
NorthStar Gaming: The Ontario-focused operator saw revenue rise 32% to C$7.8m ($5.6m) while net losses were crimped to C$5.8m. The company said it was “eagerly” awaiting news on the new regulated market in the province of Alberta.
Penn and ink
One last thing: Picking at the scab, Penn Entertainment has returned to the 116-page HG Vora presentation deck and now claims it has “come to our attention” that “material omissions in its public filings are creating confusion.”
Specifically, it said HG Vora omitted the fact that William Clifford was interviewed by the board nominating committee, “leaving the impression” he was not considered equally relative to the other two nominees.
“That implication is false,” the Penn statement added.
Coming up short: Penn went on to state that it applied the same process to reviewing Clifford’s candidacy as it did with those of Johnny Hartnett and Carlos Ruisanchez who have both been nominated.
All three were interviewed, but after interviews and due diligence the board determined that Clifford was “unsuited” to serve because he “did not possess the experience, skills or other characteristics necessary.”
Aristotle over there: Not to be outdone, HG Vora has also issued another letter accusing Penn of “disingenuous rhetoric,” adding “it seems this board’s disrespect for shareholders knows few limits.”
The letter goes on to accuse the board of taking “extraordinary measures” to obstruct and is “seeking to circumvent accountability.”
HG Vora finishes the latter with a flourish: “Shareholders should not tolerate such a manipulation of the electoral process, least of all from a board that has presided over years of value destruction.”
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Connections
The big deal: IGT’s PlayDigital has launched a new promotional tool called Mega Vault, which combines engagement tools including prize drops, leaderboards and marketing jackpots into a single, customizable product for operators. The product has already launched with Fanatics, FanDuel and Rush Street Interactive.
BetMGM has announced it is the new exclusive iCasino and OSB partner of the WNBA’s Las Vegas Aces. It is the company’s first major partnership with a women’s professional sports franchise. Additionally, BetMGM plans on releasing a WNBA-branded online slot game in the near future.
The Elantil platform will now carry games from Swintt. NetBet Greece will now offer Push Gaming’s online games on its platform. Greentube has added its slot games to StarCasino’s platform in the Netherlands. Octoplay’s games are now live in Denmark through a new partnership with Danske Spil. CreedRoomz live casino games are now available to operators on Everymatrix’s CasinoEngine platform.
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Sector watch – tokenization
24-hour party people: Crypto trading platform Kraken has announced a partnership with tokenized assets provider Backed to offer xStocks, a round-the-clock tokenized equity product in non-US markets.
Claiming that what they called TradFi “hasn’t kept up with the pace of innovation,” and relies on “outdated rails,” limited hours, high fees and exclusionary friction layers.
Instead, the company sees “tokenized equities as the next frontier.”
Trad jazz: Now Kraken’s clients ex-US will be able to gain exposure to “several” popular US-listed stocks and ETFs, which will be issued as SPL tokens on the Solana blockchain. Notably, it will allow users to leverage their xStocks as collateral in ways that simply is not possible through ‘traditional finance’ or TradFi.
“We’re reimagining equities investing and ushering in a new wave of demand from clients seeking better alternatives to the status quo,” said Mark Greenberg, head of consumer at Kraken Global. “This is what the future of investing looks like.”
Betting, er, 365: Speaking at Bitcoin 2025 about Kraken’s moves and tokenization generally, Robinhood CEO Vlad Tenev said “when everyone sees the benefit of this technology, it will go from being a possibility to being inevitable."
He added that within the US, “we already have it pretty good” with users “trading over 1,000 securities 24/5 and of course we would love that to be 24/7.”
“That said, we do believe it should happen and there is a lot of interest in making it happen both from industry and the regulators,” he said.
“I think the SEC has the authority to enable tokenization of securities on an exemptive basis, without Congressional action.”
You want a piece of me? Tenev said what would be “massively transformative” in the US was the tokenization of private companies.
“We live in a strange world where SpaceX and OpenAI are deemed too risky for retail investors, but meme coins are OK,” he said.
“If you tokenize “you solve a lot of other problems,” he added, including gaining access to billions of people with existing bitcoin wallets.
He said tokenizing private companies would be an “enormous unlock” and, looking 10 years hence, this could include “tokenizing single-person companies.”
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Upcoming earnings
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Jun 24: FDJ United investor meeting
Jul 17: Evolution
Jul 18: Betsson
Jul 23: Kambi, Las Vegas Sands
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