Prediction Market Industry Can Sustain Five to Eight Competitors, Says Creative Expert

The still young prediction market arena is teeming with competition, but the credibility of some competitors and the industry’s ability to sustain a large population are lingering questions. There are a lot of prediction market operators, but many won’t be successful, says an expert. (Image: Shutterstock) By some estimates, there are approximately 40 companies offering event contracts today in the U.S. and some market observers believe that figure could swell to 50 by the end of 2026. Either figure is likely too high because as Colormatic CEO Chris Marcus puts it, citing industry research, “the number of durable operators the market can support” is five to eight. “That’s not a competitive market. That’s a queue for the exit,” observes Marcus. He knows what he’s talking about. One of his creative agency’s clients is PrizePicks, which has a prediction market partnership with Polymarket. Due in part to PrizePicks’ event contract exposure, Allwyn announced last November it’d pay up to $2.5 billion for a 62.3% stake in the gaming company. Low Barriers to Entry The estimate of five to eight viable prediction market operators jibes with forecasts floated by some on Wall Street. Some analysts believe the U.S. event contract industry will eventually morph into a five-horse race consisting of DraftKings, FanDuel and Polymarket, among others. However, barriers to entry are low, enticing companies outside of the top tiers to roll the dice on prediction market success despite long odds. “That looks like a closed category, and at the exchange layer, it may be, since liquidity concentrates. But that’s not where the other forty compete,” notes Marcus. “Vendors now sell white-label prediction market platforms that let any operator launch under its own brand.” Under that model, any upstart operator can easily access prediction market technology and partner with an established player, such as Polymarket, and show customers the same markets and odds as the partner. That puts a burden on incumbents and upstarts alike to captivate bettors’ and traders’ attention because, at the product level, there’s little differentiation. Sports Betting Parallels Talk of the prediction market industry being hospitable to at most eight companies draws comparisons to the U.S. online sports betting segment. Aside from the DraftKings/FanDuel duopoly, only a handful of operators are seen as viable and possessing decent market share. There are other parallels, including prediction market operators’ marketing schemes and deployment of deposit bonuses. Citing the example of Penn Entertainment’s failed ESPN Bet gambit, Marcus cautions that prediction market operators don’t necessarily need scale, but they do need to create memories with prospective customers. “And if scale saved you, ESPN Bet would have worked. The most recognized brand in American sports media, attached to a sportsbook via a $1.5 billion deal with Penn, ran two years, never cleared 3% share and shut down last December,” wrote the creative expert. “Awareness was never the problem. Everybody saw it. It just wasn’t a memory.” The post Prediction Market Industry Can Sustain Five to Eight Competitors, Says Creative Expert appeared first on Casino.org.