TLDR
- MLB signed a sponsorship deal with Polymarket reportedly worth $150-300 million over three years
- Sportsbooks like FanDuel and DraftKings are paying extra to expand their category definitions and block prediction market rivals
- The NFL sports betting category is open for the first time since 2021 after FanDuel and DraftKings walked away from increased data costs
- The sports betting sponsorship market has shifted to a buyer’s market, with teams struggling to fill partner slots
- Prediction market team-level deals are expected to follow once leagues finalize their own agreements
The battle for sports sponsorship dollars is heating up between traditional sportsbooks and prediction market platforms.
MLB became the latest major sports league to sign a prediction market deal last month. The league inked a sponsorship agreement with Polymarket reportedly valued between $150 million and $300 million over three years.
The deal also included an integrity-focused agreement with the CFTC. Polymarket is now MLB’s Official Prediction Market.
FanDuel already holds the title of Official Sports Betting Partner of MLB in a co-exclusive arrangement. But the addition of prediction markets to the sponsorship mix is cutting into the value of those existing deals.
The NHL has partnerships with both Polymarket and Kalshi. Polymarket also holds deals with MLS and UFC.
Sportsbooks Scramble to Expand Their Rights
Sportsbook operators are now going back to their league and team partners to try to broaden their category definitions. The goal is to prevent prediction market platforms from encroaching further on their territory.
Eric Foote, founder and CEO of VIG Partners, confirmed that this is happening in real time. VIG Partners is a consultancy involved in these types of negotiations.
“The legal sports betting operators are going back to their teams specifically and/or league deals and trying to expand their category definition,” Foote told Gambling Insider.
He said this expansion of rights typically comes with an additional payment. The size of that payment depends on the league or partner involved.
“These groups are working very hard right now to defend their turf,” Foote said.
The NFL sports betting sponsorship category is now open for the first time since 2021. FanDuel and DraftKings reportedly balked at increased asking prices to continue receiving official league data from Genius, which is a prerequisite for a deal with the NFL.
Sports Business Journal reported the development this week. It seems likely the NFL and NBA will eventually land their own prediction market partners.
Team-Level Deals on the Horizon
The broader sports betting sponsorship market has shifted. With sportsbook operators already established in legal states and expansion slowing, teams are finding it harder to fill their betting partner slots.
Foote described it as a buyer’s market. He said teams that once had two or three partners paying multi-million-dollar deals are now down to one or none.
“They’re scratching and clawing to take anything they can,” he said.
The prediction market category is still in its early stages at the team level. For now, teams appear limited to working only with the prediction market partner their league has chosen.
Foote said he expects the full category to open up for teams soon. Once leagues finalize their own deals, teams will follow.
At the heart of these partnerships is money. Foote said leagues framing their prediction market deals around integrity is genuine, but the real driver is financial.
“Let’s be honest, it’s ‘what’s the size of the check?’ and these are meaningful deals,” Foote said.
Sportsbooks that want to block prediction markets from their category will need to invest more. Some teams are staying loyal to their longtime sports betting partners and allowing them to expand their category in exchange for additional payments.
Foote said that as long as teams receive some influx of cash for the category, they are generally satisfied with the arrangement. The NFL’s open betting category remains unfilled as of this week.
