Key Takeaways
Contents
- Polymarket secured a three-year sponsorship with MLB valued between $150-300 million
- Traditional sports betting operators like FanDuel and DraftKings are paying premiums to expand category protections against prediction market competitors
- Following FanDuel and DraftKings’ departure over elevated data fees, the NFL’s sports betting sponsorship category remains available for the first time in three years
- The sports betting sponsorship landscape has transformed into a buyer’s market, leaving franchises competing to secure partners
- Team-level prediction market partnerships are anticipated to emerge after leagues complete their own agreements
A fierce competition is emerging between established sportsbooks and prediction market platforms for lucrative sports sponsorship opportunities.
Last month, MLB joined other major sports organizations in embracing prediction markets. The league finalized a sponsorship partnership with Polymarket valued at somewhere between $150 million and $300 million across three years.
The partnership included a complementary integrity-focused arrangement with the CFTC. This agreement granted Polymarket the designation of MLB’s Official Prediction Market.
FanDuel currently maintains its position as MLB’s Official Sports Betting Partner through a co-exclusive partnership. However, the emergence of prediction markets in the sponsorship ecosystem is diminishing the worth of these pre-existing agreements.
Beyond MLB, the NHL has formed partnerships with both Polymarket and Kalshi. Polymarket has additionally secured agreements with MLS and UFC.
Sports Betting Operators Rush to Protect Their Territory
Sportsbook companies are actively renegotiating with their league and team partners to widen their category exclusivity. Their objective is to block prediction market platforms from capturing additional sponsorship space.
Eric Foote, founder and CEO of VIG Partners, verified that these negotiations are actively underway. VIG Partners serves as a consultancy firm engaged in these sponsorship discussions.
“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.
According to Foote, expanding these rights usually requires an additional financial commitment. The amount varies based on the specific league or partner organization.
“These groups are working very hard right now to defend their turf,” Foote said.
For the first time since 2021, the NFL’s sports betting sponsorship category has become available. Both FanDuel and DraftKings allegedly rejected elevated pricing to maintain access to official league data from Genius, which is mandatory for NFL partnership agreements.
Sports Business Journal reported on this development earlier this week. The NFL and NBA are both expected to eventually secure their own prediction market partnerships.
Franchise-Level Partnerships Expected Soon
The sports betting sponsorship market has undergone a significant transformation. As sportsbook operators have already penetrated legal markets and geographic expansion has decelerated, franchises are experiencing difficulty securing betting partners.
Foote characterized the current environment as a buyer’s market. Teams that previously maintained relationships with two or three partners generating multi-million-dollar revenue are now reduced to one sponsor or sometimes none.
“They’re scratching and clawing to take anything they can,” he said.
Prediction market sponsorships at the team level remain underdeveloped. Currently, franchises seem restricted to partnering exclusively with whichever prediction market platform their league has selected.
Foote anticipates the complete category will become accessible to teams in the near future. This will occur once leagues have completed their own partnership agreements.
Ultimately, these partnerships are financially motivated. While Foote acknowledged that leagues’ emphasis on integrity surrounding prediction market deals is authentic, the primary motivation is economic.
“Let’s be honest, it’s ‘what’s the size of the check?’ and these are meaningful deals,” Foote said.
Sportsbooks seeking to prevent prediction markets from entering their category must increase their financial commitments. Several teams are maintaining loyalty to their established sports betting partners and permitting category expansion in return for supplementary payments.
According to Foote, teams are generally content with these arrangements as long as they receive additional revenue for the category. As of this week, the NFL’s vacant betting category remains without a sponsor.
