Prediction Markets Are Splitting the Gambling Supply Chain

Kevin Jones
1 hour ago
15 min read

Sportradar and Genius Sports have committed. Kambi has held back. Evolution sits outside the question. A primary-source reading of why each posture is rational, and which one wins.

What this analysis covers

The major listed B2B gambling suppliers have already made commercial decisions on prediction markets, before US regulation is settled. Sportradar and Genius Sports have leaned in. Kambi has identified the opportunity but is holding back, citing licence-risk exposure. Evolution sits outside the question entirely.

This Gaming Eminence analysis maps each supplier's posture to operator strategy (DraftKings, Flutter, MGM Resorts, Entain), explains what is being commercially repriced, and identifies the regulatory triggers that will determine which posture is rewarded. It draws on Q1 2026 disclosures from Sportradar (28 April 2026) and Kambi (29 April 2026). Genius Sports' Q1 2026 results are due 7 May 2026, after publication.

The three-posture framework is Gaming Eminence's analytical reading of public disclosures, not terminology used by the named companies.

Prediction markets will not clarify before the decisions are made. The decisions are the clarification.

The real issue is no longer whether prediction markets are gambling or finance in the abstract. It is which supplier economics survive if probability, liquidity, clearing, integrity, and market distribution begin to move outside the traditional sportsbook stack — and which suppliers have positioned themselves to capture the parts of the new value chain that remain in their commercial reach.

The three supplier postures

Sportradar and Genius Sports — committed. Both have publicly framed prediction markets as a customer category and committed commercial resources ahead of regulatory clarity. Sportradar's 2026 guidance now reflects more contribution from prediction markets than at Q4 2025.
Kambi — option identified, not exercised. CEO has named the asset pool and commercial structure. Entry is held back by US regulatory warnings that supplying CFTC-regulated venues from the company's licensed B2B base would put state licences at serious risk.
Evolution — control case. No engagement with the question. The casino-led business model is not yet directly exposed to the prediction markets repricing.

Supplier	Current posture	Commercial logic	Main risk
Sportradar	Committed; "intense talks" with named PM counterparties; PM contribution reflected in 2026 guidance	Capture data, integrity, fan-engagement, and acquisition revenue from PM venues; defend incumbent league relationships including MLB exclusive distribution	PM revenue under-delivers vs guidance; Vergence AI displaces incumbent integrity services; unresolved short-seller allegations
Genius Sports	Committed; "In Every Scenario, Genius Wins" investor day modelling; Legend acquisition extends model into customer acquisition	Capture data and acquisition revenue; assumes PM share remains low single digit and CLV roughly 15% of OSB	PM share grows materially above modelled assumptions; NFL prediction-markets posture moves against Genius's exclusive data position
Kambi	Option identified; entry held back by US regulatory warnings	Preserve 60+ jurisdiction licence portfolio; allow regulatory and Supreme Court resolution to lower the cost of any future entry	If MGM/Entain read is wrong, Kambi enters late on worse terms; competitors with different licence portfolios may face a meaningfully different version of the same question
Evolution	No engagement	Casino, RNG, and live content not directly exposed to PM repricing	PM expansion into casino-style event contracts; convergence of live casino formats with event-contract mechanics

Sportradar and Genius Sports: committed ahead of clarity

Sportradar's commercial integration into prediction markets is no longer hypothetical. On 19 March 2026, Major League Baseball announced an exclusive partnership with Polymarket, naming the platform its Official Prediction Market Exchange. The press release confirmed that Polymarket will access "Official League Data from Sportradar, MLB's exclusive global distributor of data for prediction markets."

That distinction matters more than the partnership itself. MLB is the first major US sports league to formally route prediction market data through an incumbent gambling supplier rather than a financial data counterparty. The structural choice creates a procurement reference point. The NFL, NBA, and PGA Tour will each face the same decision when negotiating their own prediction market arrangements over the next twelve to eighteen months. Whether they default to Sportradar's MLB template or build through CME Group, ICE, or another financial data partner determines whether the gambling supply chain or the financial supply chain captures the long-term integrity and data revenue from US prediction markets.

On Sportradar's Q4 2025 earnings call, Carsten Koerl said the company could "power this market end to end with our low latency official data, AI driven technology to predict pricing and liquidity, fan engagement solutions, marketing services, and our industry leading integrity services." He sized the opportunity at "tens of millions, not hundreds of millions" — additive rather than transformative for a company whose 2025 full-year revenue reached €1,290 million.

On 28 April 2026, Sportradar's Q1 2026 results sharpened the posture further. Asked about prediction markets, Koerl told analysts the company has received "the green light from NHL, UFC, MLS and MLB that we can start the marketing here, and we created services for this." He segmented the customer model: exchanges and market makers (Jump Trading, Susquehanna) buy ultra-low-latency data and prediction models; futures commission merchants (Robinhood, FanDuel Predicts) buy customer acquisition tools; designated contract markets (Kalshi, Crypto.com, Polymarket US) buy across the stack. Koerl said Sportradar is "speaking with all the players" and that "an announcement could come soon." CFO Craig Felenstein confirmed that 2026 guidance "now reflects more contribution from prediction markets than when the company spoke after its fourth-quarter results," with revenue expected "predominantly back half of the year."

The Q1 2026 release also addressed two short-seller reports published on 22 April 2026 by Muddy Waters Research and Callisto Research, alleging Sportradar has commercial ties to illegal gambling operators in unregulated markets. Sportradar's stock fell approximately 30% on publication. Koerl rejected the allegations as "unfounded and misinformed," disclosing that "mid-to-low single digit percentage" of revenue comes from grey markets and "no money at all" from black markets. Sportradar filed a Form 6-K with the SEC outlining its compliance and KYC framework, stating it "will not tolerate efforts to manipulate its securities and it takes very seriously its obligations to stockholders." The allegations have not been substantiated by any regulatory authority as of publication and remain unresolved. The dispute does not affect the prediction markets thesis directly, but it introduces a separate vendor-risk variable for procurement teams evaluating multi-year contracts.

Genius Sports made the same prediction markets bet through a more analytically explicit route. At its December 2025 investor day, Mark Locke presented a slide titled "In Every Scenario, Genius Wins." Across four regulatory outcomes — prolonged uncertainty, fragmentation, federal clarity, and accelerated online sports betting regulation — Genius Sports modelled its commercial exposure and concluded the company benefits under all of them. A preceding slide mapped Kalshi, Polymarket, Railbird, and DraftKings Predict as future Genius data customers "where regulated." Slide 73 assumed prediction markets would capture only low single-digit share in mature regions, with customer lifetime values roughly 15% of those seen in traditional online sports betting. The Legend acquisition, announced in 2026, extended the model into customer acquisition.

Genius Sports' Q1 2026 results are scheduled for 7 May 2026, after publication of this analysis. Whether Locke's commentary on the call confirms the modelled pipeline has materialised commercially is the next test of the leaner thesis.

Vergence AI: integrity services is no longer captive

The most consequential development for incumbent integrity providers is also the least covered. On 10 March 2026, Polymarket announced a partnership with Palantir Technologies and TWG AI to build a sports integrity platform powered by the Vergence AI engine, a Palantir/TWG AI joint venture product created in 2025. The architecture is built on a financial-surveillance methodology distinct from the gambling-trade surveillance methodology used by incumbent providers.

Until 2025, Sportradar Integrity Services and Genius Sports's IDS division dominated procurement of integrity services for major sports leagues and operators. The Vergence AI selection is the first public-record signal that prediction market venues will procure surveillance from outside the gambling supply chain. Integrity services contracts coming up for renewal in 2026-2028 are no longer single-source decisions. Buyers will benchmark against the Vergence AI architecture even where they ultimately retain incumbent suppliers. Pricing power for incumbents drops; margin pressure follows. For Sportradar and Genius Sports, the integrity-services contract renewal cycle through 2028 is the procurement test of whether the incumbent advantage holds at scale.

What is being repriced

The commercial story behind these decisions is not "prediction markets are coming." It is that prediction markets shift value away from parts of the supplier stack that have driven sportsbook supplier economics since PASPA fell in 2018, and toward parts that some incumbents own and some do not.

Value moves away from sportsbook hold optimisation, traditional trading desks, state-by-state sportsbook approval processes, and operator-controlled margin structures. It moves toward official data and low-latency feeds, liquidity provision, clearing and exchange infrastructure, integrity surveillance, identity and KYC, customer acquisition tools, front-end distribution, and regulatory architecture sophisticated enough to operate across CFTC and state-licensed venues simultaneously.

Sportradar and Genius Sports are not necessarily "winning prediction markets" broadly. They are positioning to capture the slice of prediction-market economics that still requires sports data, integrity surveillance, fan engagement, and acquisition infrastructure. The exchange infrastructure, the clearing, the liquidity provision, and the institutional distribution are being built by financial-market firms, not by gambling suppliers — a point the parallel supply chain section returns to.

Kambi's restraint is not passivity. It is a risk-adjusted posture for a licensed B2B sportsbook supplier with state licence exposure across 20+ US jurisdictions and a customer base that depends on those licences remaining intact.

Kambi: the option identified, not exercised

On Kambi's Q3 2025 earnings call, a webcast viewer asked whether Kambi could become a market maker or supply data to Polymarket. Werner Becher's response has been read across the industry as a watching brief. It was more specific than that.

"We are in a similar position to all the betting and casino operators in the U.S. being licensed in 60-plus jurisdictions globally and more than 20 jurisdictions in the U.S.," Becher said. "We have a lot to lose. So we have to be very careful, and we will never risk our existing licenses."

Then the specifics:

"With our EUR 17 billion liquidity and the precision of our odds, I think we could be a great partner for the prediction markets to help them with some market making, but we'll only do it if we feel it's legal and it's safe for us." Werner Becher, CEO, Kambi Group, Q3 2025 earnings call

Becher named the asset pool. He named the commercial structure. He named the conditions for activation. He acknowledged that Kalshi and Polymarket had "definitely" established a first-mover advantage in California and Texas, where licensed sports betting remains illegal. No other listed gambling supplier has been this explicit about prediction markets on the record.

Across the two subsequent earnings cycles, Kambi has hardened the posture. After publishing FY 2025 results in February 2026, Becher told NEXT.io that the company had received "very clear letters from some US regulators stating that if we, as a B2B supplier, stepped into prediction markets, we would immediately lose our licence." On the Q4 2025 earnings call, Becher's framing softened to "very clear regulatory statements that if we go into it, there is a very high risk of losing licenses" — the formulation Gaming Eminence carries forward in this analysis. He also noted that "going into prediction markets" had not benefited the share prices of operators that had entered.

In its Q1 2026 results published on 29 April 2026, Kambi reported revenue growth of 5% to €43.5 million, adjusted EBITA expansion of 64% to €5.7 million, and a stock-price gain of approximately 24% on the day. Growth was driven by new Canadian lottery contracts with Atlantic Lottery Corporation and British Columbia Lottery Corporation (giving Kambi presence in eight of Canada's ten provinces), a long-term sportsbook partnership with PMU in France, and AI-driven trading reaching 60% of network bets through the Tzeract engine. Prediction markets were referenced only as a sector-level competitive backdrop.

The company's growth trajectory has visibly diverged from the prediction markets question. Kambi is not waiting for the courts. It is building a 2026-2027 commercial book on Canadian lotteries, French regulated entry, AI-driven margin gains, and modular Odds Feed+ partnerships with operators including Hard Rock Bet, ComeOn, and LeoVegas.

The licence constraint is documented, not inferred. State enforcement has escalated alongside the supplier warnings. On 17 March 2026, Arizona Attorney General Kris Mayes filed criminal charges against Kalshi — a 20-count criminal information including four counts of election wagering and 16 counts of unlawful betting.

For Kambi, the question is no longer whether to enter prediction markets in the next 12 to 24 months. It is whether the company's regulatory posture is the template other regulated B2B sportsbook suppliers should follow, or an outlier that competitors with different state licence portfolios — OpenBet, Stats Perform, Metric Gaming, BetConstruct — may face on a meaningfully different basis.

Evolution: the control case

Evolution AB does not appear in prediction markets coverage. Its 2025 annual report outlines a roadmap built around new traditional casino game releases, a partnership with Hasbro for branded IP integration, and continued expansion of its Live Casino and RNG verticals. Prediction markets, event contracts, Kalshi, Polymarket, and CFTC regulation do not appear in the document, in the Q4 2025 earnings call, or in any 2025-2026 investor presentation.

This is structurally logical, not negligent. Evolution supplies live dealer casino games, slot content, and RNG products to licensed B2C operators. It does not supply sportsbook data. It does not provide trading or odds infrastructure. It does not hold betting licences as a sportsbook operator. Prediction markets, whose commercial relevance depends on event outcomes that resolve against official data feeds, sit categorically outside Evolution's product scope.

The analytical signal is the structural one. Casino content and live dealer verticals are not yet being directly repriced by prediction markets. The data, integrity, platform, and liquidity stacks are. The 2027 regulatory outcome will not move Evolution's business model the way it will move Kambi's or Sportradar's.

The question only reopens if prediction markets expand meaningfully into casino-style event contracts, or if live-event casino formats begin to converge with event-contract mechanics. Neither has happened on the public record. Evolution is the control case for what an uncontested supply chain looks like.

The operator split

Which supplier posture is rewarded depends less on what the suppliers have decided than on which operator read of the category turns out to be commercially correct.

BetMGM is a joint venture between MGM Resorts and Entain. The MGM Resorts and Entain commentary below reflects the perspectives of both parent companies on the same B2C operator.

DraftKings has converted its prediction markets ambition into a disclosed operating roadmap. At its 2 March 2026 Investor Day, the company set out a vendor-displacement timeline: in-house market making, an in-house designated contract market through the Railbird integration, in-house Futures Commission Merchant and Derivatives Clearing Organization capabilities, and a super-app consolidation that markets Predictions through the same customer relationship as the licensed sportsbook. DraftKings disclosed Predictions is expected "to have a 10% to 30% higher Adjusted Gross Margin than DraftKings Sportsbook," with illustrative long-term margins of 60% to 80% versus 50%+ for Sportsbook. CEO Jason Robins called it, on the Q4 2025 earnings call, "the most exciting new growth opportunity we have seen since PASPA struck down in 2018."

Flutter has hedged. On its Q4 2025 earnings call, Peter Jackson confirmed FanDuel Predicts launched in Q4 2025, framed as a non-OSB-state product to reach "the 40% of the U.S. population who cannot currently access online regulated sportsbooks." Jackson said the company found "no evidence of material cannibalization" on the existing business. FanDuel Predicts is structured to sit alongside the licensed sportsbook, not replace it.

MGM Resorts and Entain have remained sceptical. On MGM's Q3 2025 call, Bill Hornbuckle defended state-level gaming regulation directly: "This is not the time to back away from these high standards."

"It's sports betting. Full stop." Bill Hornbuckle, CEO, MGM Resorts, addressing the Nevada Gaming Commission, November 2025

Entain's FY 2025 results, published on 5 March 2026, framed BetMGM's position more sharply: "without the distraction of launching and competing in the highly competitive and unregulated Prediction Markets space, BetMGM has its own clear roadmap for growth." BetMGM achieved $607 million in net revenue contribution and $220 million in EBITDA in 2025, with $270 million of cash distributed to its joint venture parents (split between MGM Resorts and Entain).

[WIX MODULE: Operator reward map]

Operator read	Supplier position rewarded	Supplier position exposed
DraftKings vertical build: $10bn category, 60-80% Predictions margins	Sportradar, Genius Sports	Kambi enters late on worse terms
Flutter hedge: non-OSB-state product, no material cannibalisation	Suppliers capture less than modelled	Kambi caution validated
MGM/Entain scepticism: regulatory retrenchment	Kambi non-commitment vindicated	Sportradar, Genius Sports over-committed

Evolution remains insulated under all three reads.

Kambi's commentary across Q4 2025 and Q1 2026 has moved closer to the MGM/Entain reading. The scenario in which Kambi's non-commitment is vindicated is now the company's stated working assumption rather than a hedged outcome.

The regulatory clock

Four regulatory triggers determine which operator read is correct, and therefore which supplier posture is rewarded.

KalshiEx LLC v. Flaherty. On 6 April 2026, the Third Circuit affirmed a preliminary injunction in Kalshi's favour, finding that Kalshi had shown a reasonable likelihood of success on its argument that the Commodity Exchange Act preempts New Jersey's gambling-law enforcement against its CFTC-regulated sports event contracts. The 2-1 decision is favourable for prediction markets but is a preliminary injunction, not a final merits determination, and is limited to the Third Circuit until tested at the Supreme Court.

The CFTC's regulatory review. The agency has issued an Advance Notice of Proposed Rulemaking on prediction markets and, on 2 April 2026, filed lawsuits against the governors of Arizona, Connecticut, and Illinois seeking declaratory and injunctive relief against state enforcement of gambling laws on CFTC-regulated contracts. The CFTC has subsequently filed parallel suits against New York and Wisconsin.

California or Texas online sports betting legalisation. Both states sit outside the licensed market, and DraftKings has told analysts that prediction market players concentrate there. Legalisation in either state during the 2026-2027 legislative window reduces the prediction markets commercial case in their most important markets and gives Kambi direct access through existing regulated partnerships.

Supreme Court resolution of federal-state preemption. With the Third Circuit ruling for preemption, the Ninth Circuit declining to block Nevada's enforcement, and federal district courts in Maryland, Ohio, and Tennessee reaching divergent conclusions, a circuit split is forming. Resolution is unlikely before mid-2027 at the earliest.

The compounding effect matters more than any single trigger. The suppliers and operators above are making commercial decisions with multi-year commitments under regulatory uncertainty that will persist for the entirety of the decision-relevant horizon.

A more detailed regulatory analysis, covering the CFTC's offensive posture, the parallel tribal IGRA litigation, and the state criminal escalation pattern, will follow as a separate Gaming Eminence piece.

The parallel supply chain

The institutional architecture forming around prediction markets is not part of the traditional B2B gambling industry. The suppliers who built the infrastructure US sports wagering has run on since 2018 are positioning around prediction markets. They are not building them.

Four institutional actors made public commitments in late 2025 and Q1 2026: Intercontinental Exchange announced a strategic investment of up to $2 billion in Polymarket in October 2025 at approximately an $8 billion pre-investment valuation, becoming a global distributor of Polymarket's event-driven data; Tradeweb announced a strategic partnership with Kalshi in February 2026, including a minority equity investment, integrating Kalshi's event probabilities into Tradeweb's rates and credit marketplaces; Bloomberg and Finance Magnates reporting in February 2026 indicated Jump Trading had taken minority equity stakes in both Kalshi and Polymarket, with the Polymarket stake structured to scale with liquidity contribution; and CME Group provided the exchange infrastructure on which DraftKings Predictions launched.

The implication is that prediction markets, even if they scale to the $10 billion category DraftKings has named, do not route through the same supply chain that captures value from licensed sportsbooks. Sportradar and Genius Sports retain the data and integrity revenue if their commercial thesis holds. The clearing revenue, the institutional distribution revenue, the liquidity provision revenue, and the prime brokerage revenue flow instead to a parallel set of firms whose commercial origin is not in gambling.

For procurement teams evaluating multi-year B2B contracts in 2026 and 2027, the parallel supply chain is the variable that changes most. Each supplier posture will be repriced on a different timeline.

A dedicated Gaming Eminence analysis of the financial-market supply chain forming around US prediction markets — covering ICE, Tradeweb, CME, Jump Trading, and Palantir/TWG AI — will follow as a separate piece.

What to watch

Five events that will reprice the framework

The Genius Sports Q1 2026 earnings call on 7 May 2026. First quarterly read on whether the December 2025 investor day modelling has converted into commercial pipeline. The NFL's posture on prediction markets is the variable to watch, given Genius Sports' exclusive NFL data position.
A Sportradar prediction markets partnership announcement. Koerl said on 28 April 2026 that "an announcement could come soon" with named counterparties. The first announced agreement validates or partially deflates the prediction markets contribution built into Sportradar's 2026 guidance.
Resolution of the Muddy Waters and Callisto Research short-seller allegations against Sportradar. The dispute is procedurally distinct from the prediction markets thesis but introduces a separate vendor-risk variable for procurement teams to monitor.
Supreme Court action on federal preemption. With a circuit split forming, the path to certiorari is shorter than it was six months ago. A merits decision is unlikely before mid-2027 at the earliest, but the grant or denial of certiorari reprices every commercial position above.
California or Texas online sports betting legalisation. Legislative progress in either state during the 2026-2027 window materially reduces the prediction markets commercial case in their most important markets and validates Kambi's restraint.

Prediction markets are not just a new betting-adjacent product. They are testing which parts of the gambling supplier stack remain valuable when probability is priced by exchanges, liquidity is provided by proprietary trading firms, clearing runs through financial-market infrastructure, and integrity surveillance is built on financial-services surveillance methodology rather than gambling-trade methodology. Sportradar and Genius Sports are defending the slice of prediction markets that still routes through their existing economics. Kambi has been told, in writing, that supplying that slice from its current licensed base would put state licences at serious risk. Evolution sits outside the question because the casino-led stack is not yet being directly repriced.

Eight to twelve large licensed US operators outside the named four — Bet365, Hard Rock, Caesars, BetRivers, ESPN Bet, Penn, and others — have not yet committed publicly to a vertical build, hedge, or opt-out posture. Each will have to choose. The choice cannot be deferred indefinitely without forfeiting first-mover commercial terms with the leaners.

Prediction markets will not clarify before suppliers have to act. The supplier decisions now being made are the clarification.

Prepared by Gaming Eminence based on public earnings call transcripts, investor day presentations, court records, regulatory filings, and corporate press releases. The three-posture framework is Gaming Eminence's analytical reading of public disclosures, not terminology used by any of the named companies. Quotations are verbatim from primary sources cited inline. The analysis incorporates Q1 2026 disclosures from Sportradar (28 April 2026) and Kambi (29 April 2026). Genius Sports' Q1 2026 results are scheduled for 7 May 2026 and will be addressed in subsequent Gaming Eminence coverage.