When the U.S. Men’s National Soccer Team (USMNT) takes the field against Turkey Thursday, it will mark the first time in history that a final World Cup group-play game will make no difference for the United States. With decisive victories against Paraguay and Australia in its first two games, the USMNT has already clinched a spot in the Round of 32. The win against Australia last Friday marked the first time since 1930 that the U.S. won consecutive World Cup games.
Those victories may not be playing well for U.S. sportsbooks, which have high exposure to the American team in the event, but, says Susquehanna analyst Joe Stauff, the U.S. team’s success should have a positive long-term effect. And while that’s good news for the legal gambling industry, it is prediction markets that will see the best result from the World Cup, Stauff wrote in a research note Tuesday.
Prediction markets that offer sports event contracts will be the “outsized beneficiaries” of the event, in large part because 61% of all U.S. and Ontario matches are being played in non-legal gambling jurisdictions, leaving international visitors to use the only legal option available — prediction markets. The platforms are federally regulated, and international consumers, who Stauff wrote make up 50% of World Cup attendees, can’t pass the stringent know-your-customer phase required by state-regulated sportsbooks.
Games are being played across North America, in Canada, Mexico, and the U.S.
Sportsbooks will get less of a bump
The “tailwind” from the World Cup could be as high as 7.5% for prediction markets, vs. up to 5% for traditional sportsbooks. DraftKings Predictions and Rothera — the prediction platform partnership between Susquehanna and financial trading platform Robinhood — will likely be the biggest winners, in Stauff’s opinion.
“We expect new entrants DKNG and Rothera to make the biggest splash considering (1) DKNG’s vertically integrated product sourcing, upgraded “super-app” in early-June, and industry leading promo offering ($5 for $200 bet-n-get vs. $25-to-$50 deposit match offerings elsewhere), and (2) Rothera considering HOOD’s comments that it would route its WC demand to Rothera,” Stauff wrote.
He also noted that Kalshi’s World Cup volume may be “negatively affected” and Robinhood is routing World Cup contracts to Rothera, which launched in late May.
Meta prediction entry may not be all that
In the wake of the news that Meta may be on its way to offering a prediction platform that could compete with DraftKings Predictions, FanDuel Predicts, Kalshi, and Polymarket, Jefferies analyst James Wheatcroft says it’s not time for worry yet. The Meta platform, Arena, is still in the developmental stages, and the plan is to launch as a free-to-play app.
“Licenses would need to be attained before any real money wagering could take place in prediction markets,” Wheatcroft wrote in an equity research note Wednesday. “A prediction market offering not based on real money may have less consumer pull and limited appeal to market makers.”
Wheatcroft went on to point out that “prediction markets [that] offer an inferior consumer product to online sports betting” have not been well received, and that it could takes years for Meta to get its app licensed as a prediction market — or state-approved sportsbook.
