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DraftKings CEO Jason Robins says prediction markets should not be framed to customers as simple peer-to-peer products, arguing they function more like “peer-to-Wall Street” markets where professional traders often have the advantage.
Speaking as DraftKings discussed its latest results, Robins said sophisticated users with models tend to beat retail customers in peer-to-peer marketplaces. He said that does not make the products inherently problematic, but companies should be clear about how they work so customers do not feel misled.
Robins says professional traders dominate prediction market activity
Robins said prediction markets are often described as peer-to-peer, but in practice look more like markets shaped by professional bettors, market makers, and institutional participants.
DraftKings said Thursday that an estimated 80% to 90% of volume on its prediction platform in states with legal sports betting came from professional betting syndicated and institutional traders. Robins added that he would not be surprised if the real figure were above 90%.
He also criticized rivals for offering rebates or similar incentives to market makers to encourage liquidity. A DraftKings spokesman told Sportico that DraftKings does have some rebate structures in its market-maker program, but said no participant has yet hit the threshold to receive them.
Why the comments matter in California
Robins said the picture looks different in states without online sports betting, including California and Texas. That makes his comments notable for California readers, where prediction markets have drawn attention partly because the state does not offer legal online sportsbooks.
The core takeaway for players is not that prediction markets are the same as sportsbook betting. Robins’ point was that these products may involve a trading environment where experienced participants have a structural edge over casual users. His comments also suggest operators may face more pressure to explain who is on the other side of these markets and how liquidity is created.
DraftKings operates a legal sportsbook in more than half of U.S. states. Its shares rose about 5% in Friday morning trading after the company maintained its full-year revenue and adjusted EBITDA guidance, even though it missed analyst estimates on both earnings and revenue.
For California readers, the main thing to watch is how operators continue to describe prediction markets in states that still do not have online sports betting. As always, if you choose to use any gambling or event-trading product, understand how it works and play responsibly.
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Source: As reported by Grace Hughes.
