Prediction markets are taking a growing share of US sports betting handle, and that shift is prompting regulated sportsbook operators to plan for sharply higher marketing costs. Fanatics CEO Michael Rubin told CNBC earlier this week that total sportsbook marketing spending could reach $7 billion in 2027, more than double the 2025 level, according to a Casino.org report published on 16 October 2026. Separate data discussed by iGaming Business show prediction markets have risen from about 5% to 15% of combined handle in regulated states over six months, while NFL sportsbook handle has stayed broadly flat. That flattening, alongside prediction market growth, helps explain why operator marketing budgets may need to rise.
$7 billion marketing forecast
Rubin said the $7 billion figure applies to 'the overall marketing space' for sportsbook operators, and he described the environment as 'couldn’t be any more competitive' as he named major prediction market operators. He also said privately held Fanatics could spend as much as $1 billion next year on betting and gaming advertising, nearly triple the $350 million the company will spend this year, according to Casino.org. The broader projection implies industry marketing outlay would more than double from 2025.
Prediction markets and flat NFL handle
Ed Birkin shared H2's unreleased prediction market data on the iGaming Business podcast. The data indicate NFL sportsbook handle is roughly flat for the year, up 0.4% in reporting states and down 1% once Florida is included. That flat result is the net of roughly 4% organic growth and a 4% to 5% headwind from prediction markets, according to the episode. Prediction markets’ share of combined handle in regulated states jumped from around 5% six months ago to about 15%. Aggressive spending around the World Cup and through August drove much of that rise, the podcast said. The podcast hinted that the state feeling the biggest headwind has a warmer climate but did not name it in the episode.
Fanatics' advantages and consolidation outlook
Rubin listed five well-capitalised competitors in sports betting: DraftKings, Flutter Entertainment’s FanDuel, Fanatics, and the top two prediction market operators. He said he was 'not sure' what level of consolidation might occur among those five over the next several years, describing the industry as 'super-competitive' and likely to see tussles. Fanatics’ private status and its sports apparel and collectibles businesses are advantages, Casino.org reported. Those units could generate more than $12.5 billion combined this year, and profits can be funnelled to betting and gaming. Rubin acknowledged that industry observers are negative, saying 'it will not be a fun next couple of years', but he said his five- to 10-year outlook is brighter than the current environment suggests.
Legal uncertainty around prediction markets
The iGaming Business podcast also discussed the legal fight over prediction markets. Many expect the dispute between states and the CFTC to reach the Supreme Court around 2027 to 2028, according to the episode. Events are already moving: the NFL has filed an amicus brief urging the Supreme Court to review Flaherty vs KalshiEx, LLC, as reported by Matt Rybaltowski. This legal backdrop adds uncertainty for operators expecting prediction market competition to persist.
