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- Intelitics CEO Allan Stone warned that prediction markets are now directly competing with sportsbooks for user acquisition, driving up marketing costs and rendering 2026 budgets obsolete.
- Despite citing Kalshi’s massive download numbers during the World Cup, Stone noted that a sharp post-tournament drop in activity means prediction markets still must prove long-term user retention.
Kalshi’s World Cup run showed prediction markets are now pushing sportsbook acquisition costs higher and breaking traditional betting measurement models, according to Intelitics CEO Allan Stone.
In an interview published by European Gaming on Sept. 13, Stone said prediction markets are no longer a niche regulatory story. He argued they are now competing directly with sportsbooks for the same users, media channels, and affiliate placements, forcing operators to rethink both customer acquisition and budgeting.
Stone pointed to Kalshi’s World Cup performance as the clearest example. He said the company, with a much smaller team than major sportsbook operators, generated almost six million app downloads during the tournament and posted trading volume above the handle of most sportsbooks.
“Fifteen people beat companies with a hundred times their headcount,” Stone said.
Stone says prediction markets are changing the cost of player acquisition
A central point in Stone’s interview was that prediction markets are now bidding against sportsbooks for the same customer traffic. That, he said, is raising CPAs and putting more pressure on operator marketing budgets.
He said DraftKings and FanDuel are projecting more than half a billion dollars combined in lost EBITDA this year from building and marketing prediction products. Stone also said affiliates are repricing prediction-market traffic, meaning sportsbooks may have to pay more to hold premium placement.
“If your 2026 budget was built assuming last year’s competitive set, it’s already wrong,” Stone said.
Stone argued the challenge goes beyond media buying. He said sportsbook attribution and CRM systems were built to classify users as sports bettors or casino players, not customers who arrive through event contracts and may behave differently over time.
“Right now, most operators are trying to fit a new animal into an old cage,” Stone said.
He added that the industry still does not have a reliable 12-month lifetime value benchmark for prediction market users, calling early claims “one data point pretending to be a trend line.”
World Cup growth was big, but retention and regulation remain open questions
Stone also said some of the recent growth may have been tied to the World Cup itself. According to the interview, sports activity on both Kalshi and Polymarket dropped sharply after the tournament ended, suggesting the category still has to prove it can retain users between major events.
He said Kalshi’s female user base grew at almost double the rate of its male users during the tournament, with women making up close to a third of traders by late June. Stone contrasted that with sportsbooks, which he said have remained in the low 20s for female user share for years.
On regulation, Stone said the gap between prediction markets and sportsbooks is real, but not the whole story. He estimated the competitive gap is roughly one-third regulatory and two-thirds self-inflicted, arguing that marketing execution explains more of the difference than licensing alone.
“Fix the regulatory gap, and there’s still a marketing problem sitting underneath it,” Stone said.
For operators, the next issue to watch is whether prediction markets can keep users after big tentpole events and whether sportsbooks adjust 2027 budgets, attribution models, and affiliate pricing to reflect that competition.
Source: As reported by europeangaming.eu.
