Genius Sports CEO: We Get Paid Whatever Regulators Decide
Genius Sports gets paid no matter how prediction market regulation shakes out in the US. That was CEO Mark Locke's message to investors, and he wasn't softening it.
The logic he laid out is pretty straightforward. Wagering volume is what drives demand for Genius products, and the legal wrapper around that volume doesn't change much. "Increases in wagering volumes support the demand for Genius products, irrespective of the form that wagering takes," Locke told investors.
The company, headquartered in London and listed on the NYSE, has already made its moves. Deals are in place with Kalshi and Polymarket, the two names leading the prediction market space, to supply official sports data plus marketing, media and integrity services. Locke described the sector's growth as "all very net positive for us."
US pressure on prediction markets keeps building. His confidence hasn't moved. Locke figures the rules will change, and he's comfortable with that. "The prediction markets of today are very unlikely to look like the prediction markets of tomorrow," he said. Access rules will shift. So will tax treatment and product definitions, and some of today's advantages will go with them.
The money, in his view, stays. Liquidity gets captured, taxed and regulated under one regime or another, federal, state, or both at once. That's already happening. North Carolina taxes exchanges' net trading-fee revenue. Illinois tacked on a transaction levy. Over at the CFTC, a framework is being drafted. Locke expects the full process to drag on for years.
Through all of it, Genius's positioning is deliberate. The company supplies the exchanges, the market makers behind them, and the sportsbooks fighting those same exchanges for the same customer. DraftKings and FanDuel are his proof the model works: bitter rivals, both buying from Genius. Regulators' settlement standards, he expects, will only push the value of official data higher.
Regulation itself remains a mess. In the US, the CFTC is battling state regulators and, to an extent, the licensed gambling industry. Gibraltar became the first jurisdiction with a regime built specifically for prediction markets. France, Germany, Italy, Ukraine and Portugal are among the national regulators still holding back. Locke draws a line between appetite and platforms. "Demand can endure while access narrows, activity falls or customers move between products," he said.
It hasn't been a smooth run for Genius. The stock trades almost 70% below its 2021 IPO price, and February's $1.2bn acquisition of Legend pushed it down further. Locke co-founded the company 25 years ago. He isn't rattled. "The route decides who pays us," he said. "The demand decides that we are paid." His closing line to investors: Americans will keep betting on sports, and Genius gets paid however they do it.