UFC is adding Polymarket to its list of official partners, in a first-of-its-kind-deal that could send seismic waves throughout the entire pro sports industry.
For those not familiar with Polymarket, they are among the operators who offer event-based contracts. These transactions are otherwise referred to as prediction markets. They effectively allow users to invest in yes-or-no outcomes on certain events. While these markets previously focused on political elections and entertainment developments, they have expanded their presence in sports over the past few years.
This move comes at a time when sports betting in the United States is both more accessible than ever and facing an inflection point. Despite prediction-market operators maintaining there is no overlap, event-based outcomes are competition for gambling operators. To that end, it will be interesting to see how the best betting sites for UFC feel about this partnership—and how they ultimately react to it.
The UFC May Take Prediction-Markets Mainstream
While prediction markets are more commonly discussed nowadays, they are not what you’d call mainstream. Event-based contracts are closer to niche interests.
This is in part because so many states already have legal sports betting that people aren’t as inclined to invest in prediction markets. If you live in New York, where online sports betting is legal, you don’t have as big of a need for event-based contracts, unless you are just looking to diversify the number of platforms you use. If you live in Texas, on the other hand, prediction markets serve as a viable workaround to sports gaming laws that currently prohibit betting.
Companies who provide prediction markets recognize this challenge. How do they disrupt the share of sports betting business in states that have allowed sites like Caesars, FanDuel and DraftKings to establish a foothold?
This partnership with the UFC is both a nod to the dilemma, and a potential solution. Polymarket is just getting ready to enter the United States, and it will now have its branding plastered across all major UFC broadcasts. As Shwetha Surendran of ESPN writes:
“Polymarket is currently available globally, and is expected to officially launch in the U.S. in the coming months. The UFC will integrate Polymarket’s prediction market odds into live broadcasts and will show market activity during fights in a ‘fan prediction scoreboard.’
“Ari Emanuel, CEO of UFC’s parent company, TKO, said in a news release that the Polymarket partnership will allow fans to interact with fights in real time. ‘By partnering with Shayne and his team at Polymarket, we’re unlocking a new dimension of fan engagement,’ he said. ‘What’s exciting about our approach is that you can actually buy and sell, you can trade, just like a stock throughout the fight,’ Polymarket founder and CEO Shayne Coplan said in an interview with CNBC. ‘And I think that that’ll create new user behavior and open up a new way to engage where you can buy and sell and buy and sell as the fight swings, the momentum swings.’”
Many will dismiss this as typical public relations-speak. It’s not. The engagement element is huge. It is what has driven so much sports betting action online for other sports.
Consider the NFL broadcasts on Amazon Prime. Also consider NBA game broadcasts inside their own app. Viewers can see live lines displayed on their screen, and then they can actively click on them to visit sportsbooks and place wagers.
UFC seems to be headed down the same path, but with Polymarket.
Expect Other Sports to Follow UFC’s Lead…and for Sportsbooks to Push Back
UFC and the NHL are now the only two sports that have struck deals with operators exclusively providing prediction markets. Don’t be surprised if and when other leagues follow suit.
Indeed, they could run into conflicts of interests. The NFL, for instance, has an official partnership with four sportsbooks. They will all have something to say if the league tries to strike a deal with Polymarket, Kalshi or another prediction-market operator.
Then again, some sportsbooks are sensing a trend and starting to tap into prediction markets themselves. This includes industry heavyweights like DraftKings and FanDuel. At a time when these companies want to continue their upward growth, they recognize that the legality of prediction markets across all 50 states gives them a chance to tap into a currently untapped demographic of customers.
Still, it remains to be seen whether sports betting and prediction markets can coexist without any friction. So many maintain that prediction markets amount to sports betting. Others believe that, because transactions are classified as trades, they are subject to federal regulation by the trade commission, rather than state oversight.
The UFC’s deal with Polymarket is huge for this exact reason. The company is, ahem, betting on prediction markets continuing to grow in popularity and weathering a legal storm that’s bound to follow suit. A handful of states are already contesting the rollout of prediction markets. Event-based operators have yet to be displaced from these states, but the matter is constantly evolving.
One thing’s for sure, though: Prediction markets are clearly a force that will need to be reckoned with. Signing a deal with the UFC is going to take the industry to a whole other level. And if it ends up paying off for a new entrant like Polymarket, there’s no telling what type of trickle-down effect it’ll have on other live sports, as well as the legal gambling industry, at large.