Additional reporting provided by Matt Rybaltowski
In its Q2 earnings call on Monday, Sportradar unpacked its strategic push into the burgeoning US predictions market sector, providing further detail on its recent partnerships with Kalshi and Polymarket.
However, the company cautioned that regulatory ambiguities in the US, alongside slower-than-expected contract closures, would defer substantial financial benefits for the supplier to 2027 and beyond.
Speaking to analysts on the call, CEO Carsten Koerl articulated the significant commercial benefits that could be unlocked through exclusive partnerships with prediction-market operators.
In particular, he said this would increase its target addressable market (TAM) and diversify its traditional sportsbook client portfolio.
“With our premium content, global scale and unmatched product portfolio and capabilities, predictions market is a natural adjacency,” he said.
“It expands the US TAM by opening up new states, attracting new players and increasing engagement with sports,” he added.
Although Koerl and Sportradar CFO Craig Felenstein refrained from providing too many details on its specific deals with Kalshi and Polymarket, Koerl drew parallels to Sportradar’s online sports betting portfolio, adding that the new vertical providing opportunities to work with “key players in the prediction market ecosystem, including exchanges, market makers and brokers”.
Shaking hands with Kalshi
In June, Sportradar announced a multi-year global partnership with Kalshi to provide real-time data for trade settlement, fan engagement, customer acquisition and integrity services across major sports leagues such as MLB, ATP, NHL, MLS and UFC.
The contract featured mixed, fixed and variable commercial components, enabling Sportradar to benefit from potential volume growth.
At the time of the announcement, Koerl said prediction markets represented a compelling growth engine, and Sportradar was “uniquely positioned to shape and power this emerging sector”.
For the three-month period ended 31 May, revenue from the company’s marketing and media services segment increased 16%, driven by strong spending from the prediction market industry. In a research note recapping the call, Citizens analyst Jordan Bender wrote that the trend will likely continue in the latter half of the year, as several well-capitalised companies enter the space during the NHL and NBA seasons.
While Bender noted that the market dynamics can change over the next decade, Citizens still believes that prediction markets will ultimately be a net positive for the company. Consequently, Citizens has increased its EBITDA margin estimate to 25.1% next year, up from 23.7% for fiscal year 2026.
Sportradar also signed a multi-year deal with Polymarket on Monday, providing TDI (Tennis Data Innovations) data to the platform. The partnership grants registered Polymarket users in the US live access to around 20,000 matches each season, including streaming services and exclusive event contracts.
Differentiation from sportsbooks
On the Q2 call, CFO Felenstein did provide some colour when probed by analysts on how the deal terms differed from traditional sportsbooks.
“[The deals we have done thus far] have a fixed fee component and a variable fee component, which allows us to capture the upside as the market expands. And each of these deals will be very different with every exchange, with every market maker, with every broker depending on ultimately what they’re looking to achieve and ultimately, what we’re looking to achieve,” he said.
“We want to make sure that the economics make sense for us and for our prediction market partners, but also for our existing OSB and lead partners. So that all goes into it. We are very much, I would say, locking down diverse deals.
“We’re getting involved with data and odds… fan engagement tools and marketing services. They have a very wide range of revenue opportunities.”
“We are very optimistic that we found the right framework” added Koerl. “Here, latency is key and centre. Deep data is key and centre. That gives new revenue opportunities.
“There’s a myriad of opportunities moving forward with regards to prediction markets.”
Looking to the future
Sportradar highlighted its ultra-low-latency feeds and advanced data capabilities as key differentiators for prediction markets, including ball-tracking data for tennis, reported within milliseconds, and foundational modelling that predicts short-term game states.
“We are excited to partner in what is an emerging fast-growing segment of the sports market and believe this demonstrates Sportradar’s unique value proposition within our industry,” said Koerl.
Following the initial foray into predictions, Koerl hinted that further deals were in the pipeline: “Looking ahead, we continue to have active conversations across the prediction markets ecosystem and anticipate entering into additional commercial deals in the coming months.”
When asked whether Sportradar would consider a market making role, Koerl said the supplier would instead be focusing on supporting those participants through services akin to its Managed Trading Services for sportsbooks.
Predictions markets expected to contribute millions in revenue
Management indicated that revenue from prediction markets in 2026 is expected to reach “tens of millions”, and despite delays in the contracts being signed, there had still been an impact to earnings in Q2.
“SportsContent, Technology & Services delivered revenues of €64 million ($73.9 million), an increase of 9% year-on-year,” said Felenstein, who was appointed to the post in June 2024. Felenstein, who has held senior roles at Shutterstock and Discovery Communications, credited the increase to increased affiliate marketing spending from predictions, as well as a ramp in sportsbook customer acquisition campaigns.
“[Prediction markets] have [had] limited impact in the quarter, but are poised to accelerate growth in the back half of the year as we further expand our addressable market,” he added.
He said the vertical was expected to help grow full year 2026 revenue between 19% and 21%. “At current FX rates [that] is expected to be between €1.518 billion and €1.533 billion reported.”
Delayed league approvals slow revenue generation
Koerl acknowledged extended negotiations and delayed league approvals had slowed revenue realisation. “We were ready for [prediction markets] to go at the end of the first quarter call, the reality is it took a little while for that to happen.
“The delay with the prediction markets is not only in our hands, we had to wait also partly for some of our league partners that we get this approved.
“So, as a result, the timing of that delayed some of those revenues and, as such, lowered our expectations for the year, even though we’re going to have a really strong second half, partially because of prediction markets.”
He anticipates significantly larger revenue contributions in 2027 as Sportradar finalises further agreements and existing deals.
Revenue impact from predictions will depend on how regulation for the vertical pans out across the US, Koerl noted.
“This all depends also on the legal framework and the compliance in this sector, which is, as we all know, very fluid.”
Update on short-seller allegations
In recent months, Sportradar’s stock has been pressured by uncertainty surrounding prediction markets and short-seller allegations that the company has denied, Bender noted. In April, Sportradar shares sank approximately 20% following separate reports from short sellers Callisto Research and Muddy Waters Research.
According to the reports, Sportradar derives a large percentage of its business from servicing illegal, black and grey markets, with allegations from Callisto that the data provider supplies more than 270 providers with its products. In a written statement at the time, Sportradar categorically denied the claims, dismissing the reports as “factually inaccurate”.
In addressing the claims, Koerl indicated on the call that Sportradar’s audit committee has a “rigorous compliance framework and contractual protections” in place from a risk-mitigation standpoint. Koerl then added that the protections “ensure that the products which are used by our customers are in compliance with the applicable laws”.
Following the call, Sportradar closed on Monday at $12.91 a share, up fractionally. In mid-day trading on Thursday, Sportradar traded at $12.73, but remained virtually flat. Citizens maintained its “market outperform” rating, but lowered its price target from $24 a share to $20.
The state of US prediction markets
Kalshi first offered political-event contracts after winning a key court decision in the run-up to the 2024 US Presidential Election. On Election Day itself, the platform handled trading volume of $245 million contributing to a monthly volume that surpassed $1 billion.
The rollout of the markets led to the debut of sports-event contracts weeks later. The US Commodity Futures Trading Commission, the federal regulator on derivatives, took a restrictive position under former US President Joe Biden, proposing a ban on sports and political-related event contracts in 2024. However, the CFTC has taken an opposite stance under President Donald Trump’s administration, while adopting the position that the agency has exclusive jurisdiction on the regulation of the contracts.
Historically, the regulation of sports wagering and gambling in general has fallen to the states. As a result, a bitter dispute has been waged between states’ rights advocates and supporters of federal regulation. More than a dozen states have active litigation against Kalshi and Polymarket, while a larger bipartisan coalition of 44 state attorneys general have fought back against federal intervention on the topic.
“Rather than seek reasoned answers from the courts, James and New York seek to force an unprecedented sudden shutdown of prediction markets nationwide,” he wrote. “The CFTC has already sued to stop this and will continue to defend its jurisdiction.”
A flurry of lawsuits
More than a dozen states have active litigation against Kalshi and Polymarket, while a larger bipartisan coalition of 44 state attorneys general have fought back against federal intervention on the topic.
Last week, New York Governor Kathy Hochul and state Attorney General Letitia James announced a landmark suit against Kalshi. The lawsuit seeks compensatory damages against Kalshi of $36 billion.
The lawsuit, which generated nationwide headlines, has aggravated a longstanding feud between Trump and James. Last December, the US Senate confirmed Michael Selig as the 16th chairman of the CFTC. Selig, who was nominated by Trump in October 2025, has continually backed prediction markets when the operators have faced litigation from various states.
“Rather than seek reasoned answers from the courts, James and New York seek to force an unprecedented sudden shutdown of prediction markets nationwide,” he wrote. “The CFTC has already sued to stop this and will continue to defend its jurisdiction.”
Felenstein weighed in on the disputed view of prediction markets: “From our perspective, we are going to serve our clients the way we serve our clients. And as long as they’re allowed to operate in jurisdictions, we’ll continue to do so.”
Kathryn Evans
Kathryn covers bitesize breaking news with a primary focus on EMEA and US legislation. A proud North Walian, fluent Welsh speaker and lifelong Wrexham FC fan – long before Hollywood came calling.
Original article: https://igamingbusiness.com/prediction-markets/sportradar-prediction-markets-opportunity-ceo-provides-colour/
