Dustin Gouker answers our burning questions about prediction markets, emerging verticals

Dustin Gouker is one the most well-known and respected reporters in the gaming industry. 

He’s spent more than 20 years as a sports journalist, and nearly six heading up content at Catena Media. Today, Dustin writes two of the industry’s hottest newsletters—The Closing Line and Event Horizon—where he covers anything from states’ sports betting numbers to the burgeoning prediction markets landscape. 

In two weeks, Dustin will be opening up NEXT’s Emerging Vertical event with a prediction markets-focused session alongside Sporttrade CEO Alexander Kane and Duane Morris Partner Bill Gantz. 

We connected with Dustin ahead of his talk to get his read on where he thinks prediction markets are headed, how likely “new” entrants are to find success in this space, and what other verticals are piquing his interest.

This interview has been lightly edited for flow and clarity.

BettingStartups: You're moderating the opening session "The Prediction Market Momentum and the New Wave of Emerging Verticals" — what are the topics you're most eager to dig into with the panelists during the talk?

Dustin Gouker: I think there has been so much noise and disruption because of prediction markets... I am not sure how many people have taken a breath and thought more about the opportunity and where it is headed. And there's so much focus on operators, when there are opportunities far beyond just being the place where prediction markets trades happen. My hope is this panel and the overarching event gets people thinking beyond the deluge of news we have seen around prediction markets in the past year.

I also think skill gaming is a vertical that is going to get increasing attention in the gambling industry. I am eager to dig into that over the course of the panels at the Emerging Verticals event. 

BS: Prediction markets have evolved rapidly over the last 12 months—big growth, sports team partnerships, OSB operators getting involved—if you could consult a crystal ball about where the space is headed over the next 12–24 months, what is a single uncertainty (or a few) you'd want clarity on, and why?

DG: Obviously, the biggest of all the elephants in the room is whether sports event contracts will survive beyond the next couple of years. There are people that believe with 100% certainty that prediction markets will disappear or will be here into perpetuity. The real probability of that is of course somewhere in the middle, and pricing the final outcome in the courts is difficult at best. Regardless, the legal certainty on prediction markets and sports event contracts is the biggest unknown.

Beyond that: will people bet/trade/speculate on the "everything else" outside of sports and big elections? Polymarket has proven that this is possible with its international site, but the non-sports markets have not taken off in the CFTC-regulated space beyond a few one offs.

And of course, will Congress do anything? That seems unlikely but also isn't impossible.

BS: Right now, prediction markets are primarily dominated by two players, but there are a growing number of competitors entering the space, from smaller brands to OSB leaders like DraftKings and FanDuel—given the major first-mover advantage behind Kalshi and Polymarket, how competitive do you think these other brands can and will be?

DG: The head-start by Kalshi is definitely meaningful, but the sheer number of operators coming into the space to contest it B2C is huge, and is limited only by your imagination. Anyone with a customer's wallet or a web presence could be a prediction market (or use markets from Kalshi and others to power their own product). I think on the sports side of things, I wouldn't bet against the sports betting and fantasy companies. DraftKings and FanDuel are clearly going to spend to contest the market.

I also think Robinhood is the current biggest threat to lead the market. They already account for a huge percentage of trading volume via Kalshi as a partner. They have a huge user base that is already using prediction markets and store their money or other assets on their app. That's a really good starting place.

BS: Of the other "emerging verticals" in play in the broader real-money gaming industry, which do you think are best positioned for growth, or at risk of losing relevance, in the next 12–24 months and why?

DG: Sweepstakes isn't going away entirely, but the size of the industry's addressable market is still under assault. I will be interested to see how they pivot… some of that pivot may be to other emerging verticals, including prediction markets.

I think skill gaming will have its moment in the coming years. Triumph is a huge company in the space and I think everyone is just now waking up to this opportunity.