Since February, newsletter authors have had the ability to incorporate forecast data into their posts, thanks to a partnership between Substack and Polymarket. When confirming the collaboration, the company that heads the movement of predictive markets in the USA was adamant:
“Journalism is best when supported by real-time markets.”
The collaboration has sparked controversy over the partnership as the newsletter platform pivots to a full publishing ecosystem that includes text, audio, video, streaming and community.
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In recent months, Polymarket has added Yahoo Finance, DAZN, MLS and TKO (UFC/Boxing) to its portfolio of collaborations, signaling how the rise of prediction markets accompanies a direct push into media groups and sports properties.
Following the same line as its competitor, Kalshi has signed recent agreements with CNN, CNBC and the NHL, an American hockey league, which also has an agreement with Polymarket.
Last week, XP International, a company from the XP Inc. group, with Kalshi, co-founded by Brazilian Luana Lopes Lara, to bring this new category of assets to Brazil.
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These decentralized prediction markets, based on cryptocurrencies in the US, are positioned as a form of financial trading, through which positions are bought and sold based on future events, functioning as derivatives markets. They are regulated by the Commodity Futures Trading Commission (CFTC).
Or, in the words of the Financial Times’ Alphaville blog: they are offshore exchanges for trading derivatives of the “commodity of truth”.
Exactly a year ago, I explained Robinhood’s attempt to integrate contracts related to March Madness, the acclaimed college tournament in the US, into its trading application, creating a kind of market prediction center.
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given by Rex Woodbury, which inspires the title of this article and acts as a continuation of the theme 12 months later, for the rise of a new unicorn coined around the “financialization of everything”.
It was also at this same time that Nick Denton, founder of Gawker Media, was at People vs Algorithms. The theme of the podcast broadcast on April 5 suggested: “The Ultimate Media Business Model”
Along with presenters Troy Young and Brian Morrissey, Denton discussed how prediction markets would be the next generation of variants, even if they “weren’t yet called ‘media’”.
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“There is no real difference between media and investing. If you understand how stories move people, you understand how they move markets,” he said.
The certainty that this concept “will change”, according to them, is based on the premise that betting results fused with content represent the final manifestation of a fully interactive information space.
“This is what the world looks like when kids weaned on YouTube, Discord, Fortnite, crypto, and DraftKings embrace the world of media as their immersive gaming console. Make the meme. Trade the meme.”
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The foreshadowing 12 months ago confirms the rise of a hybrid between media and capital, in a context of fragmentation of the sector, becoming more specialized and more niched, as highlighted by Young and Morrissey.
Analysts, in turn, indicate that niching is not a pulverization of the system, but a “hyperpersonalization”. And in this scenario, content becomes a cost and the real value migrates to complements: fandoms, communities, products, experiences and, now, predictive markets.
“The new frontier in the content economy”
The theory of how content has essentially become a top of the funnel for complementary products was presented by Doug Shapiro last year, and is well contextualized by analyst Jen Topping in her recent dissertation on how betting and prediction markets represent the new frontier in the content economy.
For Topping, it is a media convergence that no longer respects borders.
In September, by Shapiro, showing that, in the traditional model, content is the final product, and revenue comes from renting the public’s attention through advertising.
In the new paradigm, content becomes a cost. Sustainable profit therefore migrates to the ownership of add-ons.
Shapiro’s conclusion is that falling costs shift value to add-ons while making content creation inherently unprofitable. Whether called “loss flagship,” CAC, top of funnel, or simply “marketing,” the content unit becomes a cost center.
Topping recalls that Banijay, which merged with All3Media, had invested in an online gaming and betting company.
In October last year, the Banijay Group announced that it was combining its stake in Betclic, a leading European betting company, with a majority stake in Tipico, the leading gambling provider in Germany.
Wim Ponnet’s article, shared by Topping, explains the motivations behind the acquisition: achieving scale in the stagnant television production sector.
The “transformative” economic situation cited by Ponnet predicted that gaming and betting activity in the business would represent more than 60% of EBITDA, while TV would play a minority role in this new post-transaction scenario.
The case not only confirms Shapiro’s thesis but also indicates what Young and Morrissey envisioned a year ago: the real leverage is in the narratives that drive markets, not necessarily in a pure media business.
What Prediction Markets Change in Sport
In February, during the All Star Game celebrations in Los Angeles, the NBA All-Star Technology Summit brought together founders from Kalshi and Polymarket, along with senior leaders from FanDuel, DraftKings, MGM Resorts and Sportradar.
The meeting explored the growth of prediction markets, their implications for fan engagement, integrity considerations, regulatory dynamics and the broader role of probability markets in the sports and media ecosystems.
Analyst Carlo De Marchis participated in the event and brought some conclusions in his bulletin:
- Speculation surrounding future collaborations involving the major leagues reflects a broader industry search for new sources of revenue around live sport.
- Prediction markets can open additional channels for fan participation, extending engagement to predictions, season-long narratives and off-field developments
- Media executives are watching closely as these markets generate signals about collective expectations that can shape editorial workflows and sponsorship integrations.
“Seeing prediction markets positioned alongside artificial intelligence and investment strategy suggests that sport is examining how financialized participation can evolve within its digital ecosystem,” he pondered.
The maxim that prediction markets are being framed as part of the evolving digital economy in sport, linked to data, probability and collective sentiment, is also defended by Ed Abis, founder of Dizplai, a startup focused on fan engagement solutions.
Invited by Paola Marinone and Bengü Atamer to discuss Polymarket’s agreements with DAZN and MLS, Abis expanded the discussion on how sports rights are becoming about the “underlying market.”
The understanding is that a prediction market goes beyond a “Bet 2.0”, functioning more as a real-time “Demand Index”, backed by money, for your product.
Abis cites the DAZN and Polymarket partnership as significant because it makes the connection between viewing and trading explicit.
“You watch a fight, see real-time probability data on the screen, and the line between being a fan and being a market participant starts to blur,” he argued.
The executive describes this as the concept of the “primary oracle”. In prediction markets, the oracle is the definitive source that validates a contract, typically represented by official results or verified data feeds.
However, he notes that a new dynamic is emerging: fan engagement data is turning into a “sentiment oracle.” Rather than simply validating the contract, this information is now leading the price discovery process, directly influencing the value placed on events.
The regulatory elephant in the room
In an article published in Valor Econômico at the end of January, Udo Seckelmann, Pedro Heitor and Raphael Cvaigman, from the Gambling & Crypto department at Bichara e Motta Advogados, debated whether prediction markets are derivatives or bets.
For experts, the most appropriate path would be legislative treatment, with the construction of a specific regime that considers the peculiarities of these markets, recognizes their benefits and the risks that are specific to them, such as market integrity.
Last Friday, Sports Business Journal reported that the CFTC plans strict new rules for prediction markets in the United States. The trading regulator is opening a 45-day public comment period to draft rules that prevent manipulation on these platforms.
As an aside, the Unofficial Partner podcast notes, for example, that DAZN did well to enter the market quickly, but warns that sponsorship money in prediction markets may not be sustainable in the long term.
The warning about the entry of these brands into the world of sports and media, with a focus on short-term gains, is understood as a “pipeline of unwary people”.
According to UP, what is often overlooked in the euphoria surrounding the prediction market is that it belongs to the entertainment industry, not the financial sector.
To attract new customers, the game needs to look attractive. Winning is exciting, but losing to a market-neutral hedging algorithm like Sequoia that looks for pricing flaws and eliminates inefficiencies is no fun, reminds UP. And if defeated for insider traders, who exploit markets based on inside information, it is not a pleasant experience either.
“Nobody volunteers to be shark bait.”
