Fanatics CEO Warns $7 Billion Betting Ad War Looms as Kalshi, Polymarket Join Fight

U.S. betting and gaming marketing spending could more than double to $7 billion in 2027 as prediction markets intensify competition, Fanatics CEO Michael Rubin warned.

Rubin estimates the industry spent about $3 billion in 2025, with Kalshi and Polymarket now joining the fight for customers against established sportsbooks DraftKings Inc. (NASDAQ:DKNG) and Flutter Entertainment PLC (NYSE:FLUT), which owns FanDuel.

“There were probably $3 billion spent in U.S. betting and gaming last year. I bet you there’ll be $7 billion spent in marketing next year,” Rubin said in an interview with CNBC this morning.

Five-Way Fight Drives Spending Higher

Rubin said the industry has gone from two dominant players, DraftKings and FanDuel, to five major competitors, including Fanatics, Kalshi and Polymarket.

Prediction markets have expanded the competition by offering sports-related contracts in states where conventional online sportsbooks cannot operate. State regulators are challenging those contracts in court, arguing that state gambling laws should apply.

A Reuters/Ipsos poll released Monday found 43% of Americans opposed using prediction markets to wager on professional sports, compared with 29% who supported it.

Fanatics itself operates both a sportsbook and a prediction-market platform.

“We’re a distant number three in the betting and gaming business. We don’t like that,” Rubin said.

Rubin estimates Fanatics now controls nearly 10% of the U.S. sports betting market. The company plans to increase its marketing budget from $350 million this year to as much as $1 billion in 2027.

Rubin said profits from Fanatics’ merchandise and collectibles businesses allow it to invest more aggressively in betting despite the difficult competitive environment.

Sportsbooks Are Already Feeling the Pressure

Advertising spending by major sportsbooks and prediction markets rose 21% in the first seven months of 2026, according to Nielsen research reported by Axios.

Flutter also expects a $270 million reduction in 2026 adjusted EBITDA from additional investment in its U.S. sportsbook, including more generous customer promotions, according to its second-quarter earnings call.

The company described the spending as a deliberate investment in growth and said prediction markets have had limited impact on its existing sportsbook customers.

Rubin remains optimistic about betting’s long-term prospects but expects little consolidation among the five major competitors, arguing that all are well financed.

That could mean sustained spending pressure for DraftKings and Flutter as they defend their market positions.

“It will not be a fun next couple of years,” Rubin said.

Kalshi and Benzinga have an existing data collaboration agreement.

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