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Shayne Coplan, CEO of Polymarket, has sharply criticized state-licensed sports betting platforms, referring to them as a “scam” that takes advantage of bettors.
His remarks come as Polymarket seeks to position itself as a competitor in the online sportsbook market by offering innovative sports prediction markets.
In a recent conversation with Axios business editor Dan Primack at the Axios BFD Summit in New York City, Coplan shared his insights on the current landscape of state-regulated sports betting. He pointed to major operators like FanDuel, DraftKings, Fanatics, and BetMGM, alleging that their business practices often do not serve the best interests of consumers.
“If you look at all four of those products, they’re all identical,” he said. “None of them innovate. They all rip off the consumer, respectfully. You can only trade against the house. They can ban you if you make money and they can profile you as a user and change the prices based on you. That’s a scam. In traditional finance, that’s like a bucket shop. It’s a scam. Those are illegal.”
An unfair duopoly
Coplan has taken aim at the dominance of FanDuel and DraftKings in the regulated sports betting market, describing it as an unfair duopoly that makes it challenging for new brands to emerge.
He highlighted the obstacles faced by potential competitors trying to establish themselves in a landscape so heavily influenced by these two giants.
“There’s this patchwork state-based solution where every single state is like some sort of weird backdoor lobbying of the tribes get this and the tax is this rate, and everything is like this hodgepodge solution,” he added. “And as a result, it’s so goddamn complicated and expensive that no new entrants can enter the market.”
As Polymarket prepares to make its return to the US market under the oversight of the Commodity Futures Trading Commission (CFTC), the company aims to provide “legal sports betting in all 50 states.”
This strategic move comes as various daily fantasy sports operators, such as Underdog and PrizePicks, have begun to tap into sports prediction markets in states that prohibit traditional online sports betting.
PrizePicks, for instance, has launched Kalshi markets and partnered with Polymarket, indicating a collaborative effort to expand their offerings across different states.
While Polymarket collaborates with PrizePicks, it is also gearing up to compete directly with online sportsbooks across regulated states and beyond. Recent developments have seen FanDuel and DraftKings planning to branch into non-sports betting states through partnerships with CME Group and an acquisition of Railbird respectively.
A federally approved ‘financial market’
Coplan expressed confidence that Polymarket’s operations will eventually gain Supreme Court validation.
When questioned about why Polymarket should be allowed to offer sports contracts across all U.S. jurisdictions, especially while traditional sportsbooks are limited to states that have legalized sports betting, Coplan clarified the basis for Polymarket’s model.
Primack raised concerns about whether this approach merely exploits a legal loophole. Coplan asserted that Polymarket’s offerings represent a federally approved “financial market.”
He drew comparisons to industry players like CME Group and Railbird, pointing out that Polymarket functions as a federally regulated derivatives exchange and clearinghouse. This structure enables the company to offer and facilitate trading on its platform while maintaining compliance with existing regulations.
“That’s what we’re going to market with,” Coplan said. “That is the infrastructure, and we’re focused on being compliant within that framework.”
Source: SBCAmerica
