Sportsbooks v. prediction markets: Sydney Sweeney ad is just the beginning

The big picture: Kalshi, Polymarket and upstarts like Novig have been signing celebrity sponsors and airing splashy ads this football season in a stark reflection of the intensifying competition for wagers.

• Ad spending by prediction markets and the major sportsbooks rose 21% in the first seven months of 2026, compared to the same period a year earlier, according to Nielsen research provided to Axios.

State of play: A slew of new celebrity sponsor deals illustrate the rising marketing power of prediction markets.

• In sports, LeBron James, Derek Jeter and Eli Manning signed deals with Polymarket, while Giannis Antetokounmpo joined Kalshi.
• In entertainment, Spike Lee and Alexandra Daddario have done ads for Polymarket, while Timothée Chalamet has appeared in ads for Kalshi.

Perhaps most notably, actress Sydney Sweeney drew an avalanche of attention to little-known prediction market Novig this month with ads in which she's wearing little to no clothing.

• The Sweeney ads — like her controversial American Eagle campaign in 2025 — sparked a backlash over their salaciousness.

Follow the money: The latest ad blitz shows that prediction markets realize the football season is a crucial period for betting in the U.S., says Dustin Gouker, a gambling industry analyst.

• "The start of the football season has always been the best time to acquire customers for sports betting, no matter what is going on in the world," Gouker tells Axios. But now "the map has expanded."

State of Play: Traditional sportsbooks had about 76% of legal U.S. sports wagering in 2023, but that share fell to 64% in the first half of 2026, according to research by digital market intelligence firm Sensor Tower.

• Prediction markets went from 1% to 16% during that period.

The impact: For the conventional sportsbooks, the upshot is a more promotional environment that's forcing many of them to offer profit boosts, bonus bets and better rewards to attract customers.

• At sportsbook Bet365, for example, some customers effectively received a free $50 for placing a bet on teams to score any points in an NFL game.
• At Flutter Entertainment, which owns FanDuel, the company expects to take a $270 million hit in adjusted earnings as it invests in its U.S. sportsbook. CFO Robert Coldrake on a recent earnings call described it as "an investment in generosity spend."

Yes, but: DraftKings, FanDuel and Fanatics have their own prediction markets that allow them to compete with Kalshi and Polymarket in states where online gambling hasn't been legalized.

• When you open the DraftKings app now, it says "now live in all 50 states," even though the sportsbook side and prediction markets product operate under entirely different legal frameworks.

What we're watching: The marketing boom could come crashing down if the prediction markets lose their legal bid to maintain operations in the states that are challenging their authority to operate.

• Legal experts widely expect the U.S. Supreme Court to take up the case over whether prediction markets should be regulated by the U.S. Commodity Futures Trading Commission or by state gaming commissions.
• The prediction markets say "event contracts" are properly regulated at the federal level. Critics say it's gambling under a different name.
• "Whether you call it sports betting or sports trading, sports markets are now available in all 50 states, and it does seem like that is here to stay," Novig CEO Jacob Fortinsky told Axios in an unpublished interview earlier this year.

The bottom line: The prediction market ad blitz bears a resemblance to the sportsbook commercials that dominated the airwaves in the years after the Supreme Court opened the door to legalized gambling in 2018.