The first full NFL season with prediction markets at scale has produced an advertising cycle that looks like the sportsbook land grab of the early 2020s, except that the money is now flowing through a channel the states do not supervise. Prediction market companies spent nearly $200m on digital advertising in the first seven months of 2026, according to the American Gaming Association, the trade body for regulated casinos and sportsbooks. The same trade group estimates that more than half of the digital sports betting ads consumers saw through July came from companies that were not subject to state rules on promotions and responsible-gambling messaging.

That number should be read as an argument as well as a figure — the AGA represents the licensed operators that prediction markets are now competing against, and its members’ own advertising is restricted in ways theirs is not. But the underlying mechanism is not really in dispute. The operators that flooded television and streaming after 2018 were supervised by state gaming regulators, and by 2025 those states had tightened advertising and promotion rules. Digital sportsbook ad impressions fell nearly 14% that year, according to Sensor Tower. Prediction markets sit outside that regime: they are regulated federally as exchanges, so the state requirements that govern sportsbook marketing — including responsible-gambling messaging — largely do not attach to them. The fastest-growing category of gambling advertising in the country is, in effect, exempt from the rules written for the slower-growing one.

The buying is visible. Novig has an ad featuring Sydney Sweeney that jabs rival platforms with the line “no betting on wars, or deaths, and no politics,” and runs a separate spot promoting responsible play that the company is not required to include. Betr reunited the cast of Entourage to promote its Polymarket-powered product, prompting Entourage creator Doug Ellin to call the ad “trash and theft.” Polymarket’s football campaign features Eli Manning, Derek Jeter, Sue Bird and Spike Lee, and the platform has drawn criticism for enlisting LeBron James — an active NBA player — to promote sports contracts. The league does not prohibit that, and is reportedly negotiating its own prediction market deal.

The incumbent side is spending defensively in the same market. FanDuel expects its promotional push to cost roughly $270m in adjusted EBITDA this year. DraftKings is concentrating marketing on California, Texas and other states where sports betting is illegal, and has gone as far as running attack ads against Kalshi. BetMGM CEO Adam Greenblatt has told investors that prediction markets are absorbing marketing dollars across channels, raising customer acquisition costs and lengthening payback periods; Penn Entertainment CEO Jay Snowden expects football season to become an “arms race” with what he calls “very aggressive, irrational” spending on advertising and customer acquisition.

Citizens equity analyst Jordan Bender frames the timing question plainly: “If we’re in inning one, as we saw in sports betting, first mover advantage is big, so these companies are going to move as quick as they can to go acquire and build out as fast as they can.” Whether that spending is rational depends on the courts. New Jersey has asked the Supreme Court to decide whether states can regulate sports prediction markets as gambling, after federal appeals courts split in New Jersey and Nevada; related litigation now spans roughly 20 states. If there is no ruling and no line of sight to one, Bender asks, do these companies keep spending anyway?

The NFL itself has hedged. It renewed multiyear partnerships with DraftKings and FanDuel and added Fanatics as a third official sportsbook partner, while declining to sign a prediction market partner of its own.

Set aside the question of whether states should be allowed to regulate these products as gambling. Whatever the Supreme Court decides, the marketing is running now, at a scale built for a mature regulated market, delivered through a channel that answers to federal financial regulators rather than to state consumer protection rules. The cost of that asymmetry is not paid by the operators bidding up acquisition prices. It is paid by the audiences the ads reach, in the states least equipped to require anything of the companies buying them.