Basketball may be the most profitable sport in FanDuel's fantasy sports game now, but CEO Matt King bets tennis could benefit most from legalized sports betting.

"The beauty of tennis is that you could literally bet on every single hit in the match — every single point — and so it creates a lot of opportunity for people to engage in the sport," King said on CNBC's "Squawk Alley."

King believes one of the biggest changes that the industry will see, when sports betting becomes more widely adopted, is in-play, or the ability to place bets on every single play. In-play, King says, could open the door to a lot more profit, especially in sports, like tennis where there are more opportunities to bet.

"If you think about the traditional sports book experience, a lot of it is pre-play, or betting on it before it happens," King said.

"The innovation that is going to come into the U.S., we think, will be around in-play or cash-out functionality over time," he added.

These capabilities already exist in Europe, where tennis is wildly popular.

The U.S. Supreme Court on Monday ruled that states can legalize sports betting, breaking up Nevada's monopoly on the practice.

FanDuel, which operates a web-based fantasy sports game with more than 6 million registered users, is gearing up for when the legal sports betting industry comes online.

"We are working with the regulators on what state regulation will look like. Suffice to say, we have the product design, we have our tech team working — we will be ready to go," King said.

Disclosure: CNBC parent Comcast and NBC Sports are investors in FanDuel.