Prediction market transactions on Polymarket yield insufficient returns for bets made
Prediction market platforms like Polymarket and Kalshi have gained traction in various event categories, including sports, although their approach to sports parlays differs significantly from traditional sportsbooks.
These platforms, such as Polymarket and Kalshi, focus on a broad range of prediction markets but do not primarily focus on parlays as sportsbooks do. Instead, they offer yes/no contracts on single event outcomes, like who will win a game, but do not currently support parlays or complex multi-event bets.
Traditional sportsbooks, such as BetNow and BetOnline, actively offer same-game parlays and mega parlays, allowing bettors to combine multiple wagers into one ticket to increase potential payouts. These sportsbooks focus heavily on parlays, props, and live betting options, features not currently prominent on prediction market platforms.
Prediction markets like Polymarket and Kalshi generate revenue primarily through transaction and trading volumes. These platforms benefit from high-frequency markets and a broad contract offering, driving user engagement and volume. Unlike sportsbooks relying on the house edge from parlays and traditional bets, prediction markets function more like exchanges, potentially taking smaller fees or spreads on trades but relying on high volume and liquidity for revenue.
Polymarket and Kalshi are positioning themselves as complementary rather than direct competitors to sportsbooks on sports betting parlays. While sportsbooks enjoy a high user failure rate with parlays, this factor is irrelevant for prediction market platforms like Polymarket.
Polymarket predetermines parlay legs, offering users a "yes" or "no" outcome of a small combination of events. However, the importance of these markets could be minimal without further innovation. Only one of the previous 10 sports-related parlay sets on Polymarket crossed $20,000 in volume.
Kalshi, regarded as the best overall prediction market platform in 2025, offers a wide array of predictive markets including sports outcomes but does not specifically offer parlay betting like sportsbooks. Kalshi attracts users by providing detailed "Predictive Insights" showing price histories for event contracts, enabling smarter trading rather than multi-leg bets typical of parlays.
Investors are pouring hundreds of millions of dollars into prediction markets like Polymarket and Kalshi. As Polymarket prepares to relaunch in the U.S. after acquiring a CFTC registered exchange and clearinghouse, there may be pressure on Kalshi to offer a product suite that includes parlays to remain competitive.
DraftKings and FanDuel sometimes offer pre-built parlays backed by celebrity endorsers, which are more profitable than what is offered by prediction markets. Kalshi may feel this pressure to offer parlays when Polymarket officially launches in the U.S.
Polymarket and Kalshi are offering prediction markets on various aspects of life, including sports, demonstrating their versatility and potential for growth beyond traditional sportsbooks.
People might find alternative options in prediction market platforms such as Polymarket and Kalshi for sports-related finance, as these platforms focus on a broad range of prediction markets but do not primarily focus on sports parlays. Unlike traditional sportsbooks, which generate revenue through the house edge from parlays and traditional bets, prediction market platforms like Polymarket and Kalshi function more like exchanges, generating revenue through transaction and trading volumes.
