The gloves are off in the battle of gambling platforms in the United States: prediction markets vs. sportsbooks.
Prediction market sites like Polymarket and Kalshi have blown wide open the way fans participate in sports. But what advantages do online sportsbooks have over prediction markets, and vice versa?
Prediction markets vs. sportsbooks: An overview
Prediction markets offer some of the same markets as top sports betting sites, with a few key differences:
| U.S. Sportsbooks | Prediction Markets | |
| New markets | Set by the sportsbook | Suggested by players |
| Range of markets | 30+ sports, including football, basketball, baseball, soccer, golf, tennis, esports, hockey, politics (offshore sportsbooks only) | Sports, entertainment, politics, finance, world events, technology |
| Winning plays | Won against the sportsbook | Won against other traders |
| Prices | Fixed odds that may change, depending on weight of money; cashout available to settle bets early | Updated in real time to reflect accuracy; buy and sell a position ('Yes' or 'No'), and swap trades to lock in profit |
| Technology | Bets are hidden from customers, no way to see what other gamblers have bet on | Transparent blockchain tech: the ability to view where the weight of money (total handle) is going |
| Trading fees | No fee on wins, though a “vigorish” (vig) is added by the sportsbook | Prediction markets charge a small fee. Markets on politics and world events have zero fees |
| Deposits | Accept a range of U.S. payment methods, including debit cards, e-wallets, bank transfers, and cryptocurrency (offshore sportsbooks only) | Crypto (usually USDC) via wallet or online exchange; bank transfer, debit card |
| Licensing | Regulated sportsbooks in 30+ states; established offshore sportsbooks | Regulated by CFTC as financial trading platforms |
Placing bets and settling trades
The main difference between online sportsbooks and prediction markets is how you pick an outcome.
A sportsbook uses a fixed-odds system, in which the bookmaker sets prices. Betting odds may change depending on the game (in a live betting market, for example) or on the amount of money wagered. However, the sportsbook always factors its charge (the “vig”) into its market pricing.
Prediction market prices are determined by customers. They suggest new markets on Discord or X, and the predictions platform sets the price.
Because traders suggest markets, they are putting their money where their mouth is. They are taking a personal financial risk that another player will buy or sell shares at a price that works for both parties.
Your price is fixed in a regular sports bet: you win at +250 or lose your stake. However, with a prediction market, you make a prediction and buy or sell shares. You can also trade out (sell) your position if the price increases, turning a profit before the event contract concludes.
Novelty markets and financials
Sportsbooks tend to focus solely on sports, with political and novelty bets restricted in regulated states. They accept some prediction ('Yes'/'No') markets and are listed as prop bets.
However, prediction markets can cover a wildly diverse range of topics, from the timing of a U.S. ceasefire with Iran to the likelihood of seeing a Hollywood star at your local Starbucks.
Canny gamblers can find value in prediction markets if they do their analysis. Sites like Polymarket bank on the “wisdom of the crowd” to gauge the likelihood of events.
Future of predictions markets vs. sportsbooks
By their nature, prediction markets are meant to be transparent and more accurate than sportsbooks. You can track real-time data and the weight of money through blockchain technology.
The flip side is that platforms like Kalshi play with fire with regulators when they accept trades that traditional sportsbooks avoid, such as presidential election picks or Oscar Best Picture predictions.
The road ahead for both betting styles could be rocky.
