MargusKey takeaways - Sportsbooks set the odds and bet against you; their margin is built into the price. - Prediction markets (Kalshi, Polymarket) are exchanges where users trade yes/no contracts that pay $1 if the event happens. - A contract price in cents reads directly as a probability: 62¢ ≈ 62%. - Prediction markets charge fees and have a bid-ask spread instead of a classic vig, so they are not automatically cheaper. - The only way to know which is better for a given bet is to convert and compare, which is what Margus does.
Glossary
- Event contract: a contract that pays a fixed amount (e.g. $1) if an outcome happens, and nothing if it doesn't.
- Yes / No: the two sides of a contract. Buying "No" is like betting against the outcome.
- Bid / ask: the best price buyers will pay and sellers will accept.
- Spread (bid-ask): the gap between bid and ask; a hidden cost of trading.
- Liquidity: how much money is available to trade near the current price.
- Maker / taker: a maker posts an order that waits; a taker fills an existing order. Fees can differ.
- CFTC: the US Commodity Futures Trading Commission, which regulates US prediction market exchanges.
How sportsbooks work
A sportsbook such as DraftKings, BetRivers or theScore Bet is a bookmaker. It publishes prices, accepts your bet and takes the opposite side. It earns its money from the margin built into those prices (see what is vig) and from customers' net losses. It can also adjust prices, set maximum stakes and limit accounts.
Sportsbooks offer a huge menu: spreads, totals, player props, same-game parlays, live betting, boosts and promotions. In the UK and Europe, the equivalent is the high-street or online bookmaker; betting exchanges such as Betfair Exchange are the closer analogue to prediction markets.
How prediction markets work
On Kalshi or Polymarket, you buy a contract. "Will the Chiefs beat the Raiders?" might trade with Yes at 70¢ and No at 31¢. If you buy Yes at 70¢ and the Chiefs win, the contract settles at $1, a 30¢ profit per contract. If they lose, it settles at $0.
Prices are set by users trading with each other, not by the platform. The exchange typically earns from trading fees. You can also sell your contract before the game ends, locking in a profit or cutting a loss at the current market price, much like trading out on a betting exchange.
Converting contract prices to odds
| Contract price | Implied % | Decimal | American | Fractional |
|---|---|---|---|---|
| 25¢ | 25% | 4.00 | +300 | 3/1 |
| 40¢ | 40% | 2.50 | +150 | 6/4 |
| 50¢ | 50% | 2.00 | +100 | evens |
| 60¢ | 60% | 1.67 | -150 | 4/6 |
| 75¢ | 75% | 1.33 | -300 | 1/3 |
These are before fees. For the formulas, see how to read odds and implied probability.
Key differences at a glance
| Sportsbook | Prediction market | |
|---|---|---|
| Who sets the price | The bookmaker | Users trading on an exchange |
| How the operator earns | Margin built into odds | Trading fees (and the spread is a cost to you) |
| Price format | American / decimal / fractional | Cents per $1 contract |
| Can you exit early | Sometimes via cash-out, at the book's price | Yes, by selling at market price |
| Market range | Very wide (props, parlays, live) | Narrower, growing |
| Limits | Book can limit stakes or accounts | Limited mainly by available liquidity |
| US regulation | State gaming regulators | CFTC (federal), with ongoing state challenges |
Fees: the "vig" of prediction markets
Prediction markets don't hide a margin in the price, but they are not free. Kalshi publishes a fee schedule in which the trading fee depends on the contract price and number of contracts, tending to be largest in cents near 50¢ and smaller near the extremes. Check the current Kalshi fee schedule and Polymarket's own fee terms before comparing, because they change.
On top of fees, there is the bid-ask spread. If Yes is bid at 68¢ and offered at 70¢, buying now costs 70¢; selling straight away would only get 68¢. In liquid markets the spread is often a cent or so; in thin markets it can be wide enough to wipe out any price advantage.
Worked example: NFL moneyline
Sportsbook: Raiders +200 (decimal 3.00, implied 33.3%). Prediction market: "Raiders win" Yes at 30¢.
- Raw conversion: 100 ÷ 30 = 3.33 decimal (+233).
- Add the fee. Suppose fees add roughly 1–2¢ per contract at this price (check the live schedule). Effective cost ≈ 31.5¢ → 100 ÷ 31.5 ≈ 3.17 (+217).
- Compare: 3.17 beats the sportsbook's 3.00. On this bet, the prediction market wins.
Now flip it: Chiefs at -250 at the sportsbook (1.40, 71.4%) vs Yes at 72¢ on the exchange. Raw 72¢ = 1.39, and fees make it worse. Here the sportsbook is better. Neither venue wins every time.
Worked example: Arsenal v Chelsea
Prediction markets often list football as separate yes/no contracts: "Arsenal win", "Draw", "Chelsea win". A UK bookmaker might offer Arsenal at 10/11 (1.91, 52.4%). If "Arsenal win" trades at 50¢, the raw price is 2.00 before fees. After a small fee, the effective price may be around 1.95, still slightly better than 10/11. If the market is thin and you must pay 53¢ to fill your stake, it becomes worse. Liquidity matters as much as the headline price.
Are prediction markets better odds?
Sometimes, and it depends on four things:
- The price level. Fee structures that vary with price can make some prices cheaper to trade than others.
- Liquidity. Big NFL games and major football fixtures attract more trading than niche markets, typically with tighter spreads.
- The sportsbook's margin on that market. Competitive main lines leave less room for an exchange to beat them; high-margin props and futures leave more.
- Your stake size. Larger orders can move through several price levels on an exchange.
The honest answer to "Kalshi vs sportsbook" is: compare every bet. Margus's own data, which records sportsbook and prediction market prices for the same events, is built for exactly this.
Regulation and availability
In the US, Kalshi is a CFTC-regulated exchange, and Polymarket operates a CFTC-regulated US platform. Sports event contracts have drawn legal challenges from several states and tribal gaming interests, so the landscape is evolving; follow the operators' own announcements for current availability. Outside the US, eligibility varies by platform and country. UK and European bettors are generally best served by locally licensed bookmakers and exchanges, and can still use Margus to see how US prediction market prices compare.
Which should you use?
- Choose a sportsbook when you want props, parlays, live betting or promotions, or when its price is better after you compare.
- Choose a prediction market when it offers a better effective price after fees, when you want the option to sell your position before the result, or when sportsbook limits restrict your stake.
- Use both if you can legally access both: treat them as extra venues in your line shopping routine rather than rivals you must pick between.
For UK and European readers, the same logic applies to bookmakers versus betting exchanges: compare after commission, check liquidity, and take the better number.
Expert tips
- Always compare after fees. A headline price that looks better can be worse once fees and the spread are included.
- Use limit orders where possible. Posting a price instead of taking the ask can reduce spread costs (check maker/taker fees).
- Watch liquidity before staking. Look at the order book depth, not just the last traded price.
- Use prediction markets as a price signal. Even if you can't trade them, their prices are a useful probability benchmark against sportsbook odds.
- Treat it like betting. You can lose your entire stake. Set limits exactly as you would at a sportsbook.
Compare sportsbooks and prediction markets on Margus
Margus puts DraftKings, BetRivers and theScore Bet next to Kalshi and Polymarket for the same games, so you can see which venue offers the better price. Explore the prediction markets hub, compare all odds, or go straight to NFL odds and soccer odds. Read our methodology to see how prices are normalised.
*Margus is an odds-comparison and research site and does not accept bets or trades. Prediction markets and sports betting carry risk of loss. Check eligibility where you live, set limits, and visit our responsible gaming page for support.*
Frequently asked questions
What is the difference between a prediction market and a sportsbook?
A sportsbook sets prices and takes the other side of your bet. A prediction market is an exchange where users trade event contracts with each other, and the platform usually earns from fees.
Do prediction markets have better odds than sportsbooks?
Sometimes. Without a built-in margin, prices can be closer to fair, but trading fees and bid-ask spreads add cost. Which is better varies by game, price and liquidity, so compare each bet.
How do I convert a Kalshi price to odds?
A contract paying $1 at a price of P cents is decimal odds of 100 ÷ P before fees. 40¢ ≈ 2.50 (+150). Then adjust for the fees the platform charges.
Are Kalshi and Polymarket legal?
Kalshi is regulated in the US by the CFTC as a designated contract market, and Polymarket operates a CFTC-regulated US platform. Sports event contracts have faced state-level legal challenges, and availability outside the US differs, so check each platform's eligibility terms.
Can I use Kalshi or Polymarket in the UK?
Their US platforms are generally for eligible US users. Rules change, so check each operator's terms for your country. UK bettors can compare prices on Margus regardless.
Are prediction markets gambling?
Legally they are regulated as financial derivatives in the US, but financially the risk is similar to betting: you can lose your whole stake. Apply the same responsible gambling habits.