Prediction markets vs sportsbooks: what's the difference?

Contents

What is the difference between a prediction market and a sportsbook?#

The difference is who takes the other side: another trader, or the house. A prediction market is an exchange: it matches your order with another trader's and charges a fee, so it doesn't need you to lose. A sportsbook sets its own odds and is the counterparty to every ticket it accepts.

Kalshi says that on its exchange "you are always trading against another member of the platform, not the exchange itself", and Polymarket US says its platform "does not take the other side of your trades and does not set prices". DraftKings's house rules describe the other model: DraftKings displays its own odds and accepts each ticket itself.

How do prediction market prices compare with sportsbook odds?#

A prediction market price is a probability: a Yes share at 0.62 pays 1 if the outcome happens, so the market puts its chance at about 62%. Sportsbook odds show the payout instead, and their implied chances add up to more than 100%.

To convert a price p into odds:

• Decimal odds are 1 ÷ p, so 0.62 is 1.61.
• American odds are −100 × p ÷ (1 − p) when p is above 0.50, so 0.62 is −163, and +100 × (1 − p) ÷ p below it, so 0.38 is +163.

DraftKings's house rules define American odds as the amount won on 100 dollars for positive odds, or the amount needed to win 100 dollars for negative odds. If a book prices both sides of a game at −110, each implies 52.4%, together 104.8%. On a prediction market, Yes and No on one outcome add up to about 1, plus the spread.

Is a prediction market cheaper than a sportsbook?#

Often, but not always. A prediction market's cost is its fee plus the spread, and both are shown before you trade. A sportsbook's margin is inside the odds: at −110 on both sides, the book keeps about 4.5% of the money if both sides draw equal amounts.

On the exchange side, Kalshi's fee schedule charges takers 1.75 dollars on 100 contracts at 0.50, which is 3.5% of the 50 dollar cost, and less near 0 or 1. Kalshi earns from transaction fees rather than positions, and its market makers earn the spread. Novig says that on its exchange there is "no vig or juice built into our prices" and charges no fee on pre-game straight trades. A thin book with a wide spread can still cost more than a sportsbook's margin. Lowest-fee prediction markets compares every venue's fees.

Can you sell a position before the result?#

Yes, on a prediction market you can sell at the current bid while the market is open, as long as someone is buying. Robinhood, for example, says you can buy and sell event contracts before expiration at the current market price.

A sportsbook offers cash out at a price it sets. DraftKings's cash out page says availability varies and an offer may not appear, and a placed ticket can't be cancelled. On Totalis, a single sells on the HyperCore order book; a Combo can be offered back to makers, who may or may not bid (how cash out works on Totalis).

Do sportsbooks and prediction markets limit winning traders?#

A sportsbook can cap a single customer. DraftKings's house rules, linked above, let it lower any customer's maximum payout at its sole discretion, with or without notice, below a general cap of 1,650,000 dollars.

Exchanges publish limits that apply to everyone. Totalis currently caps a Combo stake at 1,000 USDC for every account, per its limits and fees page. We found no exchange page promising never to restrict an account, so read each venue's terms.

How do multi-leg positions differ?#

Both join several outcomes into one position that pays only if every leg wins, and on both one party takes the whole other side. The difference is who sets the price: a sportsbook prices its multi-leg tickets itself, while on Totalis market makers compete to quote each Combo and you take the best quote with one signature.

DraftKings's market rules define its same-game multi-leg product as legs from one event, and a void leg is dropped and the ticket repriced at DraftKings's own odds. Its house rules let it void other multi-leg tickets whose legs are correlated.

A Totalis Combo holds 2 to 5 legs from different questions, one leg per question. The stake locks in the Totalis vault on HyperEVM, and settlement starts within about 10 seconds of the deciding leg. A leg that resolves to a fraction, like a tie at 0.5, scales the payout instead of voiding it. A market joins Combos only within 7 days of its event and with a live price, and some are excluded. As of 11 November 2026, Totalis lists game and season winners, not player props, so a Combo joins different games or categories. Prediction market combos compares the venues, and why we say Combo explains the name.

Are prediction markets regulated like sportsbooks?#

Not in the US. Exchanges such as Kalshi are designated contract markets regulated by the CFTC, which designated KalshiEX in 2020. Novig says its legal basis rests on federal regulation rather than the state-by-state licensing a sportsbook needs. States still matter: Robinhood's event contracts page, linked above, keeps Maryland, Michigan and Nevada residents out of sports contracts. As of 11 November 2026, Polymarket US's iPhone listing, linked in the table below, excludes Nevada, and Michigan's agreement with Polymarket US stops new sports contracts there and requires remaining sports positions to close by 25 November. Outside the US the rules vary by country. This is not legal advice; check the rules where you live.

Where can you trade sports prediction markets?#

As of 10 November 2026:

For more on picking one, see best prediction market apps and the best prediction markets for sports. NFL prediction markets and NBA prediction markets go league by league.

How do you trade a sports prediction market on Totalis?#

1. Check you can use it. Totalis is not available to US persons or anyone in the US; signing up takes an invite code.
2. Add USDC. Positions are in USDC, with no Totalis deposit fee.
3. Pick a game. Buy one team as a single on the HyperCore order book, at the price shown.
4. Or build a Combo. Add 2 to 5 legs that are open for Combos, then sign the maker quote you want.
5. Sell, cash out or let it settle. Sell a single on the book, ask makers to buy a Combo back, or wait for Hyperliquid's result.

Trade this week's games on Totalis if you're outside the US.

About the author#

Turk is a founding engineer at Totalis, the prediction market app on Hyperliquid.

Sources and further reading#

• Kalshi: who are you trading with?, accessed 2026-11-10
• DraftKings Sportsbook house rules, accessed 2026-11-10
• DraftKings: what is cash out?, accessed 2026-11-10
• CFTC designates KalshiEX as a contract market, accessed 2026-11-10
• Totalis: trading, cash out and settlement, accessed 2026-11-10

Related: Polymarket alternatives · How multi-leg payouts work · Hyperliquid vs Polymarket vs Kalshi

FAQ#

Are prediction markets better than sportsbooks?#

It depends on what you trade. Prediction markets show the price as a probability, charge a visible fee and let you sell while someone is buying. A sportsbook may suit you if you want a same-game multi-leg ticket, which Totalis doesn't offer.

Are prediction markets taxed like sportsbook winnings?#

Tax treatment depends on your country and situation. Check your national tax authority's guidance or ask a tax adviser; this article isn't tax advice.

How do you convert a prediction market price to American odds?#

Above 0.50, divide p by 1 − p and multiply by −100; below 0.50, divide 1 − p by p and multiply by 100. A price of 0.75 is −300 and 0.25 is +300.

Can you use Totalis in the US?#

No. Totalis is not available to US persons, including US citizens abroad, or anyone in the US, and using a VPN to get around this breaks its terms. Hyperliquid and US users covers Hyperliquid itself.