Investors are pouring hundreds of millions of dollars into prediction markets as Polymarket and Kalshi gamify almost every walk of life, while clawing their way into competition with sportsbooks.
Parlays may be their bugaboo.
Traditional parlays via sportsbooks allow people to build their own multi-step bets in which every element must come true for the user to win. These types of wagers now garner more than 70% all gross revenue for U.S. sportsbooks in some states.
Prediction markets? Not so much. Kalshi has so far abstained from offering sports parlays, and while international rival Polymarket provides them in Europe, that might not really matter from a revenue standpoint. Polymarket’s parlays don’t seem to move the needle in their current form.
The structure of prediction markets has prevented Polymarket from creating parlays in the open-ended way traditional sportsbooks can. Instead, the Shayne Coplan-led company predetermines parlay legs, restricting users to a “yes” or “no” outcome of a small combination of events happening that cannot be customized further.
For example, Polymarket offers trades on pairs of fighters to win bouts at this weekend’s UFC Fight Night. People can put money on Robert Whittaker and Davey Grant to both win on July 26 for about $0.18 (or the corresponding “no” contract for about $0.82). There are currently 10 pairings listed for the event.
Only one of the previous 10 sports-related parlay sets on Polymarket crossed $20,000 in “volume.” And for prediction markets, the “volume” metric is usually much higher than the amount of money actually wagered. It counts a full $1 for each trade regardless of how much the user risks (always a fraction of $1). So, if someone buys a contract for $0.13, Polymarket reports it as $1 of volume.
As a point of reference, even routine non-parlayed MLB games, such as Tuesday night’s Rangers-Athletics matchup, beat entire fight cards in terms of “volume” by multiples of 10 or more.
This past week, however, Polymarket offered a prediction-market parlay that gained some real traction. There is about $500,000 in “volume” for an “Astronomer Divorce Parlay,” based on a moment at a recent Coldplay show that went viral online. The concert’s big screen captured two executives from the data company Astronomer in an embrace, and their reactions suggest they weren’t supposed to be seen together. The internet went wild, and Astronomer CEO Andy Byron has since resigned.
Both Byron and his alleged paramour, Astonomer chief people officer Kristin Cabot, must announce their intentions to divorce their respective spouses by Aug. 31 for Polymarket’s “yes” trade to pay out. (Since the market’s creation, it has been reported that one of the parties isn’t married, leading Polymarket to clarify that “if Cabot was unmarried at the time this market was created, it will satisfy the ‘Cabot … announce their intention to divorce’ clause.”)
But even this parlay has a capped upside for Polymarket. It is no more profitable than a straightforward, single-event contract on a per-transaction basis. Prediction markets make money from trading fees, not the difference between money wagered and money paid out. In other words, the user failure rate sportsbooks enjoy, with parlay odds well in their favor, is irrelevant for prediction market platforms like Polymarket, where the number of users participating is the singular focus.
Sportsbooks such as DraftKings and FanDuel sometimes offer pre-built parlays backed by celebrity endorsers. But these are in addition to their customizable build-your-own parlays and are more profitable than what is offered by prediction markets.
Polymarket is not currently live in the U.S. but expects to be in the “near future” after acquiring a CFTC registered exchange and clearinghouse. Once Polymarket officially relaunches in the U.S., Kalshi may feel more pressure to offer a competing product suite that includes parlays. Kalshi has advertised fake parlay slips on social media through affiliate marketers in recent weeks, reposted by CEO Tarek Mansour.
Barring further innovation, the importance of these markets could be minimal, given the meager returns Polymarket has seen internationally from its limited offerings. They will need to meaningfully increase user acquisition to pay off.
Polymarket did not respond to a request for comment. Kalshi declined to comment.
(This story has been corrected in the first paragraph to clarify the value of the prediction markets’ recent raises.)
