Kalshi Had Worse Pricing Than DraftKings, FanDuel in NFL Week One
The perception among bettors that firms like Kalshi provide better pricing on NFL wagers than operators like DraftKings (NASDAQ: DKNG) and FanDuel is one reason prediction markets might become a pain in sportsbooks' sides. That was more perception than fact during the first week of the NFL season.
There is a misconception that yes/no event contracts provide the average bettor better pricing than what they get at traditional sportsbooks, but that wasn't the case on Kalshi during the first week of the 2025 NFL season, according to Citizens Equity Research Analyst Jordan Bender. This misconception stems from the fact that derivatives exchanges charge transaction fees rather than vig.
Bender compared Kalshi's pregame money line and total prices to those of DraftKings and FanDuel on Friday, September 5, and Sunday. He pointed out that the exchange's pricing on those wagers was worse than that of its rival sportsbooks after deducting Kalshi's transaction fee.
"Pricing on Kalshi for the money line and over/under was 10% and 25% more expensive compared to DraftKings for the NFL slate on Friday and 16% and 23% more expensive compared to FanDuel, respectively,” observes Bender. “We ran pricing before kickoff on Sunday; pricing tightened between the traditional sportsbooks and Kalshi, yet the average of the money line was still 7% more expensive compared to FanDuel/DraftKings, with over/under 10% more expensive.”
About two weeks after Kalshi self-certified to provide yes/no contracts on NFL player propositions, sides, and totals, Bender's findings became public.
Kalshi Parlays Might Also Be Worse
There was a lot of news about prediction markets last week. One of the most prominent stories included a regulatory filing from Kalshi that said the exchange would provide multilegged event contracts, which are basically its equivalent of football parlays.
Because parlays are important sources of income and profit for businesses like DraftKings and FanDuel parent company Flutter Entertainment (NYSE: FLUT), it caused a stir in the sports betting market. The good news for established gaming organizations may be that the parlay pricing of prediction markets may likewise be somewhat unsatisfactory.
“We expect pricing to be even more inferior compared to DraftKings and FanDuel with the collateral needed by the market makers to trade the product,” adds Bender.
Bender also pointed out that another element that can frustrate casual bettors is Kalshi's cash-out option. Briefly said, the exchange is thought to have better pay out capabilities than traditional sportsbook operators, which is crucial for parlay bettors. However, Bender notes that this is more myth than fact.
It's Possible to Overestimate the Competitive Threat
With football event contracts offered by Crypto.com, Kalshi, Polymarket, and Robinhood, and the possibility that some or all of those companies would expand their football menus, there is a growing perception that prediction markets are openly expressing their desire to compete with sportsbooks.
Similar to what other analysts have said. According to Bender, the competitive threat prediction markets offer to sportsbook operators may be exaggerated rather than accurate, at least for the time being.
“Together with inferior pre-game pricing, UI/UX, and cashout, we do not view betting exchanges as a competitive threat to profitability for existing operators (DKNG, FLUT, MGM Resorts Caesars Entertainment, PENN Entertainment, Rush Street Interactive) in the legal sports betting states and should not expect to see reactionary promos/marketing as a result,” he concludes.
