Prediction markets vs. sportsbooks: the differences that matter
At a sportsbook you bet against the house at odds it sets, with its margin built in. On a prediction market you trade contracts with other people at prices they set, pay a small fee or none, and can sell before the game ends.
Key takeaways
- A sportsbook sets the odds and builds in its margin (the vig). An exchange price is set by traders, and Novig says its prices carry no vig.
- Exchanges charge a trading fee instead: none on Novig pregame straight trades, a fee that peaks at 50¢ on Kalshi.
- You can sell a position before the game ends, and you can set your own price with a limit order.
- Exchanges are federally regulated, so they reach states without legal sportsbooks, though several states are fighting that in court.
Prediction markets and sportsbooks let you back the same team in the same game. The experience around that bet is different in ways that affect how much you pay, how much you can bet and what you can do after you place it.
| Sportsbook | Prediction market (Kalshi, Novig) | |
|---|---|---|
| Who you bet against | The sportsbook (the house) | Other traders, matched on an exchange |
| Who sets the price | The sportsbook's traders | Buyers and sellers, through an order book |
| What it costs | Vig built into the odds (about 4.5% at -110/-110) | A trading fee: none on  Novig pregame straight trades; peaks near 1.75¢ per contract on  Kalshi |
| Choosing your price | Take the posted odds | Take the best price, or post your own with a limit order |
| Getting out early | Cash-out offer, if the book makes one | Sell your contracts to another trader at the market price |
| Limits on winners | Books can limit or close winning accounts | No house to limit you; size is limited by liquidity and position rules |
| Regulation | State gaming regulators, state by state | The CFTC, federally; several states contest this in court |
| Price format | American odds (-150, +130) | Cents, which equal implied probability (60¢ = 60%) |
Who sets the price?
A sportsbook's traders set the odds and move them to balance their risk. On an exchange, the price is wherever the best buyer and the best seller meet. Novig describes its prices as carrying "no vig or juice," because the exchange isn't on the other side of your trade.
That matters most for bettors who shop for prices. On an exchange you can see exactly where other people are willing to trade, and you can post a better price and wait for someone to take it.
Which is cheaper: vig or exchange fees?
A sportsbook's margin is hidden in its odds. At -110 on both sides of a game, the book takes in $220 for every $210 it pays out, keeping about 4.5% of the money wagered.
Exchanges charge a visible fee instead, and both Kalshi and Novig use the same shape: rate × contracts × price × (1 − price), which is largest at a 50¢ price.
- Novig: no fee on pregame straight trades. Live and futures takers pay 0.06 × P × (1 − P); makers pay nothing.
- Kalshi: a fee on expected earnings, which third-party analyses put at 0.07 × P × (1 − P) for takers. At 50¢ that is 1.75¢ a contract, about 3.5% of your stake.
Sports Index
Novig's fee page (support.novig.com); Kalshi's rate as reported by Allium and InGame; Sports Index calculationSee the data
| Price | Kalshi taker (0.07) | Novig live taker (0.06) | Novig pregame |
|---|---|---|---|
| 5¢ | $0.34 | $0.29 | $0.00 |
| 10¢ | $0.63 | $0.54 | $0.00 |
| 25¢ | $1.32 | $1.13 | $0.00 |
| 50¢ | $1.75 | $1.50 | $0.00 |
| 75¢ | $1.32 | $1.13 | $0.00 |
| 90¢ | $0.63 | $0.54 | $0.00 |
| 95¢ | $0.34 | $0.29 | $0.00 |
See our full fee comparison for deposits, withdrawals and parlays.
Can you choose your own price?
At a sportsbook you take the posted number. On an exchange you can place a limit order: name the price you want and wait for a seller. If you would back a team at 44¢ but it trades at 46¢, you can post 44¢ and see if the market comes to you. Our guide to limit and market orders explains when that works.
Can you get out before the game ends?
Yes, and at a market price rather than a sportsbook's cash-out offer. If you bought a team at 40¢ and it scores early, the price might rise to 60¢; you can sell and lock in 20¢ a contract. Novig lets you sell straight positions when there is enough activity in the market, but parlays can't be sold.
Do exchanges limit winning bettors?
Sportsbooks can cut the stakes of bettors who win consistently. An exchange has no house position to protect, so it doesn't limit you for winning. What does limit you is liquidity: a large order can only fill against what other traders are offering. Kalshi's football game contracts also carry a position accountability level of $25,000 per outcome per member.
Is a prediction market legal where sportsbooks aren't?
Kalshi and Novig are regulated by the Commodity Futures Trading Commission as designated contract markets. That federal status is how they reach states without legal sportsbooks. Several states argue their gambling laws still apply, and federal appeals courts have split on the question. Our guide to where you can trade has the details.
Frequently asked questions
Are prediction markets cheaper than sportsbooks?
Often. A standard -110/-110 sportsbook line holds about 4.5% of the money wagered. On Novig, a pregame straight trade carries no fee; on Kalshi the fee is at most about 1.75¢ per contract at a 50¢ price.
Can I get limited on a prediction market?
Exchanges don't limit winning traders the way sportsbooks do, because they don't take the other side of your trade. Contracts do have position accountability levels, and big orders are limited by how much other traders are willing to sell.
Can I cash out on a prediction market?
Yes. You can sell a straight position at the current market price at any time there is a buyer. Novig parlays can't be sold.
Sources
- Novig Support: Fees on Novig
- Kalshi Help Center: Fees
- Allium: Kalshi fees, why the cost peaks near 50 cents
- Kalshi: Football game contract terms
- Novig Support: How selling a position works
- CFTC press release 8302-20: Kalshi designated a contract market
- CFTC: Order designating Ludlow Exchange (Novig) a contract market
Facts that change, such as fees, rules and where each exchange operates, were checked on the date above. Check the exchange's own pages before you trade.
Sports Index Markets Every college football price in one place Novig and Kalshi side by side, with price history, strategies with graded records and the twice-weekly Betting Roundup. Open Markets →Keep reading
What are sports prediction markets?Sports prediction markets sell contracts on games that pay $1 if you are right. How they work, what prices mean and how they differ from sportsbooks.
Prediction market fees: Kalshi vs. NovigKalshi vs. Novig fees: trading fees by price, maker vs. taker, parlays, deposits and withdrawals, with a fee chart and a worked $100 example.
Limit orders vs. market ordersA market order fills now at the best price; a limit order waits for yours. How each works on Kalshi and Novig, and what happens at kickoff.
Sports Index publishes research and paper picks; it is not a sportsbook or an exchange and takes no bets. Trading on prediction markets risks real money. You must meet the exchange's age requirement and be in an eligible state. If gambling is a problem for you or someone you know, call or text 1-800-GAMBLER.