The Hidden Tax Inside Your Prediction Market App: March Madness Odds Compared
Across 5 NCAA Tournament video games, the pricing hole between the most effective and worst prediction market platforms was bigger than the hole between prediction markets and conventional sportsbooks. House take, the margin platforms construct in by pricing each side above true chance, ranged from 1.3% to eight.2% in our dataset. The increased the share, the extra the platform retains on each greenback wagered, no matter consequence.
I tracked odds throughout six prediction market apps and two conventional sportsbooks throughout 5 NCAA Tournament games throughout March 20–22, testing every thing from a 15-seed longshot to a near-coin-flip. The finest platform, Polymarket US, charged a home take of 1.3–1.6% throughout each sport — nicely under what conventional sportsbooks cost, and fewer than a 3rd of what most competing prediction market platforms extract. The worst performer hit 8.2% on an primarily even matchup.
Pricing hasn’t settled throughout prediction markets but, and the unfold is large sufficient to considerably have an effect on long-term anticipated worth. Here’s the place every platform falls.
A $15 wager that stated every thing
Round 1 | March 20 | Furman (15) vs. UConn (2)
The experiment began as a aspect wager on my alma mater. I used to be going to wager on 15-seed Furman in opposition to UConn regardless — would possibly as nicely see what the apps had been providing.
The unfold was jarring. Across six prediction market platforms, Furman’s efficient moneyline ranged from +1,895 (Polymarket) to +1,150 (DraftKings and OG.com, a standalone predictions app from Crypto.com), a distinction of 745 odds factors on the identical wager. On $15, that’s the distinction between netting $284 and $172. Polymarket paid 65% extra in revenue on the identical stake.
The starkest comparability, nevertheless, concerned no unfold in any respect. FanDuel Sportsbook provided +2,000, a $300 web on $15. Meanwhile, FanDuel Predicts confirmed the identical $300 payout on display screen, however solely after a $6 charge on prime* of the $15 wager, for a complete price of $21. That charge pushed the efficient odds to +1,329. Same model, similar quantity on the display screen, however a wildly completely different deal.
| Platform | FUR Eff. Odds | Cost → Payout |
|---|---|---|
| FanDuel Sportsbook | +2,000 | $15 → $315 |
| Polymarket | +1,895 | $14.99 → $299 |
| Kalshi | +1,773 | $15 → $281 |
| Gemini | +1,487 | $15 → $238 |
| FanDuel Predicts | +1,329 | $21* → $300 |
| DraftKings Predictions / OG.com | +1,150 | $14.96 → $187 |
Important word: DraftKings Predictions’ displayed value implied higher odds than what really executed, signaling a possible liquidity downside on a lopsided market. The displayed odds of +1567 ought to have produced a possible payout of $250.05, not $187.
For clients, it’s value noting that the displayed value and the executed value aren’t all the time the identical factor. That hole on smaller and/or newer apps and is value watching as these platforms scale.
Game 1: Louisville vs. Michigan State
Round 2 | March 21 | Louisville (6) vs. Michigan State (3) | No sportsbook on this seize
| Platform | LOU Eff. Odds | MSU Eff. Odds | House Take |
|---|---|---|---|
| Polymarket | +202 | -217 | ~1.6% |
| Kalshi | +189 | -233 | ~4.5% |
| DraftKings Predictions / OG.com | +194 | -245 | ~5.0% |
| FanDuel Predicts | +186 | -233 | ~5.0% |
| Gemini | +180 | -256 | ~7.6% |
The hierarchy that will maintain all weekend established itself instantly: Polymarket alone on the prime, a cluster within the 4.5–6% vary, and Gemini on the backside. DraftKings and OG’s Louisville value (+194) was first rate, however their Michigan State line (-245) was the worst favourite value aside from Gemini. That cut up pricing inflated the general take regardless of aggressive underdog odds.
Game 2: Miami FL vs. Purdue
Round 2 | March 22 | Miami FL (7) vs. Purdue (2) | Closest seize: 6 min pre-tip
| Platform | PUR Eff. Odds | MIA Eff. Odds | House Take |
|---|---|---|---|
| Polymarket | -321 | +299 | ~1.3% |
| Gemini | -345 | +296 | ~2.8% |
| Kalshi | -345 | +280 | ~3.8% |
| FanDuel Sportsbook | -317 | +260 | ~4.5% |
| FanDuel Predicts / DraftKings Predictions / OG.com | -355 | +270 | ~5.0% |
| Hard Rock Bet | -375 | +275 | ~5.6% |
The one sport the place Gemini, the crypto trade that launched prediction markets in December, regarded aggressive with 2.8% take, second solely to Polymarket. On lopsided markets, Gemini’s value compression issues much less as a result of one aspect is deeply discounted: its Miami value (+296) was genuinely good.
Hard Rock posted -375 payout odds on Purdue, that means bettors backing the favourite paid extra vig than on another platform within the dataset. For Florida customers, whose solely licensed sportsbook different is Hard Rock below the Seminole gaming compact, prediction market pricing in comparison with the sportsbook is especially consequential. This sport illustrated each why and the way a lot it may have an effect on potential payouts.
FanDuel Sportsbook’s -317 on Purdue was the most effective favourite value throughout all platforms, the one sport the place the normal sportsbook was the one finest place to again the favourite. But it’s not accessible to Florida clients.
Game 3: St. John’s vs. Kansas
Round 2 | March 22 | St. John’s (5) vs. Kansas (4)
| Platform | SJU Eff. Odds | KU Eff. Odds | House Take |
|---|---|---|---|
| Polymarket | -164 | +156 | ~1.3% |
| FanDuel Sportsbook | -162 | +134 | ~4.5% |
| Kalshi | -175 | +145 | ~4.5% |
| Hard Rock Bet | -190 | +155 | ~4.7% |
| FanDuel Predicts / DraftKings Predictions / OG.com | -178 | +144 | ~5.0% |
| Gemini | -185 | +138 | ~6.9% |
Near-even video games are the place overround, or home take, begins to sting hardest. On an in depth matchup there’s no lopsided favourite to soak up the fee; each side are priced close to even cash, so the total margin hits each bettor no matter which aspect they’re on.
Polymarket’s favourite value (-164) was almost similar to FanDuel Sportsbook (-162), displaying alignment on the favourite pricing. But Polymarket’s Kansas underdog odds (+156) had been 22 factors higher than FanDuel Sportsbook’s (+134). Close video games reveal a constant sample: Polymarket is aggressive on favorites and superior on underdogs.
Game 4: Texas Tech vs. Alabama
Round 2 | March 22 | Texas Tech (5) vs. Alabama (4)
| Platform | TTU Eff. Odds | ALA Eff. Odds | House Take |
|---|---|---|---|
| Polymarket | -109 | +104 | ~1.3% |
| Kalshi | -116 | -103 | ~4.5% |
| FanDuel Sportsbook | -113 | -106 | ~4.5% |
| Hard Rock Bet | -105 | -115 | ~4.7% |
| FanDuel Predicts | -117 | -104 | ~5.0% |
| DraftKings Predictions / OG.com | -113 | -108 | ~5.0% |
| Gemini | -120 | -115 | ~8.2% |
On a coin flip, Gemini’s 8.2% take isn’t simply costly — it’s mathematically punishing. Both sides at minus cash means a bettor loses cash in the long term even choosing the winner half the time. Hard Rock was the one platform that priced Alabama as the favourite, which produced the most effective Texas Tech value within the dataset (-105) and the worst Alabama line (-115).
The common developments of Polymarket because the clear winner and a lot of the others grouping between 4.5-5% holds up throughout the set. The large selection in particular workforce pricing is stark right here, a superb reminder of the advantages of cross-platform comparability relying which aspect you’re taking.
What the information exhibits about prediction market pricing
The platform hierarchy was strikingly steady throughout 4 video games, completely different odds environments, and completely different days. Polymarket led each sport at 1.3–1.6%. Kalshi was a constant second often round 4.5%, higher than the sphere however 2.9–3.2 proportion factors behind Polymarket.
The most telling sample: FanDuel Predicts, DraftKings Predictions and OG.com landed at precisely 5.0% in each single sport, regardless of working fully completely different fee structures, with FanDuel itemizing charges explicitly on prime of the wager and the others baking them into the value. Identical overround throughout 4 video games and two completely different pricing mechanisms factors to deliberate margin-targeting, not coincidence. Rather than competing on value, these platforms look like coordinating round a quantity. FanDuel and DraftKings additionally both route markets from CME Group, although DraftKings additionally affords markets from Crypto.com, the dad or mum trade of OG. So there are some connections amongst this group.
Gemini ranged from aggressive on blowouts to punishing on shut video games. Its 2.8% on Purdue/Miami and eight.2% on Texas Tech/Alabama symbolize the widest efficiency swing within the dataset. Given that its a brand new product inside its crypto buying and selling platform, and never sharing liquidity with one other DCM, low liquidity is still likely an issue.
One of the extra stunning findings was FanDuel Sportsbook posted 4.5% throughout each sport the place I tracked it, which is according to Kalshi and higher than 4 of the six prediction market platforms within the set. While the trade has claimed prediction markets beat sportsbooks on pricing, this information snapshot means that it is dependent upon the trade (and the sportsbook). Our findings clearly present that the finest prediction market value beats every thing, and the worst ones aren’t any higher than some sportsbook pricing.
For anybody putting significant quantity, the selection of platform is a serious difference-maker to your backside line. At 8.2% versus 1.3% on an excellent sport, you’re giving again roughly $70 on each $1,000 wagered simply in structural margin, earlier than a single unhealthy choose. Compounded throughout each commerce, each sport, and each season, one can think about the hit to a bettor’s long-term P&L assertion.
Methodology notes
Effective odds had been calculated from precise transaction screens — price to payout — relatively than displayed costs. The system: web revenue ÷ precise price × 100, expressed in American odds format. For conventional sportsbooks, efficient odds equal the posted moneyline.
House take (additionally referred to as overround or vig) measures how a lot of every greenback wagered the platform retains, on common, throughout each side of a market. A good, zero-margin market sums to precisely 100% implied chance. The extra over 100% is the home take.
Fee dealing with: FanDuel Predicts explicitly itemizes charges on prime of the said wager; I used whole price (wager + charge) because the denominator for all calculations. All different prediction market platforms bake charges into the value.
Platforms examined: Polymarket, Kalshi, FanDuel Predicts, OG.com, Gemini, and DraftKings Predictions (Round 1 solely), plus Hard Rock Bet and FanDuel Sportsbook as conventional benchmarks. Games had been chosen to cowl heavy favorites, reasonable favorites, and near-even matchups.
Location: All screenshots on this piece had been captured from inside Florida. Unlike most authorized betting states the place a number of licensed sportsbooks compete for what you are promoting, Florida bettors have primarily one conventional choice: Hard Rock Bet, working below the Seminole Tribe’s gaming compact. Prediction market platforms, regulated on the federal degree by the CFTC, are accessible statewide.
All odds had been captured inside the similar platform session, upfront of tipoff. Capture home windows ranged from roughly 6 to 37 minutes earlier than tip, and all screenshots for a given sport had been captured inside a span of 20 minutes. The Furman/UConn sport was a single-sided trial and isn’t included in cross-platform home take comparisons.
Data is for informational and observational functions solely and isn’t betting recommendation.
The submit The Hidden Tax Inside Your Prediction Market App: March Madness Odds Compared appeared first on DeFi Rate.
