A growing shift among experienced bettors toward prediction market platforms is reshaping parts of the online wagering landscape, according to insights shared during a recent industry webinar hosted by Citizens analyst Jordan Bender.
Also participating were experienced bettors Isaac Rose-Berman and PY Research co-founder Canzhi Ye. They talked about the key differences between traditional sportsbooks and prediction markets.
The webinar highlighted that high-skilled bettors are increasingly shifting capital toward prediction markets due to fewer restrictions and greater flexibility.
Rose-Berman explained that major sportsbooks often limit or remove profitable users, while exchanges allow significantly larger deposits and trading activity, enabling users to act as market makers.
He said it is “convenient to be able to log on to Kalshi and deposit $50,000 or $100,000 and start market making in a way that I’m just not able to bet more than $50, $100, and anything more at a major sportsbook.”
He also noted: “You are able to go and then trade in a way that you wouldn’t on DraftKings and FanDuel and most sportsbooks. And so that’s very appealing for the high-value or high-skilled customers.”
Despite this advantage, in the eyes of both bettors, sportsbooks such as DraftKings and FanDuel offer a better user interface.
Rose-Berman, who has previously commented his support in favour of ending online casino gambling, states that most gamblers still prefer sportsbook interfaces unless they bet heavily or are already restricted.
Ye added that recreational users tend to respond more to marketing than platform mechanics.
Parlay-type markets give new life to prediction markets
One of the more technical discussions focused on Parlay Request-for-Quote systems, or RFQs, now emerging within prediction markets.
Ye explained that these systems allow users placing multi-leg bets to receive pricing directly from competing market makers.
This setup has, in some cases, resulted in slightly better pricing for recreational bettors compared to traditional sportsbook parlays, where margins are typically higher.
At the same time, RFQs introduce new dynamics for liquidity providers. Market makers can see who they are trading against, allowing them to filter out highly skilled or potentially “toxic” bettors.
Ye said this visibility enables behaviour similar to sportsbooks, where sharp accounts can be limited or avoided entirely, creating a more controlled risk environment.
He explained: “RFQs actually end up being pretty good for recreational bettors right now in terms of price; I don’t know if that is Kalshi’s intention, but yes, since there are a bunch of market makers competing for people who are placing parlays like often SGPs, we know the vig is super high on FanDuel and DraftKings.
“Market makers on Kalshi are basically willing to offer a little less vig to book this action. So customers are usually getting better prices on these bets through RFQs.”
However, Rose-Berman pointed to a potential conundrum if platforms internalise these functions, as reduced competition could weaken pricing efficiency while improving margins.
Sports driving prediction market success
Sports remain the dominant driver of activity across both models.
The panel agreed that the consistent schedule of sporting events sustains liquidity, unlike niche prediction categories such as weather that attract limited participation and often skew toward highly informed traders.
The discussion also addressed demographic trends. Prediction market platforms often reach younger audiences, who tend to have less money to spend.
Ye added that this will pay off later if the platforms can retain the users as their spending power increases.
Meanwhile, traditional operators are adjusting their prices due to ongoing increases in taxes.
Operators are also adjusting pricing strategies. Rising state taxes have led sportsbooks to increase margins, particularly in same-game parlays, while maintaining competitive headline odds.
A salient issue discussed was declining returns for bettors. Rose-Berman said profitable bettors now typically generate around 2-3% ROI, down from previous years.
He attributed this to stricter risk management and faster limitations on accounts engaging in arbitrage or exploiting pricing gaps.
Ye added that identifying where and when sportsbooks are less restrictive has become part of the strategy for bettors.
The spread of artificial intelligence (AI) is further tightening markets. Ye noted that more bettors are using AI models to analyse pricing, which is reducing inefficiencies and making “smarter” bettors.
He asserted: “Even if individuals aren’t necessarily spinning up and winning models right away, just more people trying it means there’s going to be some that actually do find an edge, and those people put their opinions into the market, and that contributes to edges being smaller and markets being more efficient.”