Polymarket has been slow to launch its US platform since gaining regulatory approval last year.
It stayed in beta mode for around six months before going fully live in May. The platform could start to catch up to its rivals now, as it prepares to launch parlays, which are currently the most-traded markets on Kalshi. Kalshi is now looking to monetize the growth of its combos. The operator will start charging fees from August 20.
Polymarket first self-certified parlays in May, or as they named them, “Combinatoric Athletic Outcome Contracts.” The company has not yet released the markets to the general public, but thousands of multi-leg trades were placed last week on its beta platform.
The first parlay was processed on August 5. Since then, combos have attracted around $7.4 million in volume. According to Polymarket US’s API documentation, the markets are still in beta testing. Currently, users on the site’s beta can make parlays of up to 10 legs.
Kalshi Combos Dominate Trading Volume
Kalshi offers users the chance to make combos involving more than 30 legs. The vertical has taken off in the past few months and, in the last seven days, has led the site in trading volume.
Combos attracted $3.5 billion in trading over the past week, more than individual sports markets ($2.9 billion) and crypto ($1.5 billion). Since the start of the year, parlays have accounted for just over 30% of the volume, totaling $47.9 billion.
It is important to note that volume is not the same as betting handle, a distinction that is particularly relevant for parlays, which often offer high-potential returns for low stakes. For example, if a user wagers $1 on a parlay that could return $100, that will be processed as $100 in volume, but only $1 changes hands when the parlay inevitably loses.
Parlays a Key Driver for Company Profits
Parlays are a key driver of revenue for sportsbooks. In Maryland, for example, they accounted for 38.5% of betting handle, but 68.5% of revenue. On average, the hold for sportsbooks is 5.7% on single stake wagers, but rises to 18.8% for parlays, as detailed recently in the Closing Line.
“Sportsbooks, like casinos, are awfully good at providing what their customers want,” The Closing Line noted. “In this case, it’s a little ‘skin in the game’ in the form of a long-shot bet that offers a small chance at a big lottery-style payout. For most casual bettors, the entertainment and the opportunity are well worth the cost of the ticket — usually just a few bucks.”
There remains debate over whether parlays are a good form of entertainment or a sucker bet that is a cash cow for gambling companies.
Kalshi to Start Charging Fees on Parlays
Both things may be true. And Kalshi is looking to cash in on the popularity of parlays. From this week, the operator will begin levying fees on market makers that offer liquidity for the wagers.
Parlays function on Kalshi when users submit a Request For Quote (RFQ) on multiple markets. Market makers respond by offering up liquidity on the wagers.
Up until now, to encourage market makers to provide liquidity, Kalshi has not charged makers fees on transactions. However, that will change from August 20. The company self-certified an amendment to its fee schedule with the CFTC last month.
It remains to be seen whether this will affect the amount of liquidity market makers are willing to provide on combos. Kalshi has faced accusations that it is accepting a large portion of the trades through its affiliated trading arm, Kalshi Trading, and institutional partners, which may have more favorable fee rates agreed.
The offering of parlays has also been cited in judgments against Kalshi. In Connecticut, when denying the company an injunction, a judge said there was “no independent financial, economic, or commercial consequence at all” to parlay wagers.
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Polymarket has been slow to launch its US platform since gaining regulatory approval last year. It stayed in beta mode for around six months before going fully live in May. The platform could start to catch up to its rivals now, as it prepares to launch parlays, which are currently the most-traded markets on Kalshi.
The post Polymarket Launching Parlays in US, as Kalshi Looks to Cash in on Combos appeared first on CasinoBeats.