Kalshi converts parlays into low margin exchange
Kalshi
The key point is that Kalshi is turning the sportsbook industry’s fattest product into a low margin exchange product. In a normal sportsbook, parlays are so profitable because the book sets each leg’s price and keeps the spread. On Kalshi, parlays sit on top of market prices and exchange fees, so almost $948M of Q4 parlay volume produced only $3.7M in fees, while sportsbooks in states like Illinois have seen parlays contribute more than half of monthly revenue.
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The mechanical difference is who takes risk. DraftKings and FanDuel act as the house, they write the odds, bundle legs, and keep the hold when bettors lose. Kalshi mostly matches buyers and sellers, charges taker fees, and does not need parlay outcomes to break in its favor to make money.
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That makes parlays a user growth tool more than a profit center. Same game parlays are one of the stickiest sports betting formats because they let users turn one game into a multi leg bet. Kalshi can copy that behavior and gain share, but with exchange economics instead of sportsbook economics.
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The tradeoff is lower revenue per dollar wagered, but much broader legality. Kalshi processed $22.88B of 2025 volume at about a 1.2% overall fee rate and could offer sports nationwide under CFTC regulation, while traditional sportsbooks still depend on state licenses and use parlays to lift revenue margins inside each approved state.
Going forward, the battleground is whether prediction markets can keep taking sports betting share while staying structurally cheaper than sportsbooks. If Kalshi keeps adding distribution and liquidity, parlays will likely remain a major volume driver, but the bigger prize is proving that an exchange can win users without relying on the high parlay hold that powers incumbent sportsbook profits.