- Parlays now account for more than 20% of Kalshi’s weekly sports trading volume, up from less than 1% at launch.
- Unlike sportsbooks, where parlays are a primary profit driver, prediction markets see limited margin benefit from increased parlay activity.
- Operators including DraftKings and FanDuel are investing to close that gap and replicate sportsbook economics.
Parlays are surging on Kalshi, but America’s favorite bet isn’t yet delivering prediction markets the lift that made sportsbooks profitable.
Parlays on Kalshi have grown from a negligible share of trading activity in the fall of 2025 to more than 20% of weekly sports volume during the opening week of March Madness, marking a new high since the product launched, according to data compiled by Legal Sports Report.
In the first 11 weeks after Kalshi introduced its “combos” feature in late September 2025, parlays accounted for less than 5% of sports trading volume. That changed in mid-December, when activity jumped into double digits for the first time during the peak of the NFL season.
Since the new year, parlays have hovered around 16% of weekly volume before breaking out again during March Madness, hitting 20.24% in the week of March 15, one of the busiest betting stretches of the year.
On prediction markets, however, the same growth has not translated into stronger economics. Closing that gap is now a central focus for operators like DraftKings and FanDuel as they expand into prediction markets and look to replicate sportsbook-level margins within a lower-cost model.
Parlay activity surges on Kalshi
| Week | Sports Volume | Parlay Volume | Parlay % of Sports | Parlay Markets |
| Sept 28–Oct 4 | $856,264,250 | $2,253,142 | 0.26% | 3,548 |
| Oct 5–11 | $897,724,705 | $8,053,828 | 0.90% | 9,364 |
| Oct 12–18 | $837,955,626 | $16,119,788 | 1.92% | 21,717 |
| Oct 19–25 | $991,937,406 | $26,890,388 | 2.71% | 30,739 |
| Oct 26–Nov 1 | $1,058,691,311 | $30,461,969 | 2.88% | 33,551 |
| Nov 2–8 | $1,089,750,671 | $35,922,962 | 3.30% | 38,126 |
| Nov 9–15 | $1,103,703,010 | $41,131,621 | 3.73% | 42,040 |
| Nov 16–22 | $1,070,040,143 | $42,490,888 | 3.97% | 54,580 |
| Nov 23–29 | $1,412,013,268 | $40,775,261 | 2.89% | 85,286 |
| Nov 30–Dec 6 | $1,149,007,028 | $22,048,506 | 1.92% | 83,733 |
| Dec 7–13 | $1,091,290,635 | $27,007,236 | 2.47% | 86,631 |
| Dec 14–20 | $1,428,242,686 | $148,395,351 | 10.39% | 121,517 |
| Dec 21–27 | $1,608,647,640 | $247,546,446 | 15.39% | 180,055 |
| Dec 28–Jan 3 | $1,799,584,021 | $201,570,115 | 11.20% | 150,253 |
| Jan 4–10 | $1,773,952,127 | $204,311,659 | 11.52% | 158,027 |
| Jan 11–17 | $1,989,012,416 | $356,245,430 | 17.91% | 211,914 |
| Jan 18–24 | $1,912,319,258 | $307,876,244 | 16.10% | 248,963 |
| Jan 25–31 | $2,059,681,307 | $347,594,783 | 16.87% | 313,443 |
| Feb 1–7 | $1,822,658,186 | $295,161,964 | 16.20% | 316,796 |
| Feb 8–14 | $2,375,942,910 | $389,885,041 | 16.40% | 321,428 |
| Feb 15–21 | $2,156,849,187 | $256,651,294 | 11.90% | 446,655 |
| Feb 22–28 | $2,258,060,014 | $353,690,604 | 15.66% | 410,725 |
| March 1–7 | $2,376,899,026 | $406,327,834 | 17.10% | 496,521 |
| March 8–14 | $2,570,623,103 | $444,847,601 | 17.30% | 667,933 |
| March 15-21 | $2,860,205,127 | $578,844,606 | 20.24% | 576,444 |
Parlays provide outsized returns to sportsbooks
The stakes of that gap are visible in the sportsbook data.
Over the past 12 months, parlays accounted for 32% of handle in New Jersey but generated 65% of revenue, according to data compiled by LSR. In Maryland, the ratio was 36% of handle to 63% of revenue. Illinois showed a similar pattern at 31% and 61%. Colorado came in at 26% and 47%.
While operators do not break out hold by bet type, the data suggests parlays typically generate hold rates around 20%, roughly four times higher than straight bets. Hold refers to the percentage of wagers that sportsbooks keep as revenue after payouts. That shift has coincided with the industry’s move to profitability as both DraftKings and FanDuel have pointed to higher parlay mix as a key driver of margin expansion.
It helps explain the market reaction when Kalshi introduced its “combos” product in late September. DraftKings shares fell about 12% and Flutter Entertainment dropped roughly 10% in the days following the launch, as investors viewed the move as a direct threat to one of the industry’s most lucrative products.
But the structure that allows Kalshi to operate outside traditional sportsbook frameworks also limits how much it can benefit from that demand.
Kalshi parlay growth does not equal margin
Unlike sportsbooks, which act as the house and build margin into every bet, prediction markets operate as exchanges where users trade against each other. Kalshi CEO Tarek Mansour has described the model as a “fair game,” with participants trading positions rather than betting against an operator.
Kalshi generates most of its revenue through transaction fees rather than hold, so parlay activity does not inherently increase margins the way it does for sportsbooks. In practice, Kalshi earns roughly the same fee — about 1% — on a trade whether it’s a parlay or a straight bet, regardless of outcome. Sportsbooks, by contrast, might hold around 5% on a straight bet and 20% or more on a parlay.
It also introduces operational constraints. Each additional leg requires pricing across multiple markets and sufficient liquidity to complete the trade. Rather than generating odds internally, Kalshi routes custom combinations through a request-for-quote system, where market participants price the other side. Each combo effectively functions as its own market, with pricing dependent on available counterparties. More complex combinations may not always fill at scale or at consistent prices.
Same-game parlays add another layer of difficulty. Consider a four-leg NBA same-game parlay combining a spread, a total, and two player props: because those outcomes are correlated, they are even harder to model within a system built on independent contracts. Beyond correlation, sportsbooks adjust odds in real time and maintain a built-in edge as games unfold, while prediction markets rely on participants to update prices.
Sportsbooks race to rebuild the model
That gap is now driving a new phase of competition and a high-stakes bet.
DraftKings and FanDuel are not just investing in prediction markets to expand distribution, they are betting they can use them to rebuild the economics of sports betting, even as their future remains uncertain. More than 30 states have taken legal action against sports event contracts, and some have warned sportsbook operators that offering those products could put their betting licenses at risk. At the same time, leagues such as MLB have shown a greater willingness to engage with the space, while federal regulators are moving toward establishing formal rules.
DraftKings launched its prediction product across 38 states in December through a partnership with CME Group. It is now working to migrate that offering onto its own exchange, Railbird, which it acquired for roughly $250 million and build internal market-making capabilities on top of that infrastructure. CEO Jason Robins has described it as a second revenue engine that would generate both transaction fees and trading profits.
FanDuel’s parent company Flutter is taking a similar approach. It launched FanDuel Predicts in December, also through CME Group, and plans to spend an extra $200 million to $300 million on prediction markets just this year alone.
CEO Peter Jackson has told investors FanDuel will pursue the opportunity aggressively, citing Flutter’s ownership of the world’s largest sports betting exchange as a structural advantage. To support that effort, Flutter has shifted personnel from Betfair exchange over to the FanDuel team to build out the product and underlying infrastructure.
DraftKings, FanDuel run familiar playbook
The strategy mirrors an earlier phase of the U.S. sports betting market that helped DraftKings and FanDuel establish their duopoly.
Each spent years building proprietary technology stacks to control pricing and risk, moving away from third-party platforms to own their economics. That shift enabled the rollout of same-game parlays and other high-margin offerings that ultimately drove profitability.
When PASPA fell in 2018, DraftKings was running its sportsbook on Kambi, a third-party platform it did not control. Robins quickly recognized that outsourcing the core technology stack limited both product development and margin. In December 2019, the company announced a tri-merger with SBTech and a SPAC, beginning a full migration to its own in-house platform. “Having control of our vertical product, tech stack, or trading … was a critical thing for us,” Robins said at the time.
FanDuel benefited from a parallel advantage through Flutter’s ownership of Betfair, which brought deep experience in pricing and risk management. That combination of proprietary technology and trading expertise helped both companies move faster than competitors, refine high-margin products, and strengthen their hold on the market.
Both companies have solved hard structural problems before by owning the product. The difference this time is what those systems need to solve. It requires finding ways to price, package, and scale parlay-style products within an exchange-based system.
Whether that formula works remains an open question. Regulation is still evolving, and exchange-based models impose constraints that technology alone may not solve. That will determine whether prediction markets become a meaningful second revenue stream or primarily remain a distribution play.
Data Analyst Eric Ramsey contributed to this report.
