A sportsbook and a prediction market can both let you bet on the same outcome. The difference that matters most for your bottom line is how each one charges you. A sportsbook hides its margin in the price; a prediction market charges a smaller, explicit fee. Here's how the two models compare.
The sportsbook model: vig in the price
A sportsbook quotes a coin-flip market — a spread or total — at −110 on each side instead of even money. Each −110 side implies about 52.4%, so the two sides sum to roughly 104.8%. That extra ~4.8% is the hold — the book's built-in margin, paid by everyone, baked invisibly into the price.
You never see a separate line item. The cost is the gap between the price you got and the fair no-vig price. On a standard market that gap is about 4.76% of the market.
The prediction market model: an explicit fee
A prediction market works differently. The price sits near the true probability — a coin flip trades around 50¢, not at a marked-up line — and the venue charges a separate trading fee on top. Because it's itemized rather than baked in, you can see exactly what you're paying.
That fee is generally a small fraction of the contract — usually well under 2%, largest on near-50¢ markets and smaller toward the extremes. The exact amount varies by venue and by market, so treat any single figure as an estimate and check the live order ticket. The fee calculator estimates it for a given price and quantity using the standard formula.
Side by side, on a coin flip
Say you want to back a true 50/50 outcome:
- Sportsbook: you take −110. The fair price is +100, so you're paying roughly 4.5–4.8% to the house, embedded in that −110.
- Prediction market: you buy at about 50¢ (near fair) and pay a separate fee that, on a standard schedule, lands around 1–2% of the contract.
On cost per bet, the market's cut is generally the smaller of the two. Over hundreds of bets that difference compounds — which is a big reason cost-conscious bettors have shifted volume toward prediction markets. (This is a structural comparison, not a guarantee about any specific market; always price the actual bet.)
Beyond cost: the other differences
- Selling early. Prediction market contracts trade — you can sell before the event settles, for more or less than you paid. A sportsbook bet is usually locked unless the book offers a cash-out (at its own marked-up price).
- Probability, directly. A market price is the implied probability with no vig to strip. See Kalshi cents to odds.
- Account treatment. Sportsbooks may limit or restrict winning bettors; an exchange-style market matches buyers and sellers and doesn't have the same incentive to cut off sharp customers.
- Selection & familiarity. Sportsbooks still offer more markets, promos, and a more familiar interface for casual bettors.
A fair caveat
"Cheaper per bet" isn't the whole story. Liquidity can be thinner on niche prediction markets (a wide bid-ask spread is its own cost), withdrawal and funding frictions differ, and fee schedules change. This page compares cost models, not a fixed head-to-head — the honest move is to price the specific bet on both before you decide. PlainOdds doesn't give betting advice; it gives you the math to do that.