Kalshi’s NFL Debut Reveals Pricing Disadvantage Against Sportsbooks

Prediction-market operator Kalshi entered the NFL season with promises of sharper pricing, thanks to its novel exchange-based model. However, recent data from Citizens JMP Securities suggests that retail bettors may not be enjoying the price advantage they expected when signing up with the platform. Even so, Kalshi’s other features may be enough to win over potential customers.

Fees for Casual Bettors Add Up

A recent report by news outlet Next.io uncovered Citizens JMP data as analysts tracked Kalshi’s markets during the NFL Week 1 season and matched them against the odds from leading sportsbooks DraftKings and FanDuel. The results showed that the Kalshi-money line and over/under contracts priced consistently worse than those of the two major betting platforms once transaction fees were accounted for.

On Friday, before any of the games commenced, money line odds for Kalshi were roughly 10% more expensive than those from DraftKings and about 16% worse than those from FanDuel. For over/under bets, Kalshi was charging nearly 25% and 23% more than DraftKings and FanDuel, respectively. Kalshi still lagged behind the competition as lines tightened before kickoff on Sunday.

According to the Citizens report, Kalshi’s fee structure is the deciding factor behind this discrepancy. Retail traders pay on a per-contract basis, averaging $1.63 for 100 money line contracts and $1.75 for over/under positions. In these cases, the charge, though not hefty on its own, erodes the benefit of exchange-style pricing for casual bettors. While institutional players and market makers can receive better rates, ordinary users see no such benefit.

The Platform Faces Rising Challenges

Kalshi often pitches its cash-out feature as one of the major selling points for the exchange. However, Citizens pointed out that the system has significant limitations. In traditional sportsbooks, early settlement is most valuable for parlays, where players may want to secure profits before the final leg. Kalshi, however, only offers limited parlay-style wagers, reducing the appeal of the feature.

The Citizens report concluded that Kalshi poses little immediate competitive threat to established sportsbooks in regulated states. However, these limitations have not dampened the platform’s expansion ambitions. Kalshi recently introduced new products, such as point spreads, over/unders, and touchdown props, bringing its offerings closer than ever to those of traditional sportsbooks.

Despite Kalshi’s recent advances, the platform faces immediate legal challenges. Several tribes have filed lawsuits against the exchange, accusing it of running illegal sports gambling operations on tribal lands. The plaintiffs argue that Kalshi’s contracts on sports events are indistinguishable from the services offered by traditional sportsbooks and must be regulated accordingly.