What Are the Similarities and Differences Between the Best Online Casino, Betting, And Prediction Market Platforms?

There are new kids on the block.

Unless you have been living under a rock since the start of the year, the chances are that you will probably have heard of prediction market platforms like Kalshi and PolyMarket. They have transformed the US gambling market despite not even being gambling platforms. While that might sound contradictory, it is true. They allow users to back a hunch with a real-money proposition, but these propositions are financial derivative trades in the eyes of the law and the CFTC (Commodity Futures Trading Commission).

While many US states are unhappy about the incursion into what they regard as their jurisdiction, the CFTC is suing states like Wisconsin over their attempts to assert felony violations of state law. It is all pretty high-stakes stuff. Maybe someone should open a trade on whether state or federal regulators will triumph. For now, the odds seem to favor the federal authority.

Feeling confused?

You might be feeling quite confused. After all, it is not so long ago that PASPA's federal ban on sports betting was overturned, and it was decreed that states are in charge of their own gambling laws. While the following years have not been free of controversy, gambling and betting are no longer taboo subjects in most US states. Everything seemed to be aligning, with more states than ever before considering allowing online casino gambling and sportsbooks. We wanted to find out more about the similarities and differences between the different sectors, so we invited online betting expert Roy Brindley from Online-Casinos.com to come and share his insights with us.

Hi Roy, welcome to Betmentor.com. It does seem that prediction markets have rather thrown the cat amongst the pigeons. Before we dive deeper into what and why, could you tell us a bit more about yourself and the platform you work for?

Roy Brindley:

Sure, I am an author at Online-Casinos.com, a professional gambler, and commentator. I have won televised poker tournaments, written for major publications, and now share my expertise in sports betting, analytics, and gaming strategy. I’ve been in the gambling industry in one way or another since before the birth of the Internet. Our website aims to provide expert information and recommendations for players across the globe. We are part of the international iGaming.com Group, covering 44 countries, and we endeavor to help our readers make good choices.

Thanks, Roy. If you are a gambling expert and your site covers gambling, why are you interested in prediction markets?

Roy Brindley

While prediction markets are not technically or legally gambling sites, they share enough in common with traditional iGaming and sportsbook platforms to warrant my scrutiny. There are so many similarities that we think 'traders' need the same assistance as any online players or gamblers. Prediction markets are dominating the conversation in the US because the gambling market is so fragmented there. Many US residents have not previously been able to legally bet, so they can get caught out if they are not familiar with the scene.

What are the similarities?

Roy Brindley

Prediction market apps are similar to sports betting platforms and almost identical to betting exchanges, which the UK has had since the turn of the century. In short, they allow users to place money on the outcome of a real-time future event. They have a form of odds (although they are calculated differently). The operators use bonuses and promotions to attract users to trade on their platforms. 

What are the differences?

Roy Brindley

Well, being brutally honest, they are nothing like as much fun as online casinos! Online casinos are a form of entertainment, and the games are designed to be fun and rewarding. Prediction market platforms are trading platforms, and they feel very business-like – because, essentially, that is what they are. While many people can get a thrill out of the chance to 'win' or 'earn' some money by being right, online casino games are about the thrill of the moment. 

While sports betting can also be very cut-and-dried, there is much more variety and opportunity for entertainment in how betting is designed. Prediction markets only offer binary YES / NO options. While the trades can be cleverly worded to yield YES/NO outcomes, they are linear. While they offer a broad range of subjects like sports, politics, culture, and economic events, they do not have the same depth. You will not find niche sports or fun games on their menus.

How do prediction markets work

Roy Brindley

Unlike conventional sportsbooks, where the odds are set by the 'bookie,' and the platform makes its money from the house edge, prediction markets are trading platforms where traders buy and sell YES and NO outcomes. The trades cost between $0 and $1. The market sets the price, and the platform makes its money through additional fees. Once the event's outcome is known, the trades are settled. If a trader bought a YES outcome for $0.60 and the outcome is YES, the trader would get $1 per trade and make a gross profit of $0.40. The trader who had bought the NO would not get any return!

Could you explain a bit more about the US gambling landscape and where prediction markets fit in?

Roy Brindley

It always comes as a bit of a surprise to people outside of the US that the country that is home to Las Vegas has such an odd relationship with gambling and casino gambling in general. Only a handful of states allow their residents to play online casino games for real money, which has led to an active social and sweepstakes online casino market where people can play for virtual currencies. However, some states, such as California and New York, have cracked down on sweepstakes. In New York, it is hoped that this is because they might soon legalize real-money online casinos, and in California, it is mostly about protecting land-based assets. 

Online sports betting is much more available, but it is still not accessible to residents of many states, including populous ones like Texas and California. Prediction markets now allow all US citizens to legally predict the outcome of future events like football and back them with real money. Prediction markets are parallel and not a replacement. In states where online sportsbooks are available, companies like DraftKings, which offer both prediction and sportsbook services, only offer predictions on non-sporting events!

 Thanks, Roy – so to sum it up, online casinos are more fun!

Roy Brindley

Yes, that's it, but then I could be a little bit biased!