Sportsbooks vs prediction markets

Pulse puts two different worlds side by side. Both show “odds”, but they work differently, and you bet on them differently. If you don’t get the difference, the first arb will confuse you.

Sportsbooks: you play against the house

This is what everyone pictures when they hear “betting”. The bookmaker sets a price, you take it or walk away. Your opponent is the venue itself, and it earns on the margin we worked out in Odds, probability and margin.

Pulse watches these sportsbooks: Pinnacle, Stake, Parimatch, Dexsport, Shuffle, Duel, CSGOEmpire, Bookmaker.xyz, Bet105, Gamdom, Reels.

• The familiar format: decimal odds on an outcome.
• Money on the account is fiat on some, crypto on others. It depends on the bookmaker, see Venues.

Prediction markets: you play against other people

There’s no house here. It’s an exchange: you buy a share of an outcome from another person. The share price is the probability, just in cents. A share at 53¢ means “the market puts this at 53%”. If you’re right it pays out $1, if not it’s worth nothing.

Pulse watches these prediction markets: Polymarket, Kalshi, Predict.fun.

• Trading is in crypto, usually stablecoins.
• A price in cents converts to normal odds easily:

odds = 1 / (cents / 100)

53¢ → 1 / 0.53 ≈ 1.887

Why this matters for your profit

Two different ways of setting prices means they drift apart more often, and further. A bookmaker moves its line by hand and by its own models. An exchange moves with real money from its users. That’s why arbs between the two worlds are usually fatter than arbs between two bookmakers.

And an exchange doesn’t cut you for winning. It doesn’t care how much you make, it takes a fee on volume. Bookmakers are another story, see Limits and restrictions.

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