Is a prediction market just sports betting by another name?

Not exactly, but they overlap a lot. The mechanics differ, and so do the rules, yet on the biggest US platforms a large share of what people trade is sports. Understanding both the difference and the overlap is the honest answer.

Start with how a traditional bet works. A bookmaker accepts and pays out bets at agreed-upon odds. It does not generally try to make money from the bets themselves, but acts as a market maker and profits whatever the outcome, mainly through a fee called the vigorish, or vig, built into the odds. In an example, a winner who risked $110 to win $100 collects $210 from the $220 in the pot, and the sportsbook keeps the remaining $10.

A prediction market works differently. Its contracts are binary: they resolve on whether an event happens, and traders buy and sell them through an order book, so the price is set by traders rather than by a house. Kalshi, for example, runs a centralized order book as a designated contract market regulated by the federal Commodity Futures Trading Commission, the CFTC.

But look at what people actually trade. In 2025, sports betting made up more than 90 percent of activity on Kalshi, and as of October 2026 a reported 63 percent of trades on Polymarket were sports bets. Some users are disappointed by that. The National Council on Problem Gambling in the United States has described prediction markets as having similar risks to sports betting, and as of October 2026 US courts were still split over which rules apply.