Citzens: Kalshi’s NFL pricing “more expensive” than major sportsbooks on Sunday

Kalshi’s pricing for NFL betting across the first weekend of the new season was “more expensive” than major US sports betting operators, according to research from investment bank Citizens.

Kalshi announced the launch of touchdown prop markets, point spreads, and totals in August – a significant expansion of its sports event contracts offering. 

For the first weekend of the season, Citizens tracked odds operator pricing across the NFL games for FanDuel, DraftKings, and Kalshi for moneyline and over/under lines (30 data points).  

The research showed that pricing on Kalshi for the moneyline and over/under markets was 10% and 25% more expensive on Friday, respectively, compared to DraftKings.

Kalshi’s platform was 16% and 23% more expensive compared to FanDuel for the moneyline and over/under, respectively, on the same day.

Before kick off on Sunday, pricing tightened between the traditional sportsbooks and Kalshi, although the average of the mone line was still 7% more expensive compared to the two leading spoetsbooks, with over/under 10% more expensive. 

The research also noted that Kalshi charges a transaction fee for every contract traded on its platform. That equates to $1.63 for 100 moneyline contracts on average, and $1.75 for over/under contacts, which contributed to the more expensive pricing. 

Citizens wrote: “The NFL season should be some of the most liquid sports markets for Kalshi all year, excluding tentpole events, as we believe these games have the highest wagering per game across any league in the US.  

“We will track pricing as the season progresses to see if Kalshi can narrow the delta in vig between the two largest sports betting companies.  

“If we see the spread starting to tighten, it implies the model is working (higher liquidity) and/or Kalshi is offering fewer incentives to market makers. In our view, the spread should narrow as user adoption (and liquidity) improves throughout the football season.” 

Citizens also suggested Kalshi may continue to lag behind traditional sportsbooks until it rolls out parlays on its platform.

The statement added: “The two largest advantages of using an exchange over a sportsbook are better pricing and the ability to easily cash out, in our view. As we have learned, the cash-out feature is, for the most part, leveraged by consumers using parlays but not yet offered for sports contracts on Kalshi.  

“The company appears to be looking to roll out parlays; however, we expect pricing to be even more inferior compared to DraftKings and FanDuel with the collateral needed by the market makers to trade the product.  

“Overall, if prediction market operators like Kalshi are not offering parlays, the risk to DraftKings and FanDuel of losing players who are betting parlays and want to leverage the cash out should be minimal, in our view.” 

Last month, FanDuel partnered with CME Group – operator of the Chicago Mercantile Exchange – to launch prediction markets later this year, though this will avoid sports contacts and instead focus on stock indices and commodities.

DraftKings has also been rumored to be eyeing up a takeover of CFTC-approved Railbird Exchange as a way of accelerating its expansion into event contacts.  

Daily fantasy sports (DFS) platform Underdog last week announced a collaboration with cryptocurrency exchange Crypto.com to launch prediction markets in the US.