How event contract bundles are boosting volume on prediction markets

The growing popularity of a combo contracts on prediction markets is leading to soaring volumes, even as they makes up only a small amount of total activity on the platforms. 

Combos, or multiple contracts stacked together that only pay out if all of them win — similar to parlays on traditional sportsbooks — have exploded in popularity. 

Last month, combos accounted for more than 50% of notional volume on Kalshi, driven by the start of the NFL season. Combos are overwhelmingly made up of combinations of multiple sports contracts. 

As rival Polymarket worked to expand its U.S. exchange this year, combos were a priority following the domestic platform’s official launch in May. Combos are now nearly 50% of daily volume on Polymarket U.S., helped by growth during the NFL season.

Large share of volume

But while combos hold a large share of volume, they actually aren’t where most speculators on prediction markets execute their trades. That’s because of how the Commodity Futures Trading Commission, the federal regulator overseeing prediction markets, requires exchanges to report volume.

The multi-leg contracts are “helping [Polymarket and Kalshi] claim a higher number with lower realistic cash output,” said Chris Park, a researcher and founder of MSR Decode, a research firm analyzing prediction market data.

When a trader places a trade on a prediction market, no matter the cash they put down, platforms  measure it as $1 of notional volume. All event contracts have binary outcomes between $0 to $1, and no matter what price a speculator pays to place a trade, someone has to take the other side of that order and make $1 in total volume. 

But combos can have payouts that are much greater than $1, meaning someone can put very little money down, pennies in some cases, and it will be measured as potentially thousands of dollars in volume thanks to the market makers who take the other side of these high-payout trades.

A CNBC analysis for trades on Kalshi on Sept. 27 showed this in practice. On single contracts, the average amount of cash placed on a trade was less than 47 cents. But on combo contracts, that average per contract was about 9 cents. 

Similarly, while combos comprised 58% of Kalshi’s trading volume in September, they made up less than 13% of the total transactions on the platform, according to data on Dune. 

Other than sports, combos trump other categories for notional volume on Kalshi, with over 35% total volume share.

Details on how combos are measured is not always clear to the public, but their effect on total headline volume numbers can make platforms look as though they’re growing faster than they are.

The rising popularity of prediction markets’ sports-related event contracts has hurt traditional online sportsbooks — including FanDuel parent Flutter Entertainment, and