It's a Longshot

👋 Welcome to Predicted, the newsletter covering the business of prediction markets.

Not subscribed yet? You know what to do 👇

Discussed in this piece:

This piece was written and researched by Pet Berisha and Omar El Safy.

Parlays are all the rage now. For almost every prediction market.

But they’re getting longer and longer in their odds.

Bloomberg have published an analysis of more than a billion Kalshi and Polymarket transactions.

Since the start of 2025, around half of all contracts traded on Kalshi have had someone on one side betting on an outcome with less than a 10% chance of happening, chasing a return of 1,000% or more.

In recent weeks, it's been more than 65%, roughly two in every three contracts traded.

On Polymarket International, bets on unlikely outcomes, like Jesus Christ returning to Earth, made up 52% of all volume over the past 21 months.

We've been tracking this on Predicted since May 2026, mostly through parlays, so none of this is a surprise. Bloomberg's analysis goes wider and covers every market on both platforms, which is fantastic to analyse.

A longshot is a bet on something that probably won't happen. Bloomberg counted anything priced under 10¢, where the market gives it less than a 10% chance of coming in. So roughly 9/1 or longer, in traditional betting odds.

Bloomberg added up every bet on a longshot coming in since early 2025.

And that's before fees.

Say a contract costs 2¢. The market is saying it has a 2% chance of happening, so if the price were fair, it would win twice in every 100 tries.

On average, Kalshi longshots won 1.9 times in every 100, when their prices said they should win 2.2 times.

It sounds tiny. But if you keep buying those tickets, you get back roughly 85¢ for every $1 you put in.

That is, in essence, how sportsbooks make the bulk of their revenue. On parlays, they are selling $1 for 70-85¢, and prediction markets are following that playbook. But this time, using market makers.

Parlays made up 58% of all contracts traded on Kalshi in September 2026. In Bloomberg's latest data, up to the end of September 2026, roughly two-thirds of parlay contracts carried less than a 1% chance of coming in. And across 2026, those ultra-long parlays paid out roughly 40% less often than their prices implied.

Kalshi's contracts on the World Cup winner traded more than $1.5 billion of notional volume, and more than two-thirds of it was on teams with less than a 10% chance of winning. Mexico and the US alone traded $165 million.

All of these data points show that the behaviour is skewing more toward, as Howard Lindzon would call it, the Degenerate Economy.

In June 2026, our analysis of Kalshi's combo data found the median parlay was priced at roughly 15% implied probability at launch in September 2025, around a 5.5/1 shot, and had drifted to 8% by May 2026, close to 11.5/1.

By August 2026, the typical Kalshi parlay was 8.6¢, 44% off its March 2026 peak.

Tickets priced under 2¢ went from 42.6% of parlay notional in October 2025 to 62.3% in August 2026. A trend towards the longshot.

Parlays were 16.8% of Kalshi's notional in March 2026 and 55.3% by September 2026, and made up 88% of Kalshi's month-on-month growth in event contracts in September 2026.

It isn't just Kalshi either.

Parlays were 37% of everything traded on Novig in its first six weeks as a prediction market, and tickets with six legs or more made up 38% of its parlay notional but only 10% of the handle.

Polymarket told Bloomberg that longshot bettors only put up about 1% of the cash behind the volume Bloomberg counted. The rest comes from the traders and market makers offering the 20/1 and 99/1 odds.

But the reality is, the longshots are getting longer, and that favours market makers and traders.

And this longshot bias is nothing new.

Academics were writing about this long before prediction markets existed.

In 1949, Richard Griffith found horse racing bettors consistently overrated longshots and underbet favourites. People overvalue a tiny chance at a big payout, and struggle to tell the difference between very small probabilities.

Parlays are the modern version, and they print money for sportsbooks.

In New Jersey, parlays were 72.5% of gross revenue in a recent month at a 24.2% hold, compared to 4.4% on non-parlay bets.

Predicted is written by Pet Berisha and Omar El Safy. Every edition, our quarterly State of Prediction Markets reports and more at predicted.co.

This newsletter is for informational purposes only and is not financial, business or legal advice. These are the author's thoughts & opinions and do not represent the opinions of any other person, business, entity or sponsor. Any companies, platforms, markets or projects mentioned are for illustrative purposes unless specified.

The contents of this newsletter should not be used in any public or private domain without the express permission of the author.

The contents of this newsletter should not be used for any commercial activity, for example - research report, consultancy activity, or paywalled article without the express permission of the author.

Please note, the services and products advertised by our sponsors (by use of terminology such as but not limited to; supported by, sponsored by or brought to you by) in this newsletter carry inherent risks and should not be regarded as completely safe or risk-free. Third-party entities provide these services and products, and we do not control, endorse, or guarantee the accuracy, efficacy, or safety of their offerings.

It's crucial to provide our readers with clear information regarding the inherent nature of services and products that might be covered in this newsletter, including those advertised by our sponsors from time to time. When you trade on prediction markets (including event contracts, opinion markets and other speculative instruments) your capital is at risk. Risks associated with prediction markets include price volatility, loss of capital (the value of your position could drop to zero), illiquidity, complexity, evolving regulation and lack of protection. Many prediction market operators do not currently operate in a fully regulated industry, and availability varies by jurisdiction. Therefore, please be aware that when you place funds on prediction markets, you may not be protected under financial compensation schemes and protections typically afforded to investors when dealing with regulated and authorised entities to operate as financial services firm. Nothing in this newsletter constitutes a recommendation to place, hold, or close any position on any market.