Key Takeaways
- Citizens put Kalshi’s Week 1 implied vig at 4.32%, against 4.44% and 4.51% at the books.
- On game outcomes alone Fanduel was cheaper, at 4.08% against Kalshi’s 4.14%.
- Kalshi’s parlay vig was 23.8%, against 22.0% at both sportsbooks, before fees.
An Edge Built on Totals, Measured Before Fees
Jordan Bender and Isabelle Slavin of Citizens JMP Securities tracked pre-game pricing on the Friday afternoon before NFL Week 1, covering moneylines and over/unders across 28 data points at Fanduel, Draftkings and Kalshi. Their headline was that the exchange won: Kalshi’s implied vig came in at 4.32%, below Fanduel’s 4.44% and Draftkings’ 4.51%. A year ago, Kalshi trailed both by 30 to 40 basis points for the full NFL season.
On game outcomes, Fanduel charged 4.08% and Kalshi 4.14%, with Draftkings third at 4.31%. On over/unders, Kalshi charged 4.50% against Draftkings’ 4.71% and Fanduel’s 4.80%. The 4.32% headline figure is the straight average of Kalshi’s two, meaning the exchange’s advantage is a totals advantage. The 4.84% figure being cited as last season’s Kalshi implied vig reflects a full-season average across 17 weeks; its Week 1 2025 price was 5.31%, making the like-for-like improvement 99 basis points rather than 52.
Kalshi does not build a margin into the price the way a sportsbook does; it charges a transaction fee on the trade instead. Citizens reports this fee separately, at an average of $1.62 per 100 contracts across the markets tracked (1.6% on outcomes and 1.8% on over/unders in Week 1). The vig comparison for parlays is stated to be “before accounting for transaction fees.” The note does not say the same for the single-event figures, but nothing in it indicates otherwise, and when Citizens previously ran this exercise in September 2025, it compared the two venues with fees included and concluded Kalshi was more expensive. On this year’s numbers, adding the fee would put Kalshi above both books on both bet types.
Combos or parlays show an even wider gap, as Kalshi’s combo vig was 23.8% against 22.0% at both sportsbooks, calculated across 14 data points by averaging the over and the favorite in every game. Both sides improved on last season (Kalshi from 25.9%, Fanduel from 24.4%, Draftkings from 25.0%) but the books improved faster. The spread against Fanduel went from 150 basis points to 180. Bender and Slavin are watching whether Kalshi’s introduction of a combo market-making fee in August moves spreads – in August, the exchange’s own published schedule did not list this adjustment.
Citizens frames the trend as self-reinforcing, arguing that higher volumes, deeper participation and competition among liquidity providers tighten spreads, which attracts more trading, which tightens them further. Kalshi set consecutive daily records over the weekend at $2.426 billion and $2.433 billion, taking more than $32 million in fees across the two days, with parlays accounting for more than half the total. Takers lost $2.1 million before fees on Sunday and $15.2 million after; on parlays, it was $200,000 before fees and $4.1 million after.
Citizens also argues that cannibalization of regulated sportsbooks “is not getting worse and may be easing,” that wallets are splitting rather than switching, and that Kalshi is “primarily attracting a cohort of players who may otherwise wager on offshore books.” That is the opposite of the case the American Gaming Association made this month when it forecast the first flat NFL betting season since 2018 and blamed prediction markets for it.
Part of the context of this analysis is that Citizens JMP rates Draftkings, Flutter, PENN and Rush Street Market Outperform and MGM Market Perform. It makes a market in four of the five, and it has received investment-banking compensation from Draftkings and MGM in the past twelve months. Citizens JMP was manager or co-manager of public offerings for PENN and Rush Street in the same period, and states that it expects to seek investment-banking compensation from all five within the next three months. Its conclusion is that betting exchanges “do not represent a competitive threat to the profitability of existing operators,” naming each of them.
