Sportsbooks vs Prediction Markets - Market Structure and its Effects

taetaehoho compares sportsbook and prediction market pricing across identical events, finding that liquid prediction markets offer 100-300 bps better prices than sportsbooks even after accounting for 150-175 bp fees, but de-vigged sportsbook odds match prediction market prices, suggesting counterparty information and last-look advantages tighten spreads more than maker competition does. Long-tail markets on Polymarket and Kalshi suffer 10-50% spreads versus <$1,000 volume, indicating anonymity and market immaturity create depth problems sportsbooks have solved at scale.