Kalshi Poised to Launch Parlay-Style Contracts in U.S. Prediction Market
Kalshi appears to be on the verge of introducing parlay-style contracts, a move that would bring one of the most popular and profitable features of traditional sports betting to the federally regulated events market. A recent self-certification filing with the Commodity Futures Trading Commission (CFTC) outlines a new type of contract that is clearly designed to allow users to combine multiple outcomes into a single wager.
A New Contract Designed for Multi-Leg Wagers
The new contract, enigmatically titled “Will <outcome> occur in <period>?”, was submitted to the CFTC for self-certification this week. While the title is vague, the details of the contract’s structure and payout mechanism strongly suggest it is a framework for parlay betting.
A key provision states that a winning “Yes” contract “will pay out the product of the payouts for each component,” a formula that mirrors how traditional sportsbooks calculate the odds for a parlay of independent events.
This structure would allow users to create their own multi-leg wagers, a significant step up from the pre-packaged, individually priced parlays Kalshi has offered in the past for events like the Oscars.
The Scope of the New Offering
The filing’s definition of potential “outcomes” is broad, encompassing a wide range of sports-related events. This includes:
- Game outcomes
- Player and team statistics
- Championships and awards
- Draft outcomes and other milestones
This wide scope suggests that users could potentially build parlays that combine the winner of a Week 1 game with a futures bet on the Super Bowl champion, for example.
The Power of Parlays: Liquidity and Profitability
The move to a product-based payout model is a strategic one. It allows Kalshi to offer a high level of liquidity on a vast number of potential parlay combinations without needing a dedicated market maker for each one. This is particularly effective for multi-game parlays, where the outcomes are independent of each other.
Parlays are also a major profit driver for traditional sportsbooks, as they typically have much higher hold percentages than single wagers. By introducing a similar product, Kalshi is positioning itself to capture a piece of this lucrative market.
The Challenge of Same-Game Parlays
While the new structure is well-suited for multi-game parlays, it is less applicable to the increasingly popular “same-game parlays” (SGPs). In SGPs, the outcomes are often correlated (e.g., a quarterback throwing for a certain number of yards and his team winning the game), which makes a simple product-based odds calculation inaccurate.
This suggests that Kalshi’s initial parlay offering will likely focus on multi-game combinations, as pricing correlated, same-game events would be a more complex undertaking.
Under the CFTC’s self-certification process, Kalshi could theoretically begin offering these new contracts immediately. The filing also indicates that the initial focus will be on the NFL and college football.
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