Sportsbooks vs prediction markets is the first comparison every sports bettor should understand: one sets odds as a house, the other lets traders set prices with each other.
Who Sets the Price
A sportsbook sets odds and takes the other side of your bet. In a prediction market, prices come from traders buying and selling shares.
How You Win
A sportsbook bet pays according to the odds when placed. A prediction market share pays $1.00 if the outcome happens and nothing if it does not.
Trading Before the End
Many prediction markets let you sell shares before the event finishes, so your result can depend on price moves, not only the final score.
Worked Example
A team's YES share trades at 40¢. You buy 25 shares for $10. At half-time the price is 55¢, and you could sell for $13.75, or hold: $25 if the team wins, $0 if not.
Key Takeaways
- Sportsbooks are the counterparty; markets match traders.
- Shares pay $1 or $0 at resolution.
- You can often exit before the event ends.
- Both involve real risk of loss.