FanDuel Is Market Making on Kalshi: Inside the Sportsbook Shift to Prediction Markets

FanDuel spends its entire business setting odds for people who bet against the house. On Kalshi, it turns out FanDuel is doing something close to the same job, just on someone else's platform.

According to a new report, Flutter, FanDuel's parent company, disclosed in its Q1 earnings that it was market making on what it described only as "a major, third-party prediction market platform." A person familiar with the matter identified that platform as Kalshi. A Kalshi spokesperson confirmed the broader picture goes well beyond FanDuel alone, saying many other sports betting operators are trading on the platform as well.

Kalshi's Position: Nothing Special About FanDuel

Kalshi's spokesperson pushed back directly on any suggestion that FanDuel gets preferential treatment, describing an open platform where FanDuel competes against thousands of other users on the same terms everyone else gets. Any regular user who wants to offer a better price, or market make the same way FanDuel does, is free to do it. There is no special arrangement carved out just for FanDuel, and Kalshi says it already has hundreds of market makers active on combo trades, including plenty of individual traders alongside the institutional names.

That framing matters because of where FanDuel's activity is actually concentrated. According to the report, FanDuel's trading on Kalshi sits almost entirely in combo trades, the product where a trader links multiple separate yes-or-no predictions together for one large payout if every single prediction hits. When someone builds a combo like that, Kalshi's market makers, the power users and institutional players who provide liquidity across the platform, step in to offer competing bids on the other side of the bet.

Why FanDuel Sees This as the Same Business It's Already In

Flutter CEO Peter Jackson has already explained the logic behind this directly. Market making combo trades on Kalshi, he said in a previous interview, isn't meaningfully different from setting parlay odds inside FanDuel's own sportsbook. It comes down to the same core skill either way: making money off pricing expertise, which he described as essentially the entire core business FanDuel already runs.

That comparison is doing real work here. A parlay on a sportsbook and a combo trade on a prediction market are structurally similar products, multiple linked outcomes bundled into one bet with an outsized payout if everything comes in. Whoever prices that bundle correctly, whether that's a sportsbook's trading desk or a market maker on Kalshi, is playing the same role: setting the number the rest of the market has to beat.

The Combo Market Is Already Enormous

This isn't a small corner of Kalshi's business. Combo trading volume on the platform hit $21.4 billion over the past 30 days, according to data from Aldrin Research, which puts combos at 49 percent of all trading volume on Kalshi. Nearly half of everything moving through the platform right now is running through the exact product where FanDuel and other sportsbook operators are showing up as market makers.

What This Actually Means for Retail Traders

The presence of FanDuel, and apparently plenty of other sportsbook operators, on the other side of Kalshi's combo market cuts against any assumption that prediction markets are somehow a cleaner, more even alternative to a traditional sportsbook. The same professional pricing operations that set the odds retail bettors see on a sportsbook app are, by Kalshi's own account, active as market makers on Kalshi too.

That doesn't make Kalshi's platform unfair by definition. Kalshi's spokesperson is right that the rules are technically open to anyone willing to show up and price combos competitively. But openness in theory and openness in practice are different things when one side of a trade might be a company that literally built its entire business around pricing exactly this kind of bet, and the other side is a retail trader building a combo for fun on a Sunday afternoon.

Strip away the branding and the underlying dynamic looks familiar. Whether someone is placing a parlay on a licensed sportsbook or building a combo trade on a prediction market, they are very often on the other side of a professional oddsmaker, not a fellow retail trader with a similar level of information. Prediction markets were pitched as something structurally different from sports betting. On the combo side of Kalshi's business, the people setting the prices increasingly look like the exact same operators retail bettors already deal with everywhere else.