Tennis betting markets used to be dominated by sportsbooks publishing odds on matches throughout the ATP Tour calendar, from the first rounds of the Masters to Grand Slams like the Wimbledon Championships. However, in recent years, prediction market platforms such as Kalshi and Polymarket have introduced a different approach to price results.
Although both systems express beliefs about a player’s chances of winning, their pricing methods and the information embedded in those prices are different.
The price of traditional sports books
Sportsbooks set fixed odds for each outcome in a tennis match. For example, in a hypothetical match between Novak Djokovic and another top player, a sports book might list:
- Djokovic: 1.50
- Contradiction: 2.70
These errors are based on the following factors:
- Bookmaker statistics that estimate each player’s odds of winning.
- A risk management adjustment that measures potential payments.
- The edge of the built-in house.
Turning constraints into opportunities is implied
Sportsbook odds are not only based on market odds. They cover the edge of the house. This can be seen if you convert the decimal value to the specified probability. This is done using the equation:
Using the math from Djokovic’s previous example, this would result in 1.50 having a stated probability of 66.7%, 2.70 having a stated probability of 37.0%. This percentage reaches 103.7%. This figure covers 3.7% of the houses.
Exchange style prediction markets
Prediction markets work differently. Instead of a bookie setting prices, brokers buy and sell event contracts. For example, the contract could read “Djokovic wins the match.” The contract pays $1 if the statement is true and $0 if the statement is false. If the contract trades at $0.68, this means it prices Djokovic’s winning chances at 68%.
There are a number of active prediction market platforms, such as Kalshi. Polymarket, PredictIt, RobinHood, and Crypto.com. They allow traders to post bids and offers. Market prices move according to supply and demand. Each platform usually receives a small commission on profits instead of a fixed amount. This operating model means that prediction markets are closer to financial markets than traditional betting, something that is explained here.
The main difference between sportsbook pricing and betting markets
Obviously, sports book prices and prediction markets are both popular in tennis betting markets. And they are very different from each other. Sportsbooks use bookmaker models to determine probabilities, odds are adjusted to control credit, and margin is included. On the other hand, traders determine the price in prediction markets, so the prices reflect the collective belief and are usually close to the true probability.
Another difference between these two methods is the price movement. While prediction markets are constantly updating as traders react to new information, sportsbook prices change slowly and gradually.
If you take a closer look at how prediction markets tend to reflect true probabilities more accurately, there are good reasons why this is so. Sportsbook prices include margins and sometimes deviate from the odds. Whereas, in prediction markets, traders will buy the undervalued contracts and sell the overvalued ones. However, it is worth noting that low-liquidity prediction markets may be less accurate than sportsbooks.
The future of tennis prediction markets
As financial-style prediction markets expand into sports prediction, tennis presents a particularly attractive domain due to the frequency of matches, rich historical data, and the availability of player performance metrics.
Therefore, prediction markets can greatly complement, or even challenge, traditional sportsbook prices throughout the professional tennis circuit. It is unlikely that they will completely replace sports books, but the two programs can coexist. Ultimately, both have the same goal: to determine the player’s chances of winning. They do this in different ways.
