By the time Rory McIlroy donned his green jacket, more than $86 million had been traded on The Masters via Kalshi’s prediction market—a number that, as Event Horizon’s Dustin Gouker first pointed out, eclipsed the platform’s Super Bowl volume.
While undeniably a successful outing, Kalshi—much like 25-year-old Ludvig Aberg, who trailed McIlroy by one stroke before collapsing on the final two holes—has plenty of room to grow before sitting atop golf’s throne.
The difference, however, is that while Aberg’s collapse came at the end of the event, Kalshi’s struggles occurred before golfers even teed off.
Pre-tournament pricing problems
Of the total trading volume on The Masters, only $10.2 million took place prior to the event. That means 88% of The Masters volume accrued between Thursday and Sunday. For anyone who wasn’t betting golf for the first time, the reason is obvious.
Kalshi’s one-cent price increment makes it nearly impossible for the platform to offer competitive odds on at least two-thirds of the field—those listed at 100-to-1 or longer at traditional sportsbooks before the tournament. Even golfers priced between 60-to-1 and 90-to-1 become impractical to trade, since a 2¢ price implies 49-to-1 odds. That’s a significant haircut before accounting for fees, which further reduce the implied odds and expected value of a trade.
Take a 75-to-1 golfer at a sportsbook. On Kalshi, that golfer likely opens at 2¢, or 49-to-1 implied odds. It’s not hard to see why value-conscious users might sit out until the tournament begins and odds become more fluid.
Kalshi’s market makers—who dominate most of the order book in its sports markets—aren’t exactly in the business of giving handouts. Meanwhile, users looking to avoid Kalshi’s steepest fees by placing limit orders often find themselves boxed out by market makers who fill the spread with thousands of open contracts.
On Robinhood, the popular brokerage Kalshi partnered with to expand prediction market access, the price of sports trades become even steeper. Robinhood charges 1¢ commission per trade, on top of Kalshi’s 1¢ exchange fee. That means a 1¢ contract effectively costs 3¢—and suddenly, a 99-to-1 longshot is priced more like 33-to-1. (Did someone yell “FORE”?)
A fairer alternative? Not yet
Kalshi is clearly leaning into the appeal of live sports trading, where users react to every play, or in this case, every shot in real time. But Kalshi has also billed itself as a fairer alternative to predatorial sportsbooks that charge nearly unbeatable vigorish (the sportsbook equivalent of exchange fees), limit winners, or ban them outright.
In an industry that some argue is responsible for the country’s growing gambling crisis, prediction markets present a glimmer of hope as more sustainable, ethical, and consumer-conscious models within America’s troubling sports betting ecosystem.
Kalshi nor Robinhood ban winning players—indeed an improvement over the status quo—but given their current pricing mechanics and hefty fees, it’s a stretch to argue that they are our knights in shining armor.
Corporations, of course, rarely have heartstrings to pull, so let’s try the business case: unless it rethinks its approach, Kalshi will struggle to grow its user base with semiserious and professional sports bettors, the very users with the biggest bankrolls and strongest appetites for trading.
