Polymarket’s regulated U.S. site has finally launched parlays, though only in a beta test environment at the moment, as the exchange’s trade data shows thousands of multi-leg trades were placed last week.
Polymarket U.S. self-certified parlays — which it called “Combinatorial Athletic Outcome Contracts,” or CAOCs, for short — with the Commodity Futures Trading Commission (CFTC) back in May.
However, 10 weeks later, the contracts were still not available for trading on the prediction market’s U.S. exchange. Polymarket’s blockchain-based offshore site — which blocks U.S. I.P addresses — started offering parlays on June 10, at the start of the FIFA World Cup.
During the time between Polymarket U.S.’s self-certification and launch, parlay volume on Kalshi soared from $4.77 billion in May to $13.78 billion in July, with August volume on course for a similar total despite a light sporting calendar.
Polymarket U.S. finally processed its first parlay trade on Aug. 5, the exchange’s trade data shows, as part of a beta test that may be laying the groundwork for a wider launch in time for football season.
In the days since, parlays on Polymarket U.S. have already totaled $7.4 million in volume, or $928,093 in stakes from the taker side, across 16,173 different trades. The vast majority of that volume has come since Thursday.
Despite the volume, the option to create a parlay does not yet appear on the Polymarket U.S. app, and Polymarket U.S. has not widely launched a desktop site yet. Instead, all of those trades occurred as tests. Polymarket’s test volume on parlays over the weekend was higher than Kalshi’s parlay volume for the first few days after it officially launched the product to all of its app users.
According to Polymarket U.S.’s API documentation, “combos” are now in beta testing. For test users, parlays currently can have up to 10 legs, meaning that the 30-plus leg trades facilitated on Kalshi would not be possible.
Like other prediction markets that have launched parlays, Polymarket uses a request-for-quote process to price the trades. Under this system, a trader who wishes to place a parlay trade puts out a request for market makers to price the combination hitting. Market makers must respond within a time limit, and the original parlay bettor is then shown the price of the best offer, which they can accept.
Generally, this happens without the original parlay better seeing anything that is going on behind the scenes. The request-for-quote system makes it possible for prediction markets to offer parlays, but it means that users can usually only take the “yes” side of a parlay unless they use the API. In practice, this means that casual users are overwhelmingly on the “yes” side, which typically loses money.
Kalshi adds maker fees to parlays
The test launch comes as Kalshi appears set to add maker fees to parlays. The market makers on Kalshi parlays previously did not have to pay any fees and were at times eligible for incentives for providing liquidity.
The fees charged would be based on the same Kalshi maker fee schedule that is in place for other types of trade. Maker fees are usually a quarter of taker fees, with the exact fee rate per contract depending on the odds. Fees are higher at odds close to 50/50, and lower for extreme underdogs or favorites.
As a result, parlay fees as a percentage of volume are generally lower than the fees for most other types of contracts. Due to the high volume of parlays, though, they are still a significant source of Kalshi fees. Kalshi has made $25 million in parlay taker fees in the first 16 days of August alone.
