Chris Dierkes claims he had more than $1 million riding on the first big Saturday of college football. Not spread across dozens of games or buried in complex hedge strategies — just sitting there on prediction markets, waiting for recreational bettors to take the other side.
“I had $220,000 on Ohio State-Texas,” he said matter-of-factly, describing just one position from that weekend.
Welcome to the prediction market revolution, where the smartest operators aren’t trying to beat the house anymore. They are the house.
The game changed, according to Dierkes, when Robinhood integrated with Kalshi. Suddenly, millions of users who think they’re making savvy financial plays can tap a button and bet on football games without ever leaving their stock trading app.
“Kalshi has grown incredibly with the Robinhood retail flow,” Dierkes explained. “I’ve never seen anything like it with college football. The amount of volume they were getting on some of those marquee games was just obscene.”
The beauty, from a professional standpoint, is that most of these users have no idea they’re getting … well, let’s just call them not the best prices.
“Think about all these people in California and Texas where sports betting isn’t legalized,” Dierkes said. “If you pull up your Robinhood account and want to bet $20 or $50 or $100 on the game, it’s right there. And these are people that don’t check oddsboards, don’t know what other books are offering, and might not even consider it gambling.”
The result? A target-rich environment where sophisticated traders can post just south of unfavorable odds and watch uninformed retail money flow their way.
Market making at scale
An anonymous trader who claims to be in Kalshi’s top 10 by volume operates differently but with similar results. He’s moving “$5 to $7 million per night” through algorithmic market making, using baseball’s predictable patterns to capture inefficiencies on thousands of small transactions.
“We’re just top-down betting,” he said. His models track everything — base runners, pitch counts, batter profiles — updating odds in real-time as game situations evolve.
What makes this possible is the fundamental structure difference between prediction markets and traditional sportsbooks. For pros, this creates multiple opportunities. Dierkes operates as both market maker and market taker, depending on the situation.
“I’m 90% maker, 10% taker,” he said.
As a maker, he can “post prices that consumers would gladly bet because you’re only competing against other people on Kalshi putting up prices, so you’re not really incentivized to offer a best-in-market price.”
As a taker, he exploits features like Kalshi’s 4% interest on futures positions.
“I had the Cavs to win the East, and having it locked up for two months, getting 4% interest actually moved the price for me by about 11 cents just from that interest, which is massive,” he said.
Old school skepticism
Not every professional is sold on the opportunity. Brad Feinberg, a longtime pro bettor, tried Kalshi but couldn’t find advantages over his traditional outs.
“I find prices that are no better than what I can get on my own,” he said of Kalshi. For bettors focused on traditional sports betting rather than financial trading approaches, the platforms can seem unnecessarily complex.
Feinberg prefers exchanges like Novig and Smarkets that offer tighter spreads on standard betting markets.
“You literally can get stuff one cent wide versus 20 cents wide,” he explains. “You can get Eagles -8.5 at -101 and maybe Dallas +8.5 at +100.”
Regulatory arbitrage
The current environment exists because of regulatory confusion rather than clarity. Captain Jack Andrews, who is a high-volume bettor and also develops tools for bettors with his Unabated site, sees the opportunity as temporary, believing that when institutional market makers arrive with serious capital, margins will compress and the easy money will disappear.
The regulatory landscape supports this timeline. The CFTC’s leadership ranks are depleted, with only one of five commissioner slots filled, creating a vacuum that platforms have exploited through self-certification of new market types.
Kalshi recently self-certified parlays with the CFTC, rapidly expanding its sports offerings while regulators struggle to keep pace.
The anonymous high-volume trader sees the writing on the wall. He believes his current edge depends on being “one of the few” sophisticated operators in the space.
“That leaves me an open door right now that I’m hopeful to get another 30 days or so out of before the end of baseball season.”
The new ecosystem
What’s emerging is a multi-tiered ecosystem where different types of professionals exploit different inefficiencies. Pure market makers like the anonymous trader provide liquidity while capturing misprices. Hybrid operators like Dierkes extract value from retail flow while occasionally taking positions. Traditional pros remain skeptical or focus on conventional exchanges.
The common thread is leverage — using technology, information advantages, or structural quirks to extract value from less sophisticated participants. It’s a far cry from the traditional sharp bettor grinding out small edges against sportsbook algorithms.
“I don’t want to say I’m betting less with sportsbooks,” Dierkes said. “It’s just another revenue stream. Pre-exchanges, I had revenue streams betting on normal books, and now I have an additional revenue stream betting on the exchanges.”
Retail reality
At the center of it all are millions of casual users who may not fully understand what they’re participating in. The Robinhood integration has been particularly effective at attracting this flow.
“These are people that might not even consider it gambling, so it doesn’t seem as bad, and they’re just not getting the best prices,” Dierkes said.
It’s a blunt assessment of market dynamics that traditional sportsbooks have long exploited — the difference being that on prediction markets, retail players are often trading directly with professionals rather than against house algorithms designed to extract similar value.
The current opportunity window appears finite. Regulatory clarity will eventually emerge. Institutional players will provide deeper liquidity. Platform competition will tighten spreads.
But for now, a select group of sophisticated operators is capturing millions from retail flow that may not fully understand the games they’re playing. It’s capitalism in its purest form.
