Combos, known as parlays in prediction market jargon, are gaining popularity in the yes/no exchange sector, especially in sports event contracts. Novig and Underdog are leading the way with multi-leg wagers in this niche.
Although one operator currently dominates the combo volume in U.S. regulated prediction markets, newcomers like Novig and Underdog are proving that there is potential for other companies to capture market share in this profitable sports-focused niche. According to Eilers & Krejcik Gaming (EKG) analyst Brad Allen, in August, Underdog held a 48.3% combo percentage of the overall sports contract volume, while Novig had 35.5%.
“Underdog is another standout, ramping quickly from a standing start in July to second-best combo percentage in the market at 48.3%,” notes Allen. “That surge reflects lower contract breadth, but also a customer base used to building parlays in the core Underdog pick’em product.”
The demand for prediction market combos is clearly evident in the data. In August, multi-leg prediction market trades, primarily focusing on sports derivatives, made up half of the industry-wide contract volume, a significant increase from just 14% in February, as reported by Allen.
Novig, Underdog Off to Strong Starts
Novig and Underdog are quickly climbing the ranks in terms of combo contract volume. Novig ranked fourth while Underdog had the second-highest combo percentage of contract volume, after only one exchange in August. Both companies are relatively new to the prediction market industry.
Underdog launched its prediction market exchange in July, while Novig introduced its sports-focused betting exchange in August. The growth of Novig and Underdog in the industry is notable, especially as they continue to attract customers during the football season.
Aside from combo volume, other metrics suggest that Novig and Underdog are among the fastest-growing companies in the industry, a trend that is expected to continue as they focus on acquiring more customers.
DraftKings Plays a Role in Combos
DraftKings is also making strides in the combo market. Although its 1.5% share of multi-leg wagers in August might seem low, the company only introduced combos on its DKeX exchange towards the end of the month.
Despite the late launch, DraftKings traded 11 million in combos in just four days, representing around 36% of its total contract volume at that time,” according to EKG’s Allen.