Published on: May 28, 2026, 02:37h.
Updated on: May 28, 2026, 02:37h.
- Combo betting markets result in greater losses for retail participants compared to traditional sportsbook parlays.
- Research by Citizens estimates that retail bettors experience a 45% increased loss with combo bets versus sportsbook parlays.
- Individuals utilizing both prediction markets and sportsbooks consistently show poorer returns on investment (ROI).
Whether referred to as combos or parlays, multi-leg betting in prediction markets is leading retail traders to incur greater losses than traditional sportsbooks.
Utilizing data from Juice Reel, Citizens Equity Research evaluated the median returns of retail bettors from October 2025 to present, revealing that combos, which refer to parlays in prediction market terminology, incur heavier losses than traditional sportsbook parlays.
“The statistics indicate that combo ROI stands at -18%, meaning retail bettors are losing 45% more funds compared to a -12% ROI with parlays,” explains Citizens analyst Jordan Bender. “Moreover, customers who engage with both prediction markets and legal sportsbooks experience even worse returns, with a -9% ROI for parlays and -23% for combos during the same timeframe.”
While prediction market operators strive to lessen reliance on sports derivatives, combos are perceived as pivotal to expanding trade volumes on yes/no platforms.
Challenges Facing Retail in Prediction Market Combos
Recreational bettors now face significant challenges when placing multi-leg wagers on prediction markets, as these platforms attract knowledgeable trading desks equipped with sophisticated technology and wealthy professional bettors.
Experienced bettors—those who consistently make profits—are leaving traditional sportsbooks due to constraints from gaming companies, which often limit their betting activity or deny them service altogether. This is primarily because traditional sports betting pits the bettor against the house, whereas in prediction markets, participants trade against one another, not against the platform.
This may favor market makers and professional traders, but it puts retail bettors at a disadvantage, especially with combos highlighting their potentially less sophisticated betting patterns.
“Combos undergo an RFQ (request for quote) process, enabling takers to identify makers, which allows sharper participants to specifically target recreational bettors or filter out unprofitable trading flows,” Bender further elaborates. “In simpler terms, customers receive dynamic pricing, while market makers can determine their trading counterparties, giving them an edge by avoiding competition from more skilled traders.”
Economics of Combos and Parlays
Parlays have historically been essential to the sports betting sector’s financial model, and this continues to hold true. The introduction of exotic markets has encouraged bettors to add more legs, boosting sportsbook parlay margins to 19% as of April, rising from 17% in 2023, surpassing Kalshi’s implied combo margin of 14.7%, according to Bender’s findings.
The analyst highlights that Kalshi’s combo turnover climbed to 22% last month, a significant increase from 13% in January. However, established prediction market operators now compete with sportsbooks venturing into event contracts, compounded by the realization among retail traders regarding the unfavorable economic dynamics of combos.
“We foresee that the growing shift toward combos will lead to quicker customer turnover due to their detrimental wallet dynamics. Concurrently, substantial marketing investments from newcomers in the field (with FanDuel and DraftKings potentially allocating $600 million this year) will further challenge incumbent exchanges,” concludes the analyst.