Prediction markets vs sportsbooks for Knicks games: where the price comes from

On any Knicks night there are two very different kinds of venue putting a price on the same game. They arrive at that price from opposite directions, and the difference shows up in what a winning position pays.

The sportsbook model

A sportsbook is the counterparty. It writes the line, takes the other side of every ticket and protects itself by shading both prices. A game it considers a genuine toss-up does not go up at +100 on each side; it goes up at -110 on each side. Convert those two prices to probabilities and they add to about 104.8%. The extra is the book's margin, usually called the vig or the hold, and it is in place before the opening tip.

Nobody hands you an invoice for it. It lives inside the odds, which is why two books showing what looks like the same line can pay different amounts on the same $100.

The prediction-market model

A prediction market is not a counterparty. It is a matching engine. A fan who thinks the Knicks win is paired with a fan who thinks they lose, and the price is wherever their orders meet, quoted in cents as a probability. A contract on the Knicks at 60 cents pays $1 if they win. With no house position to protect, nobody has a reason to shade the line.

The venues make their money in different ways:

• Novig charges no fee on a straight position taken before tip-off on its app or website. Once a game is live, the trader who takes a resting order pays a taker fee; the trader whose order was resting pays nothing. The rate is on Novig's fee schedule.
• Kalshi charges a taker fee scaled by price, built on a 7% rate. It is largest on a coin flip and shrinks as one side becomes a heavy favorite.
• Polymarket also charges a fee on many sports markets, with a rate that varies by market.

The same game, three returns

Suppose the Knicks trade at 60 cents to win a home game, the equivalent of -150. These are illustrations, not quotes.

At the same 60-cent price, Kalshi's fee costs about $4.54 per $100 against a no-fee fill. The sportsbook gets to a similar place by moving the price instead of adding a charge. Only the no-fee trade pays the full value of the probability on the screen. The board runs this calculation for every Knicks game and sorts each side from best return to worst. How to read the board walks through the formula.

Why this matters in New York

New York has had legal mobile sportsbooks since January 2022, so a Knicks fan in the state can compare most of the major apps against the prediction markets on the same screen. It is also the state fighting prediction markets hardest. The attorney general has sued Kalshi and Polymarket US, a federal judge declined in July to stop the state from enforcing its gambling law against Kalshi, and Novig sued the state in August, a day after launching there, to head off the same treatment. All three were open to New York users as of this week. The New York page sets out where each case stands, and our New York rundown explains what it means for a fan.

Prediction markets are overseen federally by the CFTC rather than licensed state by state, which is why they reach places sportsbooks do not. Novig is a CFTC-designated exchange available in 47 states; the three where it is not available are Arizona, Michigan and Nevada. Novig's current offer for new traders is on our offer page.

What "no fee" does not promise

No fee is not the same as a guaranteed better price. On a prediction market the price comes from other traders and moves with them, and a thinly traded game can show a wider gap between the best buy and the best sell than a sportsbook's built-in margin. When that happens it shows up on the board, because the hold column measures every venue's two sides the same way. A nationally televised Knicks game tends to draw more volume than a Tuesday in November against a lottery team, and the board does not take either on faith; it measures the gap every time it refreshes.

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