Arbitrage with Prediction Markets
Back the outcome at a bookmaker, buy No (or Yes on the complementary title) on Polymarket or Kalshi, and the two legs cover every result. ArbPlay finds the pair, does the share maths and shows the profit after the venue's fee — you pick the venue, set the fee rate, and place the prediction-market buy first.
This guide assumes you already know what arbitrage betting is and what a prediction market is. If “buying No is a lay bet” isn't yet obvious, read that second one first — everything here depends on it.
Step 1 — Pick the prediction market as your lay side
In the dashboard's Lay side panel, choose Polymarket or Kalshi. Two things change immediately:
- The feed reloads against that venue's own data — these are separate feeds, not a re-labelling of the exchange rows.
- The Cover column shows cents plus the $ button decimal (for example 20.0¢ and $5.00). Open a row: the breakdown tells you to Buy Yes or Buy No at that cents price — that is the click on the venue.
Your choice is remembered, so the next session opens on the same venue.
Step 2 — Set the fee rate
The calculator bar's second field is labelled commission for exchanges and fee for prediction markets, because they are genuinely different things. Enter the venue's taker coefficient:
| Venue | Enter | Notes |
|---|---|---|
| Kalshi | 7 | Coefficient 0.07, rounded up per trade |
| Polymarket (sports) | 5 | Raised from 0.03 in July 2026 |
| Betfair / OrbitX | 2–5 | Flat commission on net winnings |
Check the rate yourself
ArbPlay pre-fills these and stores your value per venue, but fee schedules change — Polymarket's sports rate moved in July 2026, and a stale rate makes every profit figure optimistic. Confirm against the venue's current fee schedule and adjust the field.
Step 3 — Enter your stake
The Stake field is the amount you intend to place on the back leg at the bookmaker. Every visible row recalculates against it, so set it to a realistic figure before you start comparing rows — a margin that looks fine on €100 may not survive on €500 if the liquidity isn't there.
Step 4 — Read the breakdown
Expand a row and you get the two legs plus what you pay. For an exchange it reads Back / Lay / Liability. For a prediction market it reads:
| Line | Meaning |
|---|---|
| Back | Your stake and the bookmaker's odds — the leg you place at the sportsbook. |
| Cover | Cents plus the $ button decimal in the table — match this on Polymarket or Kalshi (Buy → No is usually $5.00-style, not a 1.25 Yes figure). |
| Buy Yes / Buy No | Which contract to buy and the cents price. The chip shows Amount $X — dollars to spend, not share or contract count. Kalshi’s dropdown still says Dollars; type the same number. |
| Type this | The first number on the numbered step — $X (€Y) or £X (€Y). Type the $ or £ at the venue, not the euro in brackets. |
| You pay | What you debit for those shares, in dollars with euros in brackets — the capital locked on that leg. |
Beneath those sits the profit and ROI. Both are in euros. The ROI is calculated on the capital actually tied up — back stake plus what you pay on the prediction market — not just the back stake, so it's comparable across venues.
Type the first number
Stake is always euros. When a leg shows $157.92 (€146.22) or £90.35 (€104.17), type the dollars or pounds at that venue. The euros in brackets are the same money, converted at the feed rate so rows compare.
The ⚠ marker
A warning glyph on a row means the margin is positive before fees but Profit is negative after them. At 0% fee the two share a sign. These appear more often on prediction markets than on exchanges, because the taker fee is charged on notional rather than on winnings. Skip them if you are covering.
Step 5 — Check the available size
The size column shows how much is actually available at that price, in euros with the dollar original in brackets. Prediction-market depth is famously uneven: enormous on headline markets, thin on the long tail.
If the available size won't support your stake, either reduce the stake or move on. Partially filling one leg of an arbitrage is not a smaller arbitrage — it's an unhedged bet.
Step 6 — Place the prediction-market leg first
This is the one piece of sequencing advice that matters, and it's the opposite of what most people do instinctively.
A bookmaker's posted price is comparatively sticky. A prediction market is a live order book that can move between your two clicks. So the leg most likely to disappear is the buy — which means it should be the one you secure first. If the bookmaker price has drifted slightly by the time you get to it, you have a slightly worse arb. If the buy is gone after you've backed, you have a naked position.
Before you click
Have both accounts already funded and logged in, in tabs that are already open. Prediction-market deposits are not instant — a bank transfer or an on-chain USDC transfer will outlive any arbitrage on the screen.
Two things that will cost you if you ignore them
Currency drift
Your back leg is in euros; your prediction-market leg settles in dollars. On a 1.5% margin, a 1% EUR/USD move is two-thirds of your profit. ArbPlay shows euros so rows are comparable, but the exposure is real. On large or slow-settling positions, factor it in.
Market rules that don't match
A bookmaker and a prediction market can word “the same” market differently — extra time, retirements, postponements, and how a void is handled. Two legs that settle under different rules are not a hedge. Read both sets of rules once per market type; after that you'll know them.
The 7 arbitrage mistakes guide covers this failure mode and the others in more detail.
FAQ
How do I cover a bookmaker back on Polymarket or Kalshi?
Buy No on the named outcome (or Buy Yes on Kalshi's complementary title, such as Over when the book is Under). ArbPlay's Cover column shows that click as cents plus the $ button decimal; the expanded row names Buy Yes or Buy No and how much you pay in dollars and euros.
What fee rate should I enter for Polymarket or Kalshi?
Use the venue's taker coefficient: 0.07 for Kalshi, and 0.05 for Polymarket sports as of July 2026 — it was 0.03 before that. ArbPlay pre-fills these, but rates change, so confirm against the venue's current fee schedule and adjust the field if needed.
Which leg should I place first?
Place the prediction-market leg first. Its order book moves faster than a bookmaker's posted price, so it is the leg more likely to vanish while you are switching tabs. If the second leg is gone by the time you get there, you are left with a naked position rather than an arbitrage.
Why does the profit show in euros when the venue is in dollars?
Stake and profit are always euros so every row compares. When the other venue is a prediction market, the numbered step shows dollars first — $X (€Y) — and that first number is what you type. Betfair shows pounds first the same way. The conversion uses the feed rate; a move in EUR/USD between placing and settling is still yours.
Related: Polymarket & Kalshi arbitrage tools · What are prediction markets · Prediction markets vs betting exchanges · 7 arbitrage mistakes · all guides.