NEW YORK – Whether you call them "combos" or "parlays," the business of letting people risk a little to try to win a lot via prediction markets is complicated, costly, and precarious.
That much was made clear during the NEXTPredict NYC conference last week, which offered a crash course in how prediction market combos go from a traders' brain to market maker's liability.
And the key difference between a prediction market combo and sportsbook parlay really comes down to three letters: RFQ.
- Prediction market combos/parlays are booming, with market makers competing to take the opposite side of traders’ bets through rapid quote requests.
- Market makers can profit from losing parlays, but they face major challenges involving capital, fees, complex risk management, and pricing errors.
- Despite legal uncertainty and substantial risks, the market is growing rapidly and creating opportunities for both major firms and smaller specialized traders.
It starts with a "taker" on a prediction market, and their experience can be something like this:
Some guy somewhere pushing buttons on an app. He wants a moneyline. No, a point spread. No, wait, the points, and the Over, and an anytime touchdown scorer, too. For this game. No, wait, for that other game, actually. Ah, you know what? Add another anytime touchdown. OK, here’s how much he wants to risk. Hit send.
But this is just the beginning.
It's after the request is made that the feeding frenzy for PM market makers begins. Whoever is hungriest and has the cash to cover that guy’s potential payout (which he probably won’t get, because the odds are against him) could win the right to take the other side of the guy’s trade.
You can quote me on that
This is made possible by a mechanism called an RFQ, or request for quote.
“It's basically a transaction where somebody says, ‘I want something,’” said Bernard Marantelli, the founder and CEO of White Swan Data and White Swan Predicts (a major PM market maker), during a panel at the NEXTPredict conference in New York City last week.
Marantelli said exchanges (such as Kalshi, Polymarket, Novig, ProphetX, etc.) will then take that request and “fire it out to market makers,” such as White Swan or Susquehanna International Group, “and we reply.”
And then some.
“I’m a researcher that learned to code just well enough to do that.” Bernard Marantelli, Founder and CEO of White Swan Predicts, at NEXTPredict. Pre-register for NEXTPredict 2027: https://t.co/UymaC8JQTp https://t.co/cZfzmb3ceb
— NEXTpredict (@nextpredictio) October 23, 2026
The whole RFQ experience for U.S.-regulated prediction markets began about a year ago. Marantelli said it started out with around $100 million in daily liability for market makers, which grew to about $18 billion in parlay risk for the week that ended Oct. 20.
Marantelli expects that risk will grow further, to approximately $30 billion by the end of the year. He also said that White Swan are “quoting something like 120 million parlays a day at the moment.”
“The growth rate is out of control, really,” Marantelli said.
Albeit in “a good way,” he added. Because the alternative is less business.
However, as anyone who has followed the sports betting industry knows, parlays are supremely popular. Whether they’re called parlays or combos, they are likewise popular with prediction market traders. The people apparently cry out for SGPs and SGCs.
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Standing by
The RFQ process has made it possible to satisfy that demand.
“Parlays have been around for centuries, right? As long as regulated gaming has been around,” said Dean Sisun, the co-founder and CEO of exchange ProphetX, during the same panel as Marantelli. “So the way we approached it was, hey, you know, how do we fit this product into an exchange world?”
The difference between your sportsbook parlay and your RFQ via prediction markets is that there is a “competition” for your business, Sisun noted. There’s an “auction for this transaction,” and market makers like Marantelli are trying to win it.
For ProphetX, there are 30 to 40 “high-frequency” market makers who are prepared to answer a request within a half-second to a second of a user making it. Polymarket, meanwhile, has “hundreds,” according to Jacob Meleka, the technical lead for the RFQ platform at Polymarket U.S.
Some of those shops aren’t all that big; they are what you might refer to as “garage band” market makers. They can participate and make money because they may specialize in something a bit more niche than the big boys, such as by quoting parlays for cricket, elections, or far-flung soccer matches.
“We've actually found that the smaller one- or two-person shops have been doing really well on RFQ and combo specifically, because of that specialization,” Meleka said. “Maybe a larger firm like Bernard's will take the vast majority of the market, but (the smaller market makers) can really specialize down into very niche products such as politics, let's say, and do extremely well.”
Pay (a lot) to play
Maybe here’s where you should be thinking hard about the next prediction market parlay/combo you place. Ask yourself: Why are these people so keen to accept my insane request? How confident am I in this 10-leg touchdown parlay? Do they know something I don't?
But one obstacle for anybody wanting to just jump in and start taking the other side of prediction market parlays is cash. You need it, as Sisun noted that “everything is fully collateralized” right now in the PM space.
Because of how the ostensibly "peer-to-peer" exchanges work, someone who bets a penny to win a dollar needs someone else putting up another 99 cents. Now imagine someone is betting $10 to win $10,000. The RFQ mechanism can tie up a lot of cash in a hurry, even if a market maker is just out to win a few dollars on a trade.
There has been more than $75 billion in notional trading volume in combos and parlays over the past month, according to Aldrin Research. That, however, includes both the "taker" and "maker" sides of a trade.
Out of that overall $75 billion, only $6.7 billion or so was "taker" volume, or the amount of money put up by the combo-seeker. The rest is on market makers, and most of the volume is attributable to sports. Around 96% or so of combo legs are tied to a sporting event, according to Aldrin CEO Sahil Patel.
Bet the process. Also, check the forecast. Congrats to whoever hit us for 185k parlaying Bermuda Championship Top5/10/20 RFQs Sunday morning at 2am. Thank god we had safeguards, otherwise it would have been worse. Market making can be an expensive education. On to Cincinnati.
— Rufus (@RufusPeabody) October 26, 2026
Henry Kerins, CEO of Manhattan Athletic Group, a sports-focused market-making firm that is a wholly owned subsidiary of Novig, said a multibillion-dollar volume day for an exchange like Kalshi could mean that market makers have more than $1 billion in deposits themselves on the platform.
"The exchanges themselves aren't backing this activity," Kerins said during another NEXT panel. "They're not de-risking anybody. None of the market makers have leverage."
Now, some prediction markets own market makers, such as Manhattan Athletic Group. Nevertheless, Sisun said he sees a “massive opportunity for capital allocators” to bankroll market makers.
Yes, there is the risk that one of these combo monstrosities actually hits, and it can be pretty costly. Many more will lose, though.
“For a lot of market makers, you're picking up nickels in front of a bulldozer,” the ProphetX CEO said. “But you're going to do really well in the long term.”
Notional volume on @DKPredictions exchange DKeX hit a record $316M on Sunday, up 42% WoW. Dollar volume has held at $40M–$42M for the last three Sundays. Combos accounted for 78% of Sunday’s notional volume but 31% of dollar volume. We’ve analyzed notional vs. dollar volume across several exchanges. Reach out if you’d like to learn more.
— Aldrin Research (@AldrinResearch) October 19, 2026
Fees are another challenge. Exchanges want takers and makers, and if you extract too much from either, you risk chasing them away.
Then there’s the risk that comes with trying to quote “something like 120 million parlays” a day.
“Because every time a person pushes a button, you don't know whether they're going to transact on the twofold, the threefold, the fourfold,” Marantelli said. “So you need systems that are immense to do that.”
Bill and Ted's Excellent RFQ
Marantelli also noted that there is no “palpable error” that market makers can cite if they accidentally hang a bad line. For sportsbooks, if the odds of one leg in a parlay are obviously wrong, they could cry “palp” and try to void that bet.
“There's no way to void an obvious error in the RFQ world at the moment, so that's a problem that the market makers have to solve,” Marantelli said.
Yet it’s a risk he and others are willing to take. Because there is money to be made at the moment, even if there are clouds continuing to gather over prediction markets. Yes, the legality of trading sports-related event contracts is being challenged in courtrooms across the U.S. but, for now, they remain widely available.
In the meantime, then, people can shop for the combo or parlay of their dreams. While that kind of product might send a chill down the spines of some sportsbook risk managers, there are market makers (which actually include DraftKings and FanDuel, as they are acting as market makers themselves on exchanges) willing to take that bet.
“We've just economically moved the cost of that risk from an internal price engine at DraftKings and FanDuel to 150 people: Susquehanna at one end, White Swan Data somewhere in the middle, and Bill and Ted in their underwear, you know, coming along,” Marantelli said. “And some Bill and Teds will be the next Susquehannas.”
