Sports Prediction Markets: How Sports Event Contracts Work

If you follow sports closely, you are likely already familiar with the underlying events, teams, schedules, and other factors that tend to influence outcomes. On the CFTC-regulated Fanatics Markets platform, you can trade event contracts on game outcomes, season-long markets, and championship results across every major sport.

This guide explains how sports event contracts are priced, traded, and settled, as well as what rules, fees, liquidity conditions, and risks to review before entering a position.

What Is a Sports Event Contract?

Every sports market on prediction markets platforms like Fanatics Markets asks a single binary question. Will this team win tonight? Will this city make the conference finals? Will this franchise win the championship? The answer is either yes or no, and the contract settles accordingly.

There are two main types of sports events contracts:

• Game-winner contracts resolve after a single game. If the team you backed wins, your YES contracts each pay $1.00. If they lose, they pay $0.
• Season-long contracts resolve at the end of a season or tournament. For example, 'Will NY win the conference championship?' resolves at the conclusion of the conference final game.

Both contract types follow the same binary structure. The main difference between the two is the time horizon and the number of events that need to go your way.

The price of a sports contract at any given moment reflects the market's collective view of how likely that outcome is. For instance, a YES contract trading at 71 cents means the market implies a 71% win probability. If you think the true probability is higher than that, you could buy YES. If you think the market is overestimating the team's chances, you would buy NO.

For a broader explanation of how prediction markets work, see our complete guide to prediction markets.

What Sports Can You Trade on Fanatics Markets?

Fanatics Markets covers most major sports verticals. Markets run across the full calendar year, though exact season timing depends on the sport in question. Here is what's on offer:

Markets are available daily and around the year. With prediction markets, prices update continuously as new information comes in. Live and upcoming events are organized by sport and date on the platform, making it straightforward to find what's trading right now.

Explore live sports markets on Fanatics Markets at fanaticsmarkets.com/sports.

How to Trade Sports Markets

The trading mechanics are the same across every sport: Find the market, read the price as a probability, form a view, and take a position. Here is how each step works in practice.

Step 1: Find a market

Browse sports markets at fanaticsmarkets.com/sports or search for a specific upcoming event. Markets are listed by sport, event date, and contract type. At any time, you can see the current YES and NO prices, the event's resolution date, and recent price activity before you commit to anything.

Step 2: Read the current price

The YES price is the market's implied probability at a given time. If 'Will PHI win tonight's game?' is trading at 65 cents YES, the market is saying PHI has a 65% chance of winning. The NO contract at 35 cents represents the inverse opinion.

Step 3: Form your view

Ask yourself whether the current price reflects reality as you understand it. If you think PHI is actually a 75% chance based on your knowledge of things like their recent form, the matchup, injury reports, and travel schedule, there's a potential edge at the current price of 65 cents. If you agree with 65%, there may not be a reason to trade.

Step 4: Buy YES or NO

Select the direction that matches your view, enter the number of contracts you want, and confirm your trade. The platform shows your total cost (with fees) and potential payout before you commit. If your contracts settle at $0, you could lose the entire amount you paid to enter, plus fees.

Step 5: Monitor, sell, or hold to settlement

As the sporting event develops, the price will move over time. You can sell at any point before resolution to lock in a gain or limit a loss. You can also decide to hold to settlement: if your position is correct, each contract pays $1.00.

*Prices are for illustration only. Pricing subject to change — see Fanatics Markets App.

For a complete step-by-step guide to trading event contracts, see our guide on how to trade prediction markets.

What Should You Check Before Trading Sports Contracts?

Sports knowledge can help a participant understand the information affecting an event, but familiarity with a team or league does not guarantee an accurate forecast or profitable trade.

Before entering a sports event contract, check:

• Contract wording: What precise outcome must occur?
• Settlement source: Which source determines the official result?
• Current price: What probability does the executable price approximately imply?
• Available information: Are lineups, injuries, schedules, weather, travel, or tournament rules relevant?
• Liquidity: Is there sufficient depth for the intended order and a possible later exit?
• Fees: How do entry and possible exit fees affect the result?
• Time horizon: How long could funds remain committed?
• Exceptional outcomes: What do the rules say about postponements, cancellations, ties, corrections, or abandoned events?
• Loss capacity: Can the full contract cost and applicable fees be lost without affecting essential expenses?

A well-researched view can still be wrong, and a market can move against a position. If the current price already reflects your assessment, there may be no reason to trade.

Sports Prediction Markets FAQ

1. How do sports prediction markets work?

To trade in sports markets, you choose between YES/NO contracts on sporting outcomes on an open exchange. The price of each contract reflects the market's implied probability of that outcome at a given time. You can buy YES if you think the event will happen, NO if you think it won't, and sell your position at any time before the event resolves. See our complete guide for a full explanation of how prediction markets work.

2. What is a sports event contract?

A sports event contract is a YES/NO binary contract tied to a specific sporting outcome. If the event happens, YES contracts pay $1.00 each and NO contracts pay $0. If it doesn't happen, NO contracts pay $1.00 and YES contracts pay $0. If your contracts settle at $0, you could lose the entire amount you paid, plus fees. You may lose the entire amount you invest.

3. What sports can you trade on Fanatics Markets?

Fanatics Markets covers event contracts across Pro Football, Pro Basketball, College Football, College Basketball, Baseball, Soccer, and Hockey. Contract types include game winners, playoff series outcomes, season-long markets, and championship contracts. Explore what's live at fanaticsmarkets.com/sports.

4. What makes trading sports prediction markets unique?

Sports prediction markets are peer-to-peer exchanges where prices on sporting events are set by supply and demand between participants on an open order book. You can also exit a prediction market position at any time before the event resolves by selling your contracts at the current market price. If your contracts settle at $0, you could lose the entire amount you paid, plus fees. You may lose the entire amount you invest.

5. Can you trade pro football games on prediction markets?

Yes. Fanatics Markets covers game-winner contracts, season-long markets, and conference championship contracts for Pro Football. Markets are available throughout the season from September through February. Browse pro football markets at fanaticsmarkets.com/sports/american-football.

6. How do you make money trading sports prediction markets?

You may lose the entire amount you invest, as every position can settle at $0. When a trade goes in your favor, you can profit by buying a contract below the probability you believe is correct and having the event resolve that way, or by selling your position at a higher price than you paid before the event resolves. There are no guarantees of profit.

7. What is the minimum amount to start trading sports markets?

The minimum trade on Fanatics Markets is one contract, with a minimum payout of $1.00. The actual cost depends on the contract price; a 20-cent contract costs 23 cents to enter (contract price plus the applicable per-contract fee). Only trade money you can afford to lose entirely. You may lose the entire amount you invest.

8. Can you exit a sports trade before the game ends?

Yes, you can sell your position at any time before the event resolves. If the price has moved in your favor, selling locks in a gain. If the price moves against you, or new information has changed your view, selling limits your loss.

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*HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.