Your favorite team is playing, so you do the usual by placing a bet on them to either win or at least score a goal. If they do, depending on the odds, you get a payout. If they don’t, you lose all the money you staked.
Here’s a different scenario: instead of betting on your favorite team to win this time, you trade. This means you buy shares in a market and predict the winner or who gets the higher Sofascore rating. If new information comes in, maybe a change in lineup, an injury, or anything else, the value of the shares fluctuates and you can sell the shares you have to secure profit or cut losses.
This is the fundamental difference between betting platforms and prediction markets. Both allow you to speculate on future events, but they operate in different ways. Let’s explain how!
What are Betting Platforms?
Betting platforms are websites or apps where people place bets on uncertain future events, mainly sports matches.
You choose an outcome, put down your money, and if your guess is correct, you win a payout based on the odds at the time of your bet. A typical example is betting on your favorite football team to win a match, or predicting the final score of a game.
The key attraction of betting platforms is the thrill of taking risks and the possibility of making money. Many people see it as a fun way to test their knowledge of sports or other events. But, because it’s gambling, it’s heavily regulated in most places.
What are Prediction Markets?
Prediction markets, on the other hand, are platforms where users buy and sell shares based on the likely outcome of future events.
These markets work like stock trading, but instead of trading company stocks, you’re trading predictions. Each share’s price reflects how likely people think a specific outcome is.
For example, a market might let you buy shares on whether a particular team will win the league. If the team is likely to win, the share price will be high. If not, it will be low.
Unlike betting, you can buy shares when the price is low and sell when it’s higher or hold until the market resolves and still get cash payouts.
One of the main reasons prediction markets exist is to gather collective opinions and forecast outcomes. Instead of betting against the house like in traditional betting, you’re trading with other users. This makes prediction markets feel more interactive and community-driven.
Learn more: How to Profit from Predictions on Real-World Events Online
Betting vs Prediction Markets: Key Similarities
| Similarity | Betting Platforms | Prediction markets |
| Wagering on Future Outcomes | People place bets on things that might happen in the future, usually in sports, hoping to win money if they guess right. | People buy shares based on what they think will happen. If they guess correctly, they get paid. |
| Market Influence | The odds change based on how many people are betting on a particular outcome. Bookmakers tweak the odds to reduce their risk. | The prices of shares go up and down based on what most people think will happen. The market price shows the public’s opinion on how likely an outcome is. |
| Risk and Reward Mechanism | Odds show how likely an event is to happen. Betting on a favorite gives a smaller payout, while betting on an underdog offers a bigger one. | The price of shares matches how likely an event will occur. Shares for more likely outcomes cost more, while less likely outcomes have cheaper shares but promise higher rewards if correct. |
| Entertainment and Engagement | People enjoy the excitement of guessing outcomes and testing their knowledge, especially with sports and big events. | People are drawn to the challenge of making accurate predictions and possibly earning money, making it exciting to follow ongoing events |
Betting vs Prediction Markets: Key Differences
| Difference | Betting platform | Prediction market |
| Primary goal | The main goal is to gamble and have fun by placing bets to win money. | The focus is on making predictions and gathering opinions to figure out the chances of different outcomes and still get cash payouts. |
| Market structure | Companies or bookmakers set the odds and control payouts. | Users set the prices themselves by buying and selling shares, making it more of a peer-to-peer system. |
| Profit mechanism | You either win or lose money based on your bet, and the payout is fixed when you place your bet. | You make money by buying shares at a low price and selling them at a higher price if the odds shift in your favor, or by holding shares until the event is over. |
| Nature of participation | You’re betting against the house or bookmaker, without much interaction with other users. | You’re trading directly with other people in the market with different opinions, making it more interactive and dynamic. |
Learn More: How to Predict Football Matches Correctly
Betting vs Prediction Markets: Which One Is Right for You?
Choosing between betting platforms and prediction markets depends on your preferences and goals. If you’re looking for the thrill of gambling and fast-paced entertainment, betting might be more your style. On the other hand, if you enjoy making strategic decisions, prediction markets offer a more interactive experience.
Both options come with risks, so it’s important to understand how they work before diving in. But undoubtedly, prediction markets offer a safer way to get returns on your invested cash.
On GoWagr, there are lots of sports markets you can invest in to show your football knowledge. If you’re right, you get cash payouts, or you can simply sell your shares.
Final Thoughts
In betting vs prediction markets, there’s no clear winner. Each platforms have their own appeal, attracting users for different reasons. While betting is more about taking a chance and hoping for a win, prediction markets focus on gathering collective opinions and using data to forecast outcomes. Understanding the similarities and differences can help you make more informed decisions about which one suits you best.
Download the GoWagr app to explore the prediction market and trade on all open sports markets. Happy predicting!
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