Education

Sportsbooks price against the house and embed vig; prediction markets price through peer-to-peer order books. The mechanisms produce structurally different prices — and exploitable disagreements.

After detection, BaseCase tracks whether other books move toward the fair value. Confirmation strength is scored against each book's empirically measured reaction speed.

Cross-market arbs exist when a sportsbook's price differs enough from a Kalshi or Polymarket price that wagering opposite sides locks in guaranteed profit. Rarer than cross-book arbs but more durable.

A naive median across sportsbooks weights every book equally. BaseCase's hybrid fair value blends 60% Pinnacle with 40% cluster-aware weighted consensus, preventing shared B2B platforms from dominating.

Kelly (1956) gives the optimal fraction of bankroll to bet on a +EV opportunity. Quarter-Kelly captures roughly half the long-run growth at a quarter of the variance.

EV is the average return per dollar wagered given true probability and offered odds. Positive EV means a bet is profitable in the long run, even if any single bet loses.