\n<\/p>\n
Yadin Eldar, 21, has been betting on prediction markets since 2019. His friends think he\u2019s \u201ccrazy\u201d, he said. But the craze surrounding these platforms is rapidly gathering steam.<\/p>\n
Users can bet on virtually anything, from the outcome of Sunday\u2019s Super Bowl to whether the US will invade Greenland, every second of every day.<\/p>\n
Hundreds of millions of dollars are now wagered each week, generating odds that users promptly screenshot, post and meme far and wide, from social media feeds to mainstream news networks.<\/p>\n
Polymarket and Kalshi, two of the leading platforms, collectively saw about $1.2bn in trading volume on Sunday, according to analysis by Piper Sandler, as the Super Bowl spurred a betting frenzy.<\/p>\n
Polymarket odds on which movie will win Best Picture at the Academy Awards<\/p>\n
\u201cI wouldn\u2019t describe it as gambling,\u201d stressed Eldar, a student at Florida State University, but \u201ca mix of betting and options trading\u201d.<\/p>\n
\u201cIt\u2019s not like when you go to the casino, and play against the house, and hope you get to win against the house,\u201d he said. \u201cThat\u2019s not what it is.\u201d<\/p>\n
Zachary Azra, 20, sees things differently. \u201cA prediction market is another way to gamble money that\u2019s framed in a way that looks like good investments,\u201d said Azra, an economics student at the University of North Carolina at Chapel Hill who has been using the markets for five months.<\/p>\n
Gambling, at least in the conventional sense, is closely scrutinized \u2013 and, in some cases, significantly limited \u2013 by regulators. In Las Vegas, for example, you must be 21 to place a bet in a casino. Legalized sports betting platforms remain banned in some states, such as California and Texas, and are also prevented from serving users under the age of 21 in many of the states where they are allowed.<\/p>\n
Prediction markets are different. They are available in every state. They allow users as young as 18 to place bets. And they are not restricted to certain areas, like sports betting.<\/p>\n
As more and more money is bet on these platforms, whether or not they are, indeed, gambling platforms \u2013 and treated as such \u2013 is the subject of fierce debate. Should they be regarded as a legitimate, federally regulated product, or as a sneaky loophole that rewires gambling regulation?<\/p>\n
\u201cThese types of markets have been around for quite a long time,\u201d said Harry Crane, a statistics professor at Rutgers University. But in the US, he added, they \u201chave historically been limited to US gambling laws and betting laws, which are very restrictive\u201d.<\/p>\n
But the leading platforms \u2013 like Polymarket and Kalshi \u2013 argue what their users are doing is more akin to investment.<\/p>\n
For years, the industry fought with the Commodity Futures Trading Commission, the US federal agency responsible for overseeing financial derivative markets, for its leading operators to be treated as derivatives platforms, rather than betting platforms.<\/p>\n
Prediction markets say they offer \u201cevent contracts\u201d, tied to events where the payoff structure is binary. Either the event occurs and a payment is made, or it does not and no payment is made. If you bet the Seahawks would clinch Sunday\u2019s Super Bowl, you\u2019d receive winnings; if you bet on the Patriots, you would not.<\/p>\n
They are regulated as financial products \u2013 despite the fact that they can look and feel indistinguishable from gambling.<\/p>\n
The Biden administration tried to crack down on the market. In November 2024, the FBI raided the home of Shayne Coplan, the CEO of Polymarket, for allegedly allowing US-based users to bet on the site despite a ban. Polymarket claimed the raid was retaliation for its users betting overwhelmingly that Donald Trump would win the election.<\/p>\n
The Trump administration has taken a markedly less tough stance on the industry \u2013 with which it has close ties. Donald Trump Jr, the president\u2019s eldest son, is currently both an investor in and an unpaid adviser to Polymarket, as well as a paid adviser to Kalshi. And Trump\u2019s social media company, the Trump Media & Technology Group, recently announced it would start its own platform called Truth Predict.<\/p>\n
The president\u2019s business empire is getting involved in an industry which is an increasingly visible force in politics. Less than two years ago, prediction markets dominated discussion around the presidential election campaign as Trump boasted that \u201cgambling polls\u201d put him far further ahead than convention opinion polls. Now a string of established media outlets have signed partnership deals with Polymarket and Kalshi, lending them a fresh layer of legitimacy by quoting their odds in news coverage.<\/p>\n
Crane, the Rutgers professor, suggested that prediction markets have benefited from traditional media outlets and polling organizations losing credibility with a large segment of the population. People are still \u201cinterested in knowing the truth\u201d about outcomes, he said. \u201cFinding an alternative that\u2019s not relying on the legacy media and the legacy polling outlets is appealing.\u201d<\/p>\n
\u201cLots of people are very interested in politics, and they want to know what the true state of the world is,\u201d said Grant Ferguson, a political science instructor at Texas Christian University. A key draw of prediction markets is their speed and constant availability. \u201cThat market updates all the time. It\u2019s not like the stock market that has set hours. It\u2019s open all the time, 24\/7,\u201d Ferguson said.<\/p>\n
During election campaigns, Ferguson noted, prices can swing \u201cduring debates or when early voting returns start coming in\u201d, delivering an always-on indicator that feels more immediate than a poll that could be released days after it was initially collected.<\/p>\n
But Eldar, an economics major at Florida State, pushed back on the idea that prediction market odds could serve as an alternative for political polling. \u201cIt\u2019s another tool,\u201d he said. \u201cI don\u2019t think it\u2019s a replacement for polls at all.\u201d<\/p>\n
The relationship is intertwined, according to Eldar. \u201cYou need the polls in order to decide the odds, and the odds play off the polls,\u201d he said.<\/p>\n
Unlike sports betting, where professional athletes who typically decide the outcome of bets are more often than not banned from placing bets themselves, prediction markets in politics allow users to gamble on elections their votes can help decide. And through feedback loops, these markets could (and probably have) influenced the very events they claim to predict.<\/p>\n
Widely cited market odds one way or another could \u201cabsolutely\u201d influence voters or political narratives in a campaign, said Ferguson. For example, if a market suggested one party would win an election with an overwhelming probability, some voters might not see a point in casting their individual votes. \u201cThe vast majority of people do not understand prediction markets to the same degree as they think they might,\u201d he cautioned.<\/p>\n
Concerns of insider trading also loom large.<\/p>\n
Prediction markets thrive on what Crane called \u201cthe moment the first person finds the information\u201d, and are designed to reward people who are \u201cbetter at getting information, faster at getting information\u201d, oftentimes in ways that appear suspicious.<\/p>\n
Polymarket odds on whether Trump will acquire Greenland before 2027<\/p>\n
Bets on the Venezuelan opposition leader Mar\u00eda Corina Machado winning the 2025 Nobel peace prize spiked shortly before the official announcement, for example, prompting allegations of insider trading. It was later determined that the leak was probably created by scraping already public metadata from the Nobel prize website.<\/p>\n
\u201cThe information was, for all intents and purposes, publicly available, even if it wasn\u2019t readily available,\u201d Crane said, raising questions about where the line is drawn for what should and shouldn\u2019t be considered insider trading in the world of prediction markets.<\/p>\n
The New York representative Ritchie Torres introduced draft legislation in January \u2013 designed to curb the risk of insider trading by federal officials and their staff \u2013 after what his office described as a suspicious Polymarket trade timed around the US operation in Venezuela. A new account placed a bet of more than $30,000 on Polymarket that Nicol\u00e1s Maduro would be removed from office hours before the raid began.<\/p>\n
\u201cPeople do not like the idea of members of Congress engaging in any kind of financial transactions that might border on corruption,\u201d said Ferguson.<\/p>\n
As Polymarket operates on a blockchain, making it an ideal platform for a trader who doesn\u2019t want to be identified, Eldar noted it would be hard to enforce a ban on officials. \u201cI\u2019m all for it,\u201d he said. \u201cBut I just don\u2019t see how it\u2019s going to work.\u201d<\/p>\n
There is widespread concern that prediction markets carry the same dangers as gambling. \u201cThe buying and selling of futures contracts via prediction markets carries substantially similar levels of risk to the consumer as traditional sports betting, including risks associated with chasing losses, impulsive behavior, financial harm, and the development or escalation of gambling-related harm,\u201d said Cait Huble, director of public affairs at the National Council on Problem Gambling.<\/p>\n
She added: \u201cAs consumers engaging with prediction markets may not recognize their activity as functionally gambling, irrespective of whether legally defined as such, they may be less likely to demonstrate responsible gambling behavior or seek support for a gambling problem.\u201d<\/p>\n
Prediction markets should come with a warning, according to Azra. \u201cThe same way we see people with cancer from smoking, I think we should be the same way about prediction markets, explaining how this is a form of gambling along with all the consequences,\u201d he said. \u201cPeople should know you most likely won\u2019t make money from this.\u201d<\/p>\n
While none of his friends currently partake in prediction markets, Azra doesn\u2019t think it\u2019ll stay that way for long. \u201cI see a future where they get more and more popular,\u201d he said. \u201cAnd I think eventually almost everybody will be into them trying to make quick money if precautions and restrictions aren\u2019t taken.\u201d<\/p>\n
Without intervention, odds are he\u2019s right.<\/p>\n","protected":false},"excerpt":{"rendered":"
Yadin Eldar, 21, has been betting on prediction markets since 2019. His friends think he\u2019s \u201ccrazy\u201d, he said. But the craze surrounding these platforms is rapidly gathering steam. Users can bet on virtually anything, from the outcome of Sunday\u2019s Super Bowl to whether the US will invade Greenland, every second of every day. Hundreds of<\/p>\n","protected":false},"author":1,"featured_media":44356,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[16123,7641,13853,538,6303,2884,2062,1427,7728],"class_list":{"0":"post-44355","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-booming","9":"tag-concern","10":"tag-confusion","11":"tag-gamble","12":"tag-gambling","13":"tag-markets","14":"tag-money","15":"tag-prediction","16":"tag-prompt"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/44355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44355"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/44355\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/44356"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}