Listen to Steve read this post below (14m audio)
What are Prediction Markets?
Imagine a horse race, but instead of the bookmaker setting odds, everyone trades little $1 tickets with each other before and during the race.
Each ticket pays:
$1 if it wins
$0 if it loses
But you don’t usually buy the ticket for $1. You buy it at the current market price. So if the market says a horse has a 45% chance of winning, the ticket might trade for about 45 cents. If the market says it has a 55% chance, the ticket might trade for about 55 cents. You can buy a ‘Yes’ or ‘No’ ticket. The prices are the inverse of each other.
That price matters because it determines your upside. If you buy a YES ticket at 45 cents and it wins, you get $1. Your profit is: $1.00 payout minus $0.45 cost = 55 cents profit. If you buy NO at 55 cents and it wins: $1.00 payout minus $0.55 cost = 45 cents profit.
So the higher the market probability of X occurring, the more expensive the ticket becomes — and the less profit is left if you are correct.
Before the result, the ticket price moves up and down based on what people think will happen, as these markets are live and often changing. If new information makes the outcome look more likely, the ticket might rise from 45c to 70c. You can then sell it before the final result and make money from the price movement.
The market makers take fees for the service of around 1–2%.
So prediction markets are basically a live horse race market where the odds are set by traders, rather than a bookmaker — and every outcome ticket is worth either $1 or nothing at the end.
Two flies crawling up a wall.
If you haven’t already heard, they allow people to bet on — sorry, ‘predict’ — an outcome of pretty much anything. And by anything, they really mean anything. Here’s my top 20 weirdest markets we’ve already seen:
- Will Jesus Christ Return Before GTA 6?
- Will Trump Say “Hottest” During His Meeting With Keir Starmer?
- Will Ukrainian President Volodymyr Zelensky wear a suit before July?
- Is Donald Trump The Real Satoshi Nakamoto?
- Is the Earth Flat? (A market asking a question with a scientifically known answer, essentially serving as a “troll” or sentiment liquidity test.)
- Will TIME Person of the Year be AI?
- Bad Bunny’s Opener: A bet on the specific song Bad Bunny would use to open his halftime performance at the Super Bowl.
- How much snow will fall in Central Park on day X: Traders use Times Square webcams to bet on the exact inch-count of snow during New York megastorms.
- Will an AI-generated influencer hit 10M followers?
- Will AI replace a Fortune 500 CEO officially before 2030?
- Will scientists revive an extinct species, e.g. mammoth, this decade?
- Will a human live past 130 years?
- Will lab-grown meat outsell real meat in any country by 2030?
- Will a billionaire buy a small nation or territory?
- Will a deepfake video spark a major geopolitical incident?
- Will a virtual influencer star in a major Hollywood film?
- Will a YouTuber become a head of state?
- Will Bitcoin hit $1M by 2030?
- Will the US abolish physical cash?
- Will humans land on Mars before 2035?
And yes, you can bet on the stock standard events, like who will win the next election or win a sporting event. But among the things people can ‘predict’ are those where insiders can have direct knowledge (even some of the above fit that), such as government policy decisions, the execution of military operations, upcoming corporate earnings, and technology product releases.
Here’s my Predictions
- I’m predicting an increase in gambling addiction among young men: The key demographic happens to be, you guessed it, 18–34-year-old males. They are currently around 55% of the user base on Polymarket and Kalshi. (Notice how drug dealers call their customers ‘users’ too.)
- I’m predicting insider trading: People with insider knowledge will leverage their positions for profit.
This trajectory on my predictions above is already quite clear.
Young Men: On Polymarket, approximately 84% of all participants have realised net losses, with the top 1% of users, largely automated bots and institutional traders, capturing over 76% of all trading gains. The average account lost over $1000 in 2025.
Insider Trading: In early January 2026, a Polymarket user named “Burdensome-Mix” placed a $32,500 bet on the US-led seizure of Venezuelan president Maduro, winning over $436,000. And in February 2026, six new Polymarket accounts placed highly specific, winning bets that a US strike would occur on Iran by February 28, with the accounts netting $1.2 million in combined profits.
The kicker is these bets, sorry ‘predictions’, can be placed anonymously on Polymarket via crypto wallets.
Is it Gambling?
Of course, the CEOs of these businesses claim the sites are not gambling. The CEOs of Polymarket, Shayne Coplan, and Kalshi, Tarek Mansour, claim their platforms are not gambling hubs, but financial exchanges. And believe it or not, they even call them ‘truth-seeking utilities’.
Their justifications are as follows:
Mansour: “There is no house that wins when customers lose. This means that Kalshi doesn’t hook losers and penalize winners… It’s a financial market, not a casino…. It’s the most accurate thing we have as mankind right now, until someone else creates some sort of a super crystal ball… It creates this information that’s really useful for people.”
Coplan: “Unlike a betting site where you make a bet and it’s against the house, here you own a share. You could almost say it’s similar to a stock, but it’s not a stock…. Prediction markets are an ‘antidote’ to the problems of living in a world where we have an abundance of information but no way to filter the noise and discern what’s real from what’s not.”
Both arguments are total bunk. (Polymarket’s tagline even says: Bet on your beliefs)
Just because people aren’t betting against the house doesn’t mean people aren’t gambling or losing. In casinos, there are plenty of games people play against each other rather than the house — and well, prediction markets are quite literally the house, because they provide the platform. And you know how they say the house always wins? Well, the two big players’ market capitalisations look like wins to me. Kalshi is currently valued at $22 billion, and Polymarket at $15 billion.
And as far as them being truth-seeking utilities, anyone who has ever done a modicum of market research will tell you, unless the population is represented in those surveyed, it doesn’t represent social sentiment. Last time I looked, 18–34-year-old men don’t represent 55% of the world we live in. Thankfully. And just because money is being placed against a belief doesn’t make it an inevitable truth.
Despite this, some important media firms have taken the bait, and are using Prediction Markets as if they are quantitative market research. These include CNN, CNBC, Dow Jones, The Wall Street Journal, Bloomberg and The Economist, who are all now weaving these ‘real-time probabilities’ into their analysis.
(It’s worth noting that as of 2026, the traditional gambling industry and major casino operators have launched a coordinated legal and political offensive against them.)
What about the hedge?
To be fair, there is some non-gambling utility in these platforms. And that is by using them as a hedge against real-world outcomes you could be a loser in. Similar to how a farmer might use futures options to hedge against crop failure.
On a prediction market, maybe someone with student debt, who is worried about a student relief bill not passing, could purchase a contract and get a payout even if a law doesn’t pass. At this point, however, research shows traditional hedging is used by less than 5% of traders.
My net outtake is that prediction markets are the YouTube of casinos: online forums to bet on anything, created by users for users. The house skims markets. Unironically, the social sentiment of prediction markets is no more reliable than the comments section of a viral YouTube video.
While there are some differences, it’s a classic play of redefining a digital market and the language used to dodge regulation. Remember, Big Tech said they are not media companies so they could publish whatever they wanted!
So What?
Why does this even matter to people like me who don’t gamble? It matters because it affects the fabric of society. The next generation, who already have the odds stacked against them (see what I did there!), now have another way to distract them from the real issues.
It’s another piece in the gambling epidemic facing young men — a scourge already doing serious damage. Young men have higher-risk profiles, and their brains are still developing into their late 20s. Worse still, these markets extract from their financial future by leveraging their optimism, risk appetite, and desire to find a path forward in a world that is already difficult to navigate financially.
Our species’ ability to take risks has been a large contributor to the modern world we take for granted. Exploration, new technology, and entrepreneurial success are all a result of calculated risk for improved societal outcomes, and they ought to be encouraged.
But there are some things we should never gamble on, and young people’s futures should be on top of that list.
Keep Thinking,
Steve.
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