Prediction markets: the hunt for the new ‘dumb money’
As new bettors flock to platforms such as Kalshi and Polymarket, some make easy prey for trading firms and professional gamblers
Related reading
Prediction markets and the casino mentality of 2025
Financial gamification has upended traditional patterns of trust and oversight
Half of ‘long shot’ Polymarket bets on military action are successful
High rate of winning wagers likely to add to concerns that sensitive information can leak on prediction markets
The uses and abuses of prediction markets
Insider bets, low liquidity and regulatory gaps complicate efforts to turn wagers into financial tools
Prediction market Kalshi seeks US approval to offer margin trades
Initiative highlights rapid evolution of events betting from quaint origins offering wagers on Oscars and elections
Betting on prediction markets has exploded over past two years
Value of bets soars from $100mn to $13bn a month
There is method in the market’s madness
But it relies on a host of rosy assumptions going in investors’ favour