Since the Supreme Court struck down a federal ban on sports betting in 2018, gambling has rapidly grown into a multi-billion dollar industry. Turn on your TV, and you will likely see commercials for at least one online betting site. Watch any sporting event, and you’ll likely see a couple of gambling ads during every single commercial break. Companies that had very little to do with gambling previously, such as Fanatics, rushed to launch sportsbooks that would rival longtime gambling establishments like MGM and Caesars. Even ESPN tried to cash in on the new craze, briefly launching ESPN Bet before it disbanded in December 2025.This is hardly surprising, given the absurd amount of cash raked in by the gambling industry. In 2023, the American Gaming Association reported that commercial sportsbooks handled $121 billion in customer money.
The rapid expansion of gambling has had significant downsides. Gambling addiction is at an all time high. People are taking on debt to fund their bets, leading to a record number of bankruptcies. Research has also found links between gambling and increased rates of depression, anxiety, and suicide. Within the past five years, Major League Baseball has fired an umpire for having a sportsbook account, the National Football League has suspended 10 players for violating its gambling policies, and a National Basketball Association player and coach were arrested for gambling crimes. The growth of sports gambling has left fans unable to fully trust that the games they are watching are fair, with every missed call by the referees or bad play by a player leading to conspiracy theories and accusations of illegitimacy.
However, one type of gambling company operates in a way that is so fundamentally evil that the regular sportsbooks look like saints in comparison. Prediction markets are a type of gambling company that allows players to bet on the outcome of certain events. In addition to sporting events, users can bet on things like the weather or the price of crypto. In a prediction market, instead of betting against the house, users bet against other users who predict the opposite result, with the prediction market taking a small amount of money in fees, ensuring a profit no matter the outcome of the event. This way of betting still leads to the same problems discussed above, but it is, in and of itself, no more problematic than regular sports betting.
The problems with prediction markets are apparent in just about everything else that they do. In addition to events like sports or weather, prediction markets allow you to bet on just about everything, such as politics, military action, natural disasters, and just about anything else that you can imagine. Kalshi, the largest prediction market, currently allows bets on whether Jesus will return by the end of 2026. For almost a century, betting on politics was illegal, and for good reason: People voted for the candidate that would make them the most money, not the one that they felt had the best policy. In recent years, however, prediction markets have reintroduced political gambling, leading to disastrous potential consequences. In our post-Citizens United political environment, where anyone can pour an unlimited amount of dark money into elections with very little oversight or transparency, allowing individuals to profit from a certain election outcome can incentivize heavy election spending by allowing megadonors to win their money back. Additionally, prediction markets are often used as a way to manipulate voters, with large amounts of money being spent betting on a candidate to convince otherwise skeptical voters of their viability.
Of course, the problems with betting on politics pale in comparison to the devastating consequences of some other bets available on prediction markets. In August, prediction markets found themselves in the national spotlight when a Washington man was arrested for starting wildfires because Polymarket allowed users to bet on the size of the fire. This led to calls for prediction markets to be regulated, with senators pointing out the obvious fact that if people can bet on if there will be a fire somewhere, someone will start a fire to try to make money.
Even worse than betting on natural disasters, these same markets also allow users to bet on war. Kalshi, for example, offered bets on whether or not the United States would invade Venezuela. According to CBS News, more than a billion dollars have been bet on different war-related prediction markets. It goes without saying that war is absolutely devastating for everyone involved and is something that should be avoided at all costs. Anybody with any moral compass whatsoever should always want the world to avoid unnecessary wars. Yet prediction markets, by allowing users to make enormous profit in the event of a war, lead their users to the opposite position, celebrating their big payday as soldiers put their lives on the line and innocent civilians get caught in the crossfire.
Of course, all of those problems start with the basic premise that users can profit when a war breaks out. But the prediction market companies managed to find something even more evil than paying people who correctly bet on the start of a war: just not paying them. Polymarket is facing multiple lawsuits from users after refusing to pay out bettors who wagered that the United States would invade Venezuela, claiming that the U.S. incursion in January, where the U.S. military captured Venezuelan President Nicholas Maduro and brought him to the United States, did not count as an invasion. They also face a separate lawsuit after refusing to pay anyone who bet that Ayatollah Ali Khamenei would be out of office by March 1, 2026, citing a rule against users profiting from death. This rule, however, was never disclosed to users until after the U.S.-Israeli strikes killed Khamenei in February. Users who bet on Khamenei being out of office received a refund at the price they paid; those who bet against Khamenei’s removal received nothing at all. Apparently, Kalshi has no problem with themselves profiting from death. Nor are these companies’ refusal to pay limited to war-related bets, as Polymarket faces a separate lawsuit after refusing to pay those who bet on Oracle selling crypto by a certain date, claiming that it was reported too late.
Prediction markets are also a threat to national security. A U.S. Army soldier is facing criminal charges after he placed more than $30,000 in bets on U.S. military action in Venezuela, profiting more than $400,000. In Israel, a military reservist was indicted for betting on the joint U.S.-Israeli strikes on Iran in June 2025. All bets placed by Polymarket users are public, meaning that trades based on classified information pose a grave danger to national security and endanger the lives of U.S. troops. Abnormally large bets can also affect the odds offered in that prediction market, making it more obvious to our adversaries which bets are placed by those with inside information.
Bettors using inside information to gain an advantage is not unique to bets on military operations (just look at the second paragraph for examples of it in sports), nor are they unique to prediction markets as opposed to normal betting sites. Yet prediction markets offer insiders a far easier path to cash in. For one thing, the wide variety of bets available creates a much larger group of insiders able to cheat. For instance, the White House fired a teleprompter operator for betting on the contents of President Donald Trump’s speeches. A Google software engineer is facing criminal charges after betting more than two million dollars on the top Google searches of 2025. These cases, while unusual in the amount of public attention that they received, are far from unique. A New York Times investigation found at least 80 Polymarket accounts that had placed suspicious bets with characteristics of insider knowledge. Meanwhile, Polymarket’s main rival, Kalshi, keeps each user’s activity hidden, providing a far more lucrative environment for insiders looking to make a quick buck. We may never know the true scale of this problem.
To any normal person, the downsides of a gambling website allowing unchecked insider bets should be self-evident. They certainly are to your average sportsbook. Reputable betting websites catch cheaters in a variety of ways. Complex algorithms spot unusual betting patterns. The companies work with major professional and amateur sports leagues, partner with independent monitoring agencies, and refer suspicious activity to law enforcement. Prediction markets do none of that. Shayne Coplan, the CEO of Polymarket, told CBS’ “60 Minutes” that insider bets were “an inevitability” with “a lot of benefits,” adding “what’s cool about Polymarket is that it creates this financial incentive for people to go and divulge the information to the market.” It’s not really clear what’s useful about this. The inside information being used to bet must become public before the bet can cash in. The teleprompter operator betting on the content of the president’s speech does not give the public any information that the public wouldn’t hear from the president a few hours later. Of course, there’s a reason why traditional gambling companies care about insider betting more than prediction markets. In a prediction market, players bet against one another, not against the house. The platform makes its money by charging small fees to each user, not by winning bets. Perhaps the reason Coplan doesn’t care about insiders betting on his website is because he makes the same amount of money whether or not the person betting it gets it right. It makes no difference to Polymarket whether the bettors on its site are making fair bets or rigging the system; they get paid either way.
This brings us to the biggest lie told by prediction market companies. If you look at any of their advertisements or on their website, you may notice that you never see the word “gambling.” This is strange; how can a gambling website advertise without talking about gambling? According to these companies, prediction markets aren’t actually gambling. Instead, they call it “trading,” as if it were the stock market. They call bets “event futures contracts” and odds “prices.” This fancy language cannot change the basic facts. Users have a variety of different events that they can choose from. They then decide whether or not they think the event will happen, and place money on it. If they are right, they get their money back and then some. If they’re wrong, they lose the money. That is fundamentally what gambling is, and no amount of fancy language can change that. The companies know it, too. In Kalshi’s early advertising, they called themselves “the site that lets you bet on anything.” Kalshi also regularly sponsors gambling content, such as the Hustler Casino Livestream. If you listen to news radio, you won’t hear anything about prediction markets, but turn on sports radio and every other ad is for a different prediction market website. The reason is simple: Prediction markets are targeting sports gamblers, not Wall Street traders, because their product is gambling, not trading.
At this point, you’re probably wondering why a gambling company would go so far out of its way to convince its users that they weren’t gambling. After all, gambling is legal in the United States. They do this to avoid state gambling laws. After every advertisement for law-abiding gambling companies, there is a disclaimer explaining the risks of gambling and sharing the number for the problem gambling hotline. Prediction markets don’t do that. Every state with legal online gambling taxes gambling revenue. These taxes vary dramatically by state, with four states each taxing 51% of all sportsbook revenue. By pretending that they offer trading rather than gambling, prediction markets avoid paying that tax. Only 38 states allow sports betting of any kind, and only 31 states allow online sports betting. By pretending that their service is trading rather than gambling, prediction markets are free to operate in all 50 states.
How could any government be stupid enough to fall for such an obvious lie? They couldn’t possibly be that stupid … but they could be that corrupt. In January 2025, Donald Trump Junior was given a spot on Kalshi’s board of directors and a $300,000 stake in the company. In May 2025, the Commodity Futures Trading Commission (CFTC), part of the executive branch led by Trump Senior, dropped an appeal in a case accusing Kalshi of running illegal gambling on politics. Two months later, Don Jr. also took a role on Polymarket’s board. In August 2025, the Department of Justice dropped a lawsuit against Polymarket accusing them of illegally taking bets from U.S. customers. Since then, the CFTC has repeatedly intervened in lawsuits brought against prediction markets by state attorneys general that accused the platforms of hosting illegal gambling. Of course, giving the president’s son equity in a company in exchange for regulatory approval is a textbook case of bribery and obviously highly illegal. Yet for companies whose only function is to allow gamblers to flout state gambling laws, doing something highly illegal is just a normal day.
Prediction markets justify their existence by pretending to serve another function. As their name implies, defenders of prediction markets argue that their ability to predict the outcome of events makes them valuable to society. In his “60 Minutes” interview, Coplan claimed that Polymarket was “the most accurate thing we have as mankind right now.” There’s just one problem with this claim: it’s a complete and total lie. Prediction markets do not produce predictions themselves; they simply aggregate existing predictions of all bettors in the market. Prediction markets also suffer from bias. Because they are a form of gambling rather than trading, prediction markets have been proven to suffer from favorite-longshot bias as bettors look for the best payout rather than the most likely scenario. Prediction market users also tend to be younger, whiter, and wealthier than the country as a whole. No example shows the utter failure of prediction markets more than the 2026 Democratic primaries in early August. Betting odds indicated a blowout victory for progressive candidate Abdul El-Sayed over moderate candidate Haley Stevens. The day before the primary, El-Sayed’s odds on Kalshi peaked at a 98% chance of winning the nomination, with a 70% chance of winning at least 60% of the vote. The next morning, when all the votes were counted, El-Sayed had pulled out the win, but it was far from the blowout that markets predicted. Instead of breaking 60%, El-Sayed failed to break 50%, winning the three-way contest by just one percent of the vote. A week later, in the Wisconsin governor’s race, the prediction markets had an even bigger failure. This time, we don’t even have to look at the margin to see that prediction markets don’t predict anything. Kalshi gave State Rep. Francesca Hong a 96% chance to be the Democratic nominee. Former Milwaukee County Executive David Crowley had just a four percent chance. Any decent political observer could see that this election was far from a guarantee. After all, Hong had never polled above 44% and had spent the weeks leading up to the election explaining that she actually didn’t hate Thanksgiving. The prediction markets, supposedly the most accurate thing available to mankind, were dead wrong. Instead of a Hong blowout, Crowley ended up winning by just 4,000 votes.
Among all the negative things I’ve shared about prediction markets, I have yet to discuss their most evil practice of all. Remember how earlier in this article, we established that prediction markets blatantly ignore state gambling laws? Well, one of the laws that they ignore is the one requiring gamblers to be at least 21. Prediction markets, still pretending to be trading platforms rather than gambling sites, allow users as young as 18. Not only do these platforms allow underage users to bet on their sites, young people are actually the primary target. All of their ads, whether on the radio, TV, or social media, mention the fact that the minimum age is 18. Prediction market apps have also started sponsoring social media influencers who post college-related content and even sponsoring fraternities in an effort to appeal to younger members. Last year, Kalshi tweeted and then deleted a post saying “college campuses are the best place to spark new financial movements and will play a key role in bringing the next 100M users to prediction markets.” Studies have shown that younger people are more susceptible to gambling addictions because the part of the brain used to assess risk does not fully develop until a person’s mid-20s. That is why the laws require gamblers to be 21 or older in the first place. But for prediction markets, the risk of younger users developing gambling addictions is not a problem to be solved but a source of ever-increasing profit no matter the consequences.
If that sounds familiar, it’s because prediction markets have largely copied their playbook from tobacco companies. Like prediction markets, tobacco companies primarily targeted users under 21 because of a higher risk of addiction and despite clear laws prohibiting it. Prediction markets use industry-funded research to “prove” that their industry is safe and effective. For example, Polymarket founded, funds, and runs the Polymarket Institute, which is dedicated to researching user behavior on prediction markets. Once the risks of addiction were known, tobacco companies pretended that their new product, vapes, were beneficial to society as a way to quit smoking. In reality, they presented the exact same dangers under a different name. Prediction markets did the same with gambling. In our culture, tobacco companies are viewed as the embodiment of corporate greed, willing to put profit above human lives. Prediction markets use the same tactics, leaving countless young people with numerous mental health struggles just for a chance to make a quick buck.
American society values the individual far more than the collective. Those who “pull themselves up by the bootstraps” and escape poverty are highly praised, yet the structural reasons that they were ever in poverty to begin with are ignored. On the eve of any major storm, stores gouge the price of groceries and gas, knowing that consumers have no choice but to buy at the jacked-up prices. Ford left the Ford Pinto on the market despite its exploding gas tank, knowing that the cost of lawsuits was lower than the cost of recalling every Pinto on the road. Insurance companies routinely deny necessary care to keep costs down. Prediction markets are a perfect fit for this hyper-capitalistic system. They deliberately get underage people addicted to gambling to boost their profits and routinely violate even the most basic of state gambling laws. They lie to the public about what their product actually is. At the same time, prediction markets serve as the perfect metaphor for that very same system of hyper-capitalism. By allowing everyday people to win money from wars or natural disasters, they turn our fellow citizens’ suffering into a source of profit rather than a problem to solve, all while allowing a select group of insiders to cheat their way to the top at the expense of everyone else. Nothing else comes close to demonstrating just how sick our society truly is.
