The 7 January White House press briefing seemed like business as usual for White House press secretary Karoline Leavitt, who was filling in reporters – and right-wing content creators – on the government’s activities. The capture of Nicolas Maduro the night before meant it was an important session. Just 30 seconds before the briefing hit the 65-minute mark, she rushed offstage.
Immediately, the comments section of Kalshi – one of two big US prediction markets – lit up with posters talking not about Venezuela, but the length of the briefing: “STOP TALKING,” one commented. A user who predicted correctly boasted: “S**ts free money y’all”.
The reason? Kalshi had offered odds on how long Ms Leavitt would speak, attracting a $40,000 trade volume.
It’s just one ridiculous subject Kalshi users can put money on: Maduro’s capture; whether Donald Trump will take Greenland before 2027; whether Jeffrey Epstein is alive; when it will be confirmed that aliens exist … In a world where everything is data, everything is a money-making opportunity.
With a survey from Coefficient Capital showing that awareness of the platforms skews heavily towards Gen Z, and as gambling, crypto and sensationalist politics are helpful prerequisites, prediction markets are providing another trap to lure in young men.
Only in America? Don’t bet on it. It’s coming to the UK any day now.
Kalshi’s beginning is actually intertwined with the UK. In an interview late last year, co-founder of the company Tarek Mansour remembered the buzz during his internship at Goldman Sachs, before the UK took the plunge. “I want to get exposure to Brexit. I want to hedge Brexit.”
He and his business partner, Luana Lopes, wondered why, if there was interest, this question couldn’t be offered on an exchange.
The short answer was: regulation. In the US, Kalshi and Polymarket – the other big US prediction market – have been in court battles since they were founded, in 2018 and 2022 respectively. Both Kalshi and Polymarket are fighting suits in a number of states at the time of writing.
The latter was banned from the US until early last year after getting into thorny regulatory problems during the Biden administration. Trump is more forgiving. His administration is currently moving to support prediction market operators in a critical legal battle over regulation.
In its simplest form, what separates a Kalshi from a Paddy Power is the absence of the centralised mechanism to bet against or set odds. Every trade on the platform involves two parties of users buying contracts on each side – Kalshi refers to these parties as the “makers” and the “takers”. The odds of their bet are not set by the “house” but are constructed based on market activity.
Under US law, these platforms are seen as financial instruments rather than gambling products. But the terminology rings alarm bells for Dr Timothy Fong, an addiction psychiatrist on the UCLA Gambling Studies Program. “It’s unclear to me whether it is being advertised as gambling or an investment tool,” he says. “The words used: ‘contracts’ and ‘positions’ are investment words, but the experience is closer to gambling.”
While the platforms do offer sports wagers, it’s the political and cultural questions that have earned them attention – both good and bad. Among many issues, there were accusations around a mystery user who made half-a-million dollars when they put money down the night before the US’s operation in Venezuela, in a move the CEO of Better Markets told CBS had all the “hallmarks of a trade based on inside information”.
Thanks to the platforms mostly using cryptocurrencies, it’s not hard for users to remain largely anonymous, which helps. Following this particular trade, Democrat representative Ritchie Torres moved to introduce a bill to help stop insider trading. But its reach will only ever prohibit federal officials from betting with what they know.
The Maduro example shows that there is a sense of collective forecasting about the platforms that have allowed these companies to sharpen their brand as oracles that allow access to the “wisdom of the crowd”. Polymarket CEO Shayne Coplan has claimed that his site is the most “accurate thing we have as mankind right now”.
In this way, prediction markets rely on Web 3.0’s themes of decentralisation already explored in cryptocurrency and NFTs – two tech phenomena that have drawn in young men before. Whereas Bitcoin drew power away from the classic banking systems, Kalshi and Polymarket are light-footed tech companies stealing authority away from dusty old polling and forecasting companies. This “move fast and break stuff” outlook is mixed with the excitement of sports betting, the professionalism of trading and the fervour of political discourse.
And the latter factor is vital. Politics is increasingly divisive, with some people eager to see those they blame for the state of the world punished: A perfect marketplace for controversial prediction markets. For instance, Polymarket’s “Will Israel strike Gaza on…?” has an almost $2m (£1.5m) trading volume. “There’s a lot of schadenfreude involved; if you like to see the pain in other people, it’ll feel doubly good to make money off of it,” Dr Fong explains.
Could the opposite even be true: I know that this country will be attacked and people will die, which is bad… I may as well make some money out of it?
Maybe it’s all just numbers to be crunched.
Dr Fong highlights the demographic most at risk from this kind of phenomenon. “It’s young men. They like sports. They like the internet. They’re tech-savvy.” Though he is quick to point to a Kalshi advert he saw on US TV of a girl in her pyjamas, with a tagline reading “Kalshi is my second gig.” As the company steal a march on betting sites and polling companies, they could look to branch out to a more general audience.
“They are trying to normalise the platform,” the doctor tells me.
And it could be the start of the UK going down a similar pathway, as Matchbook prepare to launch the opening of its prediction market offering in the UK. “A betting exchange is a challenging proposition for first-time customers,” says Tim Endersby, Matchbook’s solicitor, “The beauty of prediction markets is that it simplifies it down … to a yes or no question.”
Regulation in this country is much tighter, and requires Matchbook to abide by gambling laws. In the US, prediction markets come under the jurisdiction of the Commodity Futures Trading Commission (CTFC), rather than the gambling regulators. In the UK, it is strictly seen as gambling, so it’s unlikely we’ll see bets on how many times Keir Starmer says “toolmaker” in a speech. But they will be offering general election markets and Tim tells me that the company are “keeping an eye on any additional opportunities which may be available in the future”.
Kalshi and Polymarket’s politics are also too obvious to ignore. After all, in some ways, Trump has Polymarket to thank. While polling between him and Kamala Harris remained close on the lead-up to the 2024 election, the prediction market showed a strong likelihood of his being voted in.
The most reasonable explanation for this was that Polymarket users were more likely to be Trump fans, but the platform got the end result right, and Trump shouted them out – posting the odds on Truth Social in the lead-up. The soon-to-be-president had taken notice.
Meanwhile, Donald Trump Jr has been Kalshi’s paid strategic adviser for a year now. He’s also a non-paid adviser to Polymarket. And just like the Trump family, Polymarket has also found a way to engineer political outrage to use it for their gain, through social media.
An update in mid-January from the Polymarket X account states: “BREAKING: DOJ to charge Don Lemon under the KKK Act for allegedly inciting church raid.” It’s not exactly true, as at the time of posting, the DOJ were pursuing charges against the US newsreader; no charges had been announced. But over on the Polymarket site, however, a prediction market opened: “Will Don Lemon be criminally charged?”
These posts often have no link or citation at all. During the New York mayoral elections in October last year, Polymarket posted a picture of Zohran Mamdani crying, stating that his odds had “collapsed”. The attached picture of his Polymarket odds still showed him at 87 per cent, having just lost several points.
In late January, Polymarket posted that Jeff Bezos had said something, only for it to be told that the quote was false… by Jeff Bezos.
Alarmist “reporting” by companies with vested interests and its monetisation through prediction markets become blurred together here. That market could then be framed as a viable forecast, and a loop forms.
These markets have been finding footholds in the mainstream, too. Polymarket predictions featured during the Golden Globes. Predictions even appear in the news runs through Kalshi’s exclusive deals with CNN and CNBC. Both have signed a deal with Google to have odds turn up in search results. More eyes means more users.
What can be lost in analysing this new phenomenon and the leading companies is the danger prediction markets could have on users. “I’ve had young men come to me who use prediction markets for sports, but I’m waiting for the person with an addiction to real-life bets,” Dr Fong tells me.
The dangers of gambling addiction are shown in the recent inquest into the case of Oliver Long, a man who fell victim to “predatory” unregulated gambling websites that “consumed his mind”. Long, 36, died in East Sussex in 2024, sending farewell messages to his family after an initial big betting win descended into addiction.
Prediction markets may be injecting another nefarious layer into this growing gambling problem.
Ironically, the answer to the unique addictive potential may be hiding in a book from 14 years ago about a now-outdated form of gambling.
When anthropologist Natasha Dow Schull wrote Addiction by Design: Machine Gambling in Las Vegas, a compilation of 15 years of field research in casinos, she didn’t realise how poignant her findings would be. Her book described a “machine zone” where slot players would be suspended between short loops of risk and reward, reinforced by the predatory and isolating casino architecture.
“It turns out the slot machine was a great way to consider a lot of modern phenomena,” she says. Over time, people have pulled Schull’s thread from slot machines through to our toxic relationships with smartphones and social media. Refreshing your feed, surveying the results… nothing interesting? Try again. Swap apps.
“Sports betting and day trading apps felt like these theories had come full circle. And then prediction markets slot nicely in as the next stage. I wouldn’t necessarily have predicted them, but I think it makes a lot of sense that people are looking to bet on the outcome of everything,” Schull tells me
Like a dark cloud on the horizon, Kalshi’s name hovers near the end of the foreword Schull has written for a 2026 edition of the book. “Sports betting has turned fans into speculators. Even though these prediction markets are based on real-life events, it’s still this yes/no binary.” Simple and easy, like pulling that lever in Las Vegas – but the casino architecture is in our phones and on the television – peppered in the world around us.
Polymarket, Kalshi and any other budding prediction market platform have turned life into a network of contracts that prey on partisan politics and get-rich-quick dreams, fuelled by the intoxicating energy of betting, social media and smartphones – devices that themselves have become boxes of gamification and dopamine loops. The smart money is on this phenomenon only growing.
