How Prediction Markets Are Taking Control of Everything

"Prediction markets-online casinos disguised as investment vehicles, where you can bet on propositions ranging from who will win a particular sports contest to who will be a bridesmaid at Taylor Swift's wedding-have exploded in the past two years. The monthly trading volume among prediction wagerers has skyrocketed, from $1.2 billion in early 2025 to more than $20 billion in January 2026, according to the blockchain-research firm TRM Labs. The two largest prediction markets, Polymarket and Kalshi, have a combined valuation north of $30 billion, making their founders some of the world's most improbably young billionaires."

"Most Americans who know of these strange hybrid beasts-half futures markets, half slot machines-likely encountered them in one of two ways: in news reports on their use as a tool for political insiders to make easy money wagering on war and death, or by discovering their capacity as a backdoor way to bet on sports in states like California and Texas that haven't legalized sports gambling."

"The war-and-death contracts landed with particular force in early January, when a Polymarket account likely created a week before US forces seized Venezuelan President Nicolás Maduro turned a $33,000 bet on his removal from office into $400,000 in profit, with two other accounts of apparent insiders collectively clearing another $230,000. The timing was difficult to explain without invoking advance knowledge of a military operation so secret that top members of Congress hadn't been briefed on it."

"And then there was Iran. Starting in December, Polymarket booked more than $529 million in bets on whether or when the United States would strike Iran; Kalshi allowed $54 million in bets on when Ayatollah Ali Khamenei would be removed from power, which turned out to mean killed in the joint US-Israeli air strikes on February 28. The New York Times found that in the 24 hours before the strikes, over 300 bets of at least $1,000 flooded in, with at least 16 accounts cle"

Prediction markets have grown rapidly, combining features of futures trading and online gambling. Monthly trading volume among prediction wagerers rose from $1.2 billion in early 2025 to more than $20 billion in January 2026. Polymarket and Kalshi together hold a valuation above $30 billion. Many Americans encounter these platforms through reports about political insiders profiting from wagers tied to war and death, or through their use as an indirect way to bet on sports in states without legalized sports gambling. Examples include rapid profits from bets on the removal of Venezuela’s Nicolás Maduro and large volumes of wagers about US strikes on Iran and the removal of Ayatollah Ali Khamenei, with sudden spikes shortly before strikes.

Read at The Nation