Prediction markets have a fake news problem

"How it works: Kalshi and Polymarket represent a new generation of digitally native companies, shaped far more by the culture of X and crypto than by traditional media and finance. That online fluency has helped fuel explosive growth: Both platforms now handle billions of dollars in weekly trading volume and are fixtures of X's "For You" algorithm. But it's also pulled them toward engagement bait - content designed to spark outrage, tribal reactions or rapid sharing, even when facts are thin or context is missing."

"That engagement-first approach is increasingly at odds with how prediction markets present themselves - as responsible, regulated platforms that claim to cut through the noise. That tension was on display this month when Polymarket falsely attributed a "JUST IN" quote to Jeff Bezos - prompting a rare public denial from the Amazon founder on X. Polymarket, which hasties to Trumpworld, has repeatedly targeted MAGA adversaries - including New York City Mayor Zohran Mamdani and Rep. Ilhan Omar (D-Minn.) - with false, misleading or trollish claims."

"Amid the chaos over immigration raids in Minneapolis, Polymarket's X account claimed President Trump had deported so many people from Minnesota that the state was projected to lose a congressional seat after the next Census. Polymarket later deleted the misleading post - seemingly based on a Substack headline from a conservative commentator - but not before it had been amplified by the Department of Homeland Security."

Kalshi and Polymarket have expanded into mainstream media, sports, and influencer partnerships as valuations and reach have surged. Their social accounts operate with few journalistic rules while posts can spread faster and farther than verified reporting. The companies emerged from X and crypto culture, and online fluency drove explosive growth: both now handle billions of dollars in weekly trading volume and appear in X's "For You" algorithm. That same approach encourages engagement-bait content designed to provoke outrage or tribal reactions, often with thin facts or missing context. The engagement-first strategy has produced false, misleading, and amplified claims tied to high-profile figures and crises.

Read at Axios