An Analysis Just Found Something Extremely Unflattering About What Happens to Users of Prediction Markets

"As Bloomberg reports, the betting platform told it that the analysis was part of an "extortion plot" by the startup that had collected the data, Juice Reel - before, even more puzzlingly, backing off from the stunning claim. The report was conducted by Jordan Bender, an equity research analyst at the bank Citizens. Using Juice Reel's data, it found that in the first three months, users on prediction markets like Kalshi were losing more money than on traditional gambling sites like FanDuel and DraftKings, in proportion to the amount of money they wagered."

"If true, the findings put a considerable dent in prediction markets' self-styled image as a more cerebral form of betting, allowing customers to place wagers on a variety of real-world events, ranging from presidential elections to natural disasters to military interventions. And because bettors are competing against each other, instead of the house, these sites claim that means users have a more reliable way of making money."

"Though they're essentially dressed-up casinos, they also seek to be seen as an authority on the future itself. Last month, for example, Kalshi partnered with CNN to provide real time prediction data on its broadcasts. Polymarket announced a similar partnership with Dow Jones, the publisher of The Wall Street Journal, barely a week later. These add heft and credibility to their projections, even though Kalshi's and Polymarket's projections are entirely determined by users' bets."

An equity research analysis using data collected by Juice Reel found that, in early usage, bettors on prediction markets such as Kalshi and Polymarket lost a larger share of their wagers than users on established gambling sites like FanDuel and DraftKings. Kalshi initially accused the data-gathering startup of an "extortion plot" and then retracted that claim. Prediction markets position themselves as peer-to-peer marketplaces and sources of foresight, and have formed partnerships with mainstream outlets like CNN and Dow Jones to lend credibility, despite outcomes being fully driven by user bets.

Read at Futurism