The Average Guys Outsmarting Wall Street on Prediction Markets
The New York Times • • business
Key Points:
- Prediction markets like Polymarket and Kalshi allow users to trade on future events, ranging from political outcomes to sports and weather, with a trading volume reaching $25 billion in April 2024.
- These platforms, while insisting they are not gambling sites, have become mainstream, partnering with major media outlets and attracting nearly 40% of American men aged 18 to 34.
- Regulatory challenges have marked their rise, including attempts by the Commodity Futures Trading Commission (CFTC) to restrict their operations, but legal victories, such as Kalshi's 2024 court win, have paved the way for legal election betting in the U.S.
- Despite investigations, including an FBI raid on Polymarket's CEO's home, no charges were filed, and Polymarket secured CFTC approval in 2025 after acquiring a federally licensed derivatives exchange.
- Users can wager on a wide variety of events with no house edge, meaning every dollar lost by one participant is won by another, distinguishing these markets from traditional gambling or sports betting platforms.