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When we first started talking about prediction markets in the early days of the FiveThirtyEight Politics podcast, back in 2016, they were something of a novelty and a joke.
My then-colleague Clare Malone once quipped, “Who’s even putting money on these markets … Scottish teenagers?” From then on, we referred to online bettors as Scottish teens.
Back then, the prediction markets that got the most attention were Betfair, based in the U.K., and PredictIt, based in New Zealand. Both took off in terms of volume and media attention during Brexit and Trump’s first election. But after 2016, PredictIt got bogged down in regulatory drama, and Betfair was largely inaccessible to Americans. In their place, Kalshi and Polymarket became the main characters in the American prediction market story.
Today, prediction markets are no longer much of a novelty or a joke.
Recently, an active-duty U.S. Army soldier was charged with using classified information for personal gain after he made more than $400,000 betting on Maduro’s ouster on Polymarket. He was allegedly involved in planning and executing Maduro’s capture.
Betting trends point to potentially similar insider knowledge being used in Iran War prediction markets in February and March of this year. And Israeli prosecutors filed indictments against an Israel Defense Forces reservist and a civilian for allegedly using classified military intelligence to bet on Polymarket in the run-up to strikes on Iran last summer.
The list goes on. Kalshi suspended three American political candidates for insider trading after an internal probe found they had bet on their own campaigns. Weather instruments at Charles de Gaulle Airport in Paris appear to have been tampered with in order to rapidly increase the temperature — perhaps with a lighter or hair dryer — and cash in on a weather prediction contract.
As things stand, prediction markets seem likely to keep growing in popularity and media attention. On Polymarket, more than half a billion dollars has already been wagered on the outcome of the 2028 presidential election. One estimate suggests that total volume across prediction markets could reach $1 trillion annually by 2030.
Meanwhile, lawmakers in Washington and the states are increasingly talking about cracking down on the markets, and state attorneys general have been filing lawsuits.
So today, we’re diving into the messy world of prediction markets: their history, how they work, the arguments for and against them, how they’re regulated, and what their future holds.
Joining me is Jacob Studwell, growth and engagement officer at PredictIt — home of the Scottish teens.
