In an opinion piece for The Atlantic, senior editor Saahil Desai argues that media outlets are increasingly treating prediction markets like Polymarket and Kalshi as legitimate signals of reality. The risk, as Desai warns, is a future where news coverage amplifies manipulable betting odds and turns politics, geopolitics, and even tragedy into speculative gambling theater. Here's an excerpt from the report: [...] The problem is that prediction markets are ushering in a world in which news becomes as much about gambling as about the event itself. This kind of thing has already happened to sports, where the language of "parlays" and "covering the spread" has infiltrated every inch of commentary. ESPN partners with DraftKings to bring its odds to SportsCenter and Monday Night Football; CBS Sports has a betting vertical; FanDuel runs its own streaming network. But the stakes of Greenland's future are more consequential than the NFL playoffs.
The more that prediction markets are treated like news, especially heading into another election, the more every dip and swing in the odds may end up wildly misleading people about what might happen, or influencing what happens in the real world. Yet it's unclear whether these sites are meaningful predictors of anything. After the Golden Globes, Polymarket CEO Shayne Coplan excitedly posted that his site had correctly predicted 26 of 28 winners, which seems impressive -- but Hollywood awards shows are generally predictable. One recent study found that Polymarket's forecasts in the weeks before the 2024 election were not much better than chance.
These markets are also manipulable. In 2012, one bettor on the now-defunct prediction market Intrade placed a series of huge wagers on Mitt Romney in the two weeks preceding the election, generating a betting line indicative of a tight race. The bettor did not seem motivated by financial gain, according to two researchers who examined the trades. "More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout," they wrote. The trader lost at least $4 million but might have shaped media attention of the race for less than the price of a prime-time ad, they concluded. [...]
The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolas Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money. [...] As Tarek Mansour, Kalshi's CEO, has said, his long-term goal is to "financialize everything and create a tradable asset out of any difference in opinion." (Kalshi means "everything" in Arabic.) What could go wrong? As one viral post on X recently put it, "Got a buddy who is praying for world war 3 so he can win $390 on Polymarket." It's a joke. I think.
The more that prediction markets are treated like news, especially heading into another election, the more every dip and swing in the odds may end up wildly misleading people about what might happen, or influencing what happens in the real world. Yet it's unclear whether these sites are meaningful predictors of anything. After the Golden Globes, Polymarket CEO Shayne Coplan excitedly posted that his site had correctly predicted 26 of 28 winners, which seems impressive -- but Hollywood awards shows are generally predictable. One recent study found that Polymarket's forecasts in the weeks before the 2024 election were not much better than chance.
These markets are also manipulable. In 2012, one bettor on the now-defunct prediction market Intrade placed a series of huge wagers on Mitt Romney in the two weeks preceding the election, generating a betting line indicative of a tight race. The bettor did not seem motivated by financial gain, according to two researchers who examined the trades. "More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout," they wrote. The trader lost at least $4 million but might have shaped media attention of the race for less than the price of a prime-time ad, they concluded. [...]
The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolas Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money. [...] As Tarek Mansour, Kalshi's CEO, has said, his long-term goal is to "financialize everything and create a tradable asset out of any difference in opinion." (Kalshi means "everything" in Arabic.) What could go wrong? As one viral post on X recently put it, "Got a buddy who is praying for world war 3 so he can win $390 on Polymarket." It's a joke. I think.
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