Imagine two college students arguing over whether or not the United States will confirm the existence of aliens by the end of the year. One of the students, amused at the other’s confidence, asks their friend if they’d be willing to put $5 on it. Both agree on the wager, the bet is made, and the two students are now engaged in a gamble.
It seems obvious that this is exactly the kind of activity that occurs on platforms such as Polymarket and Kalshi. Rather than making a bet with a friend, one can instead use their $5 to buy yes/no shares on a prediction market. These websites enable users to gamble by placing bets on whether or not real-world events will occur. If you want to bet that the existence of aliens will be confirmed in 2026 or that the temperature in New York City will reach 40 degrees Fahrenheit on March 4, there is a market for that.
But that is not how Polymarket or Kalshi would describe their services. As states such as Nevada and Massachusetts fight to regulate prediction markets as gambling sites, these platforms are defending themselves by claiming to be financial exchanges subject to federal regulation rather than state gambling laws. In their eyes, buying “yes” or “no” shares on whether Fordham’s basketball team will win their next game is “futures trading,” akin to buying and selling stock rather than actual sports betting.
It is true that what Polymarket and Kalshi offer is distinct from traditional sports betting. Rather than keeping gambling localized to the binary outcomes of sport (Fordham will or won’t win), these platforms transform all real-world events into markets with binary outcomes. Prediction markets can thus be viewed as a symptom of late-stage capitalism, the byproduct of a society in which every aspect of life is consumed by market logic. But before the effects of prediction markets can be ascertained, their rise in popularity must be contextualized.
Since the Supreme Court’s 2018 decision to strike down the federal law prohibiting sports betting, legalized sports gambling has grown into a multibillion-dollar industry.
The growth of prediction markets into a multibillion-dollar industry is part of a general rise in speculative risk-taking behavior among Americans. The rise of retail trading illustrates this phenomenon. Retail trading is when individuals buy and sell securities (such as stocks) for their personal accounts. As reported by CNBC, retail trading “has risen to nearly 20% of daily trading volume” since the COVID-19 pandemic. As exemplified by the popularity of large online communities such as Reddit’s r/wallstreetbets, more individual traders than ever before are opting to play the stock market rather than wait for long-term investments to pay off.
Similarly, the rise of online sports betting shows how speculative risk-taking behavior is becoming normalized to an unprecedented degree. Since the Supreme Court’s 2018 decision to strike down the federal law prohibiting sports betting, legalized sports gambling has grown into a multibillion-dollar industry. One cannot watch an NFL or NBA game without being bombarded with advertisements from companies such as DraftKings and FanDuel, even as players complain about how gambling has intensified harassment from fans. These companies freely promote the idea of speculative risk-taking, even as gambling addiction grows as a public health issue.
Retail trading, sports betting and prediction markets: the holy trinity of high-risk, easy-entry speculation. Anyone with internet access can log on to their online brokerage, sportsbook or prediction market of choice, and the more they risk, the more they stand to gain. It has never been easier to gamble on the stock market, sports, or — in the case of prediction markets — any event that can gather sufficient interest.
When the majority of Americans believe that the economy is rigged, making it big through making a few smart trades or predictions becomes an attractive prospect.
It doesn’t take a genius to know why these kinds of high-risk speculative acts have grown in popularity. Between the rising cost of living, mounting student loan debt, unaffordable housing and stagnant wages for the majority of Americans, the notion of “getting ahead” through hard work and dedication seems increasingly ludicrous. When the majority of Americans believe that the economy is rigged, making it big through making a few smart trades or predictions becomes an attractive prospect. Even if nearly 70% of Polymarket traders do not make a profit, economic precarity can push people into overestimating their odds of success, especially when they look online and see stories of people making life-changing money on a lucky bet. These success stories obfuscate the much larger number of testimonies of loss and devastation brought on by high-risk gambling.
In effect, our late-capitalist society, marked by its wealth inequality and decreasing social mobility, is now burgeoning with industries profiting off of Americans’ structurally motivated desire for easy-entry payouts, regardless of the risk. Prediction markets are the most expansive of these industries, transforming any real-world event into an opportunity to make a financial stake.
This transformation has two effects that fundamentally distort the relationship we usually have with reality.
First, prediction markets commodify belief. This is actually the stated goal of Tarek Mansour, the co-founder of Kalshi, who said last year that, “the long-term vision is to financialize everything and create a tradable asset out of any difference in opinion.” On its face, the idea of a future where every prospective war, natural disaster or pandemic is treated as a financial opportunity seems abhorrent. But on Polymarket, the future is now. I can bet on whether the United States will invade Iran, whether there will be a major earthquake by June 30 and how many measles cases there will be in the United States by the end of the year. To “financialize everything” is to allow tragedy and destruction on one side of the world to become a tradable asset for those on the other side.
When we become wrapped up in the image of probability, we come to treat the representation of reality as more real than reality itself.
The commodification of belief is distortive in two ways. Firstly, it ties belief to a financial stake, which encourages cognitive biases that lead to rigid beliefs rather than open-mindedness. If I believe that my political party will win in the coming election, then I am susceptible to a natural confirmation bias and may favor information that supports what I already believe. But by tying my belief to a bet, I have an extra bias to search for information that supports my position. I am now twice committed to my belief, as being wrong would mean both an intellectual loss and a financial one.
Secondly, the commodification of belief can lead to the normalization of the otherwise outlandish. For example, it is not constitutionally possible for President Donald Trump to run for a third term. But when prediction markets do not disqualify him as the potential Republican presidential candidate in 2028, it legitimizes the possibility of him running. Prediction markets present the price of yes/no shares as probabilities for outcomes. Since the market places a non-zero price on “yes” shares for Trump being the Republican candidate in 2028, it lends some legitimacy to the idea that such an event is, at the very least, plausible.
The transformation of real-world events into monetizable opportunities further distorts our relationship with reality by reframing real-world events as yes/no spectacles. In his book “The Society of the Spectacle,” Guy Debord describes spectacle as “a social relation between people that is mediated by images.”
Prediction markets represent real-world events as images. After all, many events cannot be reduced to yes or no outcomes without flattening their underlying complexity, causes and context. When I see the odds of which movie will win best picture at the Academy Awards fluctuate on my screen, I am not engaging with any of the reasons for why the odds are what they are. I do not need to be part of the greater dialogue of why the Academy picks the way that they do, nor do I even need to consider the artistic merit of the films for myself. I am instead engaged with an artificial number that claims to accurately represent the probability of events in the real world.
As Debord says, “When the real world is transformed into mere images, mere images become real beings.” When we become wrapped up in the image of probability, we come to treat the representation of reality as more real than reality itself. The need to analyze real-world events for ourselves is displaced by a market that claims to be doing so for you.
For these reasons, the rise of prediction markets is of paramount interest to Fordham students. After all, many of us are grappling with the kind of economic uncertainty that largely motivates speculative behavior such as betting on prediction markets. As the cost of living increases and the job market runs dry, the pressure to secure financial stability only grows, and the prospect of making “easy money” on sites like Polymarket and Kalshi becomes enticing. But in engaging with these sites, we make ourselves susceptible to distortions in the way that we view events in the real world. As students learning how to think critically about real-world events, we know how reducing these events to a simple “yes” or “no” flattens their complexity and context. If we want to critically analyze real-world events, we must not let the “odds” substitute engaged understanding with the topic at hand.
