Editorial: Prediction markets are a gamble we can't afford

The Seattle Times editorial board, The Seattle Times on Apr 20, 2026

Published in Op Eds

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When will the U.S. government confirm that aliens exist? How many people will fall ill with measles this year? Will President Donald Trump be impeached?

Today, you can bet on all of these — and much more — at the websites of booming prediction markets. Their meteoric rise in just the last year is deeply troubling, and state Attorney General Nick Brown is right to have filed a recent lawsuit to stop Kalshi, one of the largest markets, from operating in Washington state.

These markets, which now amass tens of billions of dollars in bets every month, are a dangerous expansion of gambling. They can turn elections, entertainment and many other events into speculative games for profit, whose consequences policymakers have barely begun to grasp.

At their worst, such betting can descend into a kind of “Hunger Games”-style dystopian future, where wars are fought with billions of dollars placed on who will win or lose.

That’s not hyperbole. One worrying example: an Israeli journalist who was recently pressured over his news coverage by prediction market bettors. He’d reported an Iranian missile had reached a city outside Jerusalem. Some of the bettors, who’d put money against such a missile reaching Israel on March 10, even made death threats against him.

Three main risks should worry Congress, the courts and every American about the rapid rise of these markets. First, how is betting on the first song Bad Bunny performed at the Super Bowl — which topped $100 million in wagers on Kalshi — any different from betting on black at a casino’s roulette table? The company has even advertised it has “cracked the code on legal betting in all 50 states.”

Gambling addiction is a serious public health issue that prediction markets intensify by merging the addictive feedback loops of social media with casino-style wagering.

Second, the financial pressure to pursue insider information to win money on the market is simply too great. An anonymous trader made off with more than $400,000 on Polymarket, another such website, after betting Venezuelan President Nicolás Maduro would be toppled from office by the end of January, mere hours before Maduro was arrested.

Finally, the rise of prediction market betting across society warrants a much bigger discussion around the world it is creating. Proponents, such as the Trump-appointed Commodity Futures Trading Commission Chairman Michael Selig, call prediction markets an innovative force within derivatives trading, to be used as tools within news coverage, culture and policy. But there is a point where the prediction shapes and manipulates the actual outcome.

“What else would we lose about ourselves if the whole world became a craps table?” AG Brown questioned at a March news conference.

Brown is suing to stop Kalshi in Washington but state action is not enough. Congress should define clear boundaries if these prediction markets are to have any future. The moral hazard here is a steep slope: We should all aspire to participate in the world to make it better — rather than attempt to make money predicting its demise.

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