Prediction markets and sports betting are not forms of investing, despite how some fans portray them.

Prediction market Kalshi's CEO Tarek Mansour ​​has said that prediction markets are similar to the stock market—except instead of buying and selling shares of companies, users buy and sell "yes" or "no" on whether an event is going to happen or not.

Prediction markets—the platforms where users can trade bets that pay out depending on certain event outcomes—have faced questions about insider trading.

How prediction markets differ from sportsbooks matters for regulation

There are a number of differences and similarities between sportsbooks and prediction markets, despite both allowing people to bet on outcomes for sports-related events. For instance, prediction markets typically earn revenue through transaction fees rather than taking directional exposure to outcomes.

Modern prediction markets—the platforms where people can trade bets that pay out depending on certain event outcomes—started in Iowa in 1988.

The prices on prediction markets reflect how the collective forecasts future outcomes.

Prediction markets convinced regulators they're not gambling, but exchanging commodity futures contracts

Kalshi built a legal case that argues its yes/no bets on real-world events are futures contracts, and the relevant regulator—the Commodity Futures Trading Commission—agreed in 2020. Many states are now suing major prediction markets, arguing this legal case is faulty and obscures the true substance of the business: gambling.

Prediction markets help people bet on almost anything—which can be controversial

Critics point to incidents such as traders placing bets on the Venezuelan President Nicolás Maduro's capture and the two people in Israel who were charged on suspicion of using classified information to place bets about military actions.

Some experts equate prediction markets to the new crack cocaine of gambling addiction

An addiction psychiatrist at UCLA says betting apps are far more potent than traditional gambling, citing a 19-year-old patient who lost $180,000 and hadn't left campus in a year, cycling through sports bets, crypto, meme stocks, and prediction markets on his phone. This interview explores the extreme edge of the nascent industry.

The 2024 US presidential election was a breakthrough moment for prediction markets

Founded in 2018 by MIT graduates, Kalshi won a federal appeals court ruling in October 2024 that allowed it to offer election contracts in the US. When prediction markets predicted President Donald Trump's win (more accurately than most polls), prediction markets were thrust into the public eye.

Experts suggest the industry could be a $45B business

Sports betting used to primarily consist of who would win and the points spread, but the rise of online betting apps has fueled a substantial increase in parlay bets. "Existing markets are still growing at a rapid clip," said Noah Naparst, who evaluates sports-betting companies for Goldman Sachs. "So we’re not mature yet, but we’re not in the early wildcat days of the market anymore, either.”

Contract prices on prediction markets are generally interpreted as implied probabilities

For example, if a contract trading is at $0.65, that could be read as the market assigning a 65% probability to that event occurring. The most common format for prediction markets is winner-take-all: The contract settles at $1 if the event occurs, or $0 if it doesn't.

The idea that the median estimate of a group can be more accurate than individual expert estimates is called the 'wisdom of the crowd,' and dates back to the early 1900s.

Americans spent nearly $150B in sports-related bets in 2024

These bets ranged from who would win the World Series to what color clothes famous celebrities would wear to the Super Bowl. Experts believe the industry will continue to grow.

Use a prediction market profit or loss calculator

In order to calculate how much someone would make from a specific trade on a prediction market, this calculator asks for the purchase price of a given "yes" or "no" prediction, the number of contracts the trader plans to purchase, and more.

Kalshi is the first regulated prediction market in the US

Two migrant MIT students, Luana Lara Lopes and Tarek Mansour, shared an interest in hedging against uncertainty—from election outcomes to the Oscar awards. They fought hard for regulatory approval and their company now has a valuation in the billions. The platform has brought prediction markets into the mainstream.

Sports betting, explained

Since a 2018 Supreme Court decision overturned the Bradley Act, which spurred a state-by-state legalization of online gambling, sports betting has become a rapidly growing multibillion-dollar industry.

The CEOs of the two top prediction markets have a fierce rivalry

Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan are both billionaire CEOs of the top two prediction markets—but they don't exactly get along. For instance, Mansour reportedly does not say the word "Polymarket" out loud, referring to it as the "non-American, unregulated platform."

Donald Trump's Truth Social social media platform is launching a prediction market

Named "Truth Predict," the cryptocurrency-based prediction market will allow users of the Truth Social social media platform to place crypto bets on the outcome of certain events (think: sports games, the economy, and political races). Truth Social is primarily owned by President Donald Trump and his family.

Decoding sports-betting language

The world of sports gambling is filled with insider lingo: What's a "spread"? How about a "moneyline" or a "parlay"? This resource breaks down the jargon, helping you navigate the industry or, at least, giving you the keys to talk about it.

Sports media have also embraced sports betting

For decades, ESPN kept its distance between reporting on games and talking about gambling lines. Sports teams refused to have franchises in Las Vegas, fearing it would harm the sport. But since 2018, that has changed. ESPN’s personalities regularly pick games, and the company has also launched its own betting app.

Breaking down the jargon and strategy of horse betting

Placing bets on horse racing isn't the same as a football or basketball game. You can pick a winner (win), who will come in second (place), and even third (show). And all the bets placed on a race are pooled together and divided among the winners. This Top Ten Picks video teaches the mechanics behind each bet, and shares insider tips that can lead to more informed betting choices.

'The stock market' can be loosely defined as a set of exchanges and other places where shares of public companies are bought and sold.

Vitalik Buterin’s current thoughts on Ethereum

Vitalik Buterin isn’t just the founder of Ethereum—he’s also a blogger. In this blog post from late last year, Buterin discusses some of his favorite applications built on Ethereum: prediction markets like Polymarket, where users can bet crypto on the outcome of events like elections. Buterin argues that prediction markets also act as news sites for non-bettors, opening the floodgates for many different kinds of info-based apps on Ethereum. Read the post here.

Shorting is a high-risk and expensive investment strategy that hedge funds specialize in

Most investors buy stocks with the expectation that those stocks will be worth more tomorrow than they are today. Short selling, known as “shorting,” a stock is the opposite: The investor is betting the stock will drop in value.

Legal gambling on Super Bowl 60 is expected to reach $1.76B

Legal Super Bowl wagering has grown sharply over the past decade as US states legalized sports betting. In 2018, sports betting was only legal in Nevada and accounted for $158.5M.

Frictionless online gambling platforms accelerate compulsive behavior

As of late 2025, as much as 95% of bets are placed online, where "always on" betting and a variety of formats, such as prop bets and parlays, encourage users to keep participating. Experts warn that the normalization of gambling through advertisements also reduces the perceived danger of addictive gambling.

Even athletes aren't immune to the sports-betting craze

While gambling scandals occasionally blew up before 2018, the widespread legalization of sports betting provided athletes with more opportunities to bet on the games they were playing.

Prediction markets have their own lingo that's an amalgamation of Gen Z and Gen Alpha slang

For instance, if you've been out-maneuvered by another trader, you've been "mogged." A "rulescuck" is someone who is a stickler for betting market rules and may try to win on a technicality.

'Daily fantasy' is a high-stakes subset of fantasy sports

The form, pioneered by platforms like FanDuel and DraftKings, uses anonymous daily leagues and large payouts, looks more like typical betting than the season-long, community-minded setup of more traditional fantasy.

Some experts and investors think short selling—a strategy in which investors bet that a stock will drop in value—helps keep the market healthy.

A timeline of sports-betting scandals

This timeline examines memorable moments from three decades of sports-betting history. It breaks down key political moments, as well as some historical moments such as when the internet pushed underground bookmaking online. There are also multiple descriptions of betting scandals from 1989 on.

Insider trading is the practice of trading a company's securities based on material, nonpublic information.

Mental health experts caution against youth sports betting

People in their early 20s represent the fastest-growing group of sports gamblers. That fact concerns mental health professionals, who warn that early exposure to gaming primes children’s brains to seek digital rewards.

Play a game that reveals if investors with a crystal ball make better trades

The "crystal ball" game reveals how well you would do trading stocks and bonds if you could see the front page of the Wall Street Journal one day in advance.

Kalshi announced a partnership with CNN in 2025

The partnership included an integration of Kalshi's prediction markets data across CNN's network programming. For instance, certain TV segments on CNN could show a scrolling banner detailing the odds of event contracts on the exchange.

Active investors try to 'beat' the stock market's performance

There are two primary types of investment strategies that professional investors use: active investing and passive investing. While active investors try to "beat" the stock market's performance, passive investors have a bit more faith in the system.

How math whizzes exploit sportsbooks

Chris Dirkus is a professional sports bettor who approaches the hobby as a math problem, not from a fan's perspective. He focuses on mispriced odds in popular games where many fans are betting for high liquidity. He's one of a rare segment of sports bettors exploiting slow models and human mistakes.

Spot markets are where commodities intended for relatively immediate delivery are traded

Spot markets are where physical securities are exchanged for cash. Also known as cash markets or physical markets, the trades are relatively immediate—both parties agree to an immediate transfer. Currencies and securities can also be traded on spot markets.

Prediction market Polymarket's CEO dropped out of New York University

Polymarket CEO Shayne Coplan started building Polymarket when he was 21. Polymarket has been backed by billionaire investors such as Peter Thiel and Vitalik Buterin.

Retail investing by the numbers

When average Americans began pouring into the stock market, Wall Street wasn’t sure if its new guests were there to stay. But at the end of 2023, Public confidently declared that retail investors “weren’t going anywhere” after 30 million new individuals began buying and selling stock. Download the report to learn more here.

Sports leagues have attempted to prevent athletes from betting

As pro and collegiate sports embrace betting (and the revenue that comes with it), each league works diligently to ensure the integrity of the games by hiring private firms to analyze irregular bets. These companies have flagged bets that led to the firing of Alabama’s baseball coach, the suspension of multiple athletes at Iowa and Iowa State, and, most recently, a lifetime ban on former Toronto Raptors forward Jontay Porter by the NBA in April 2024.

Among most mainstream sports broadcasts, sports betting ads appear most often in women's basketball and hockey

A random selection of 50 different sports broadcasts tracked one sports betting reference every four minutes. In one of the randomly selected hockey games, the longest stretch of no gambling reference lasted about five minutes towards the end of the game.

Fantasy sports have turned fans into 'second screen' consumers

The rise of smartphones made fantasy sports more accessible and contributed to a phenomenon called “second screen consumption,” where sports fans are not only watching a live broadcast but are simultaneously watching the statistics from that game play out in their fantasy matchup.

'Moneyball' author Michael Lewis believes sports betting is a problem for young men

The noted journalist and author of "Moneyball," "The Big Short," and "The Blind Side" has now fixed his discerning eye on the sports-betting industry. In this interview, he explains why he sees sports betting as a problem for American society, especially boys and young men, and why he believes the government needs to regulate the nascent industry more seriously.

Fantasy sports can have adverse health effects

Experts warn that fantasy sports, including fantasy football, can encourage obsessive use because they offer hits of dopamine. Daily fantasy games, which function more like gambling, are especially problematic.

While day trading has risen in popularity in recent years, the SEC warns it is a speculative strategy that can cause big losses

A day trader is anyone who buys and sells a stock within the same trading day. They quickly move in and out of the market to try and profit. Some day traders are professionals, while others are retail investors.

About 17% of US adults said they had invested, traded, or used cryptocurrency in 2023.

How much does sports betting generate?

According to 2025 data, sports betting generated $2.7B in state tax revenue. That number has increased every year since the government began collecting data in 2021.

Commodity traders are most commonly 'hedgers' or 'speculators'

While hedgers often produce and consume physical commodities (like corn, copper, or natural gas) and use the markets to manage the price risk for those commodities, speculators provide liquidity by betting on commodity price changes.

The alternative investments industry is expected to grow significantly in the coming years

More specifically, as of 2024, the alternative investments industry was expected to grow to more than $24T in assets in 2028—up from roughly $15T in 2022.