The Rise of Betting: A New Era
The world of betting has transformed dramatically, with platforms like Polymarket, Kalshi, and FanDuel leading the charge. These companies are capitalizing on a growing trend where everything seems to be a gamble.
Investment or Gamble?
When I first heard about Intercontinental Exchange (ICE) investing $2 billion in Polymarket, I was puzzled. Why would a major financial entity be interested in a prediction market? It turns out, the appetite for risk and speculation is growing among Americans, and businesses are eager to tap into this trend.
“If you give people the opportunity to bet, they will,” says Jordan Bender, an analyst at Citizens JMP.
The Legal Landscape
The Supreme Court’s 2018 decision to overturn a federal ban on sports betting has opened the floodgates. Prediction markets, which allow bets on everything from elections to natural disasters, are gaining traction by exploiting regulatory loopholes.
“It feels like gambling,” says Steve Ruddock, a gambling-industry expert.
Blurred Lines: Investing vs. Gambling
The distinction between investing and gambling is becoming increasingly unclear. From cryptocurrencies to stock markets, the lines are blurred. Companies are seizing the opportunity to profit from this trend.
Chris Grove, an investor in the sports-gambling industry, once told me that once people start betting on one thing, they’ll bet on many. This prediction has proven true as platforms like Kalshi and Polymarket gain popularity.
Expanding Horizons
Kalshi and Polymarket are making significant strides, with Kalshi entering sports markets in states where traditional betting is illegal. Robinhood is also venturing into betting markets, partnering with Kalshi to expand its offerings.
Traditional sportsbooks are not left behind. FanDuel is collaborating with CME Group to create a platform for betting on economic indicators, while DraftKings has acquired Railbird, a predictions platform.
Regulatory Challenges
The regulatory environment is complex. Prediction markets argue they offer contracts on future events, akin to futures contracts for commodities, and should be federally regulated. However, states like Massachusetts and Nevada have challenged this, claiming these markets offer illegal sports gambling.
“The industry views this as gambling,” says Bender from Citizens JMP.
Speculation in Everyday Life
Speculation is now a common part of the economy. A survey by the American Gaming Association revealed that 55% of US adults gambled in 2024, with nearly $150 billion wagered on sports alone. This doesn’t account for activities resembling gambling, such as exotic stock options and prediction markets.
“Speculation is just a few taps away,” says Parker Bach, a Ph.D. student studying digital culture.
The Future of Betting
Despite legal and consumer protection concerns, the demand for speculation is undeniable. Prediction markets claim to harness the “wisdom of the crowd” and offer value in predicting outcomes. However, the accuracy of these markets is debatable.
“If we’re honest, it’s all gambling,” Ruddock concludes.
Emily Stewart is a senior correspondent at Business Insider, focusing on business and economic topics.
