When our bets bear the weight of the world, we lose sight of the world itself. Online trading platforms create environments that assign monetary value to everyday events and any action, impulse or worldly event can be put under betting odds. In order to engage critically with the world, we must treat our actions as having real consequences, not as prediction data on a screen.
At their core, prediction markets are online platforms that allow individuals to place money on the likelihood of something happening. Users are awarded or lose money based on the outcome of the event, with trading prices going up and down depending on market activity.
Essentially, users also buy “event contracts,” a type of financial trading tool, and sell them as odds change. You can put money in and take it out or put more in as odds change in the hope of earning more. That allows people to engage in hypotheticals on sports games, elections and more.
However, there is one problem: Anyone can bet on anything. That problem is only furthered by a lack of cohesion between state and federal regulation. According to the American Gaming Association, prediction market betting has little state oversight at all, while 80% of users believe state regulators can help them with any financial problems on the markets. Oftentimes, they simply cannot.
This creates an environment where betting becomes a financial tool or an investment. What they are engaging with instead is a largely unregulated casino that has no physical entry nor any digital escape.
Polymarket and Kalshi are the leaders of online prediction markets. The Pew Research Center found users typically broke even on their trades while spending $600 on average over a six-week period.
In that digital environment, no one really wins. Sure, there are some winners and even larger losers, but trades are placed with little regard for the events they represent.
For example, take political election trading in this year’s midterms on Kalshi. The race between Sherrod Brown, a former United States senator, and Sen. Jon Husted favors Brown with 53% of users betting he will win the election.
Yet, we do not know the results of the election. Months before the election happens, individuals throughout the country are actively profiting off of unknown events. When it comes to elections, which are a fundamental aspect of democracy, there is a financial motivator to actions that should be guided by civic duty.
Since many individuals who represent some of the voting constituency or supporters of a campaign, researchers argue prediction markets play a larger role in predicting the outcomes of an election. Some have gone so far as to suggest prediction markets will replace political polling to measure public opinion about elected officials.
That presents a serious problem, however. Think about a scenario in which a candidate is running in an election and users on Polymarket or Kalshi rate that candidate as highly favored to win. Users continue to place event contracts hoping to cash out on a specific candidate’s victory on election night.
Some voters may see those bets not as a prediction but as a justification, as proof their vote will not count in the long run. Remember, we do not know the results of an election until election day. Yet, an inflated prediction market makes our political choices look more certain than they actually are. In this case, disengaged voting could become an unintentional byproduct of prediction markets.
And many people engage with political prediction markets. For example, political predictions make up 32% of the total volume on Polymarket. Although countless individuals interact with political prediction markets, we lose sight of what is actually important. In this case, individuals devote time to political prediction games when they could spend more time learning about the candidates who they elect to public office.
Trades are placed with more interest on their financial outcome than any real interest in the actual consequences associated with it. Placing a financial tag on everything causes many items and actions to lose their cultural and societal value.
To this end, we trade cents for senselessness. The only real winners are the companies who dangle virtual fantasies in front of us with no way out and no promise for interpersonal preservation.
The Post editorials are independent of the publication’s news coverage. Have thoughts? The Post can be reached via editor@thepostathens.com.
