A former longtime CNN journalist, who requested to remain anonymous, objected to the deal on different grounds, saying that it seemed “gimmicky” for the network to be promoting betting odds. “Do they really believe it’s adding value to the coverage?”
The value of the data depends on the liquidity of a particular market; generally, the more money wagered, the more predictive the odds. There is no magic threshold for when a market should be taken seriously, but many of the most-cited election markets attract tens of millions of dollars in trading, at least. When Enten lauded the benefits of analyzing betting odds, on air the other day, he failed to mention that only several hundred thousand dollars had been bet on that particular market. Kalshi’s odds provided good fodder for television, but, statistically speaking, they didn’t say much.
How many news organizations, desperate for cash and for clicks, will move in a similar direction? Dan Pozner was the director of gambling content and partnerships at NBC Sports in 2020 when the company struck its first partnership with a sportsbook, PointsBet (since acquired by Fanatics, which just launched a prediction market in two dozen states). Some traditionalists at NBC were reluctant to promote gambling, Pozner recalled, but the prevailing mentality was, “They need to do what everyone else is doing to keep up, or they’re going to miss out.” Pozner doesn’t think many news organizations will get hung up on moral reservations this time, either. I heard something similar from Dustin Gouker, a reporter who also spent years facilitating affiliate marketing deals with media companies, and who now publishes a newsletter about prediction markets, Event Horizon. He agrees that CNN, CNBC, and Yahoo Finance will likely be trendsetters: “Bloomberg, the Wall Street Journal, the New York Times, Fox News, and on and on—why wouldn’t all of them do something like this?”
It’s easy to see the synergy between news and gambling on the news. Kalshi said it will create certain markets at CNBC’s request, though many news stories already have a corresponding betting market. After the Times published a front-page story last month about mounting evidence of the President showing his age, the odds on Kalshi that he’d be out of office by the end of next year increased to twenty-nine per cent. Kalshi is also accepting bets on extreme weather, like markets for whether an 8.0-magnitude earthquake will strike California before year’s end, or whether Mt. Etna will erupt in the same time frame. (There’s a one-per-cent and fifty-seven-per-cent chance, respectively.)
Of course, there’s something ghoulish about profiting from natural disasters—or wars. Polymarket takes bets on whether Israel will strike Gaza on a given day. There can also be strange feedback loops, Andrew Hall, a political scientist at Stanford, explained. (Hall also advises the venture-capital firm Andreessen Horowitz, an investor in Kalshi.) With political markets especially, “the news affects the prices, and then the prices are part of the news,” Hall told me. Coverage of Hegseth having the greatest odds of being the first Cabinet secretary ousted, for example, could boost those odds further, which could generate more coverage, which could eventually drive the President to fire him.
Entanglements with prediction markets might create other problems for journalists. Considering how significantly news coverage shapes betting odds, there’s ample opportunity for insider trading. Accentuating that conflict, news organizations are often designated as the source of truth for resolving a market. For example, Kalshi takes bets on whether certain people, such as the rapper Drake or the Pope, will visit the White House this year. The outcomes of those bets are determined by reporting in various outlets, including CNN. Kalshi’s rules prohibit any employee of a news outlet, anyone with “material non-public information,” or anyone with “the ability to influence the outcome of the contract” from trading. But, as Gouker, the Event Horizon writer, asked, “Are they actually stopping them?” Earlier this year, a Republican candidate for governor in California, Kyle Langford, said he bet a hundred dollars on Kalshi that he would win the election. Of course, he was prohibited from doing so, but the bet apparently went through. Kalshi said it was investigating.