GoKawiilDepending on whom you ask, prediction markets are either:
A dangerous, unregulated form of gambling that allows for degenerate betting on real events, unfettered by the economic and legal rules that keep stock markets and sports betting in check, creating an opportunity for corruption and insider trading on a scale we have never seen before.
Perfectly legal crystal balls that could replace polling and happen to come with a side of money.
Whatever they are, they’re constantly changing, and they’re increasingly becoming a part of the news business. In the last few months, Kalshi, a New York-based prediction market, has struck deals with CNBC, CNN, Fox News, and the AP, among others. Polymarket, another prediction market, announced a partnership with Substack in February and one with Dow Jones in January. Both Kalshi and Polymarket are also been positioning themselves as news providers in their own right — Polymarket, for example, borrows the language of news organizations (“BREAKING” and “JUST IN“) in its social media presence, which is dominated by tweets about the news followed by a link for users to bet on that news (and is also filled with misinformation).
Keeping up with prediction markets is practically a full-time job, and for a few journalists they’ve become an opportunity to stake out a new beat at the intersection of politics, culture, finance, technology, sports, and even possibly true crime.
“I see a lot of connections to things that I’ve covered in the past,” said Kate Knibbs, a senior writer at Wired who recently established herself as that publication’s resident prediction markets reporter. “I see it as an extension of the crypto boom. It’s a future of money story, an industry story, and very much something that is emerging as a natural extension of ongoing trends in American culture.”
Knibbs’ beat started percolating in her mind when she was on maternity leave. On the day she got back, she wrote a memo to her editors about covering prediction markets, which they were thrilled to receive — they had been talking about asking Knibbs to cover them anyway, because they knew she was interested in them.
For Knibbs, the beat is interesting not only because of potential future effects of prediction markets but also because of their ties to the past. “Someone was asking me, ‘Aren’t you worried that this is going to be like NFTs, and it’s just going to fizzle out?’ And I went, ‘Well, it literally is NFTs. It’s the same story.’ And you don’t get NFTs without Occupy Wall Street in my book. It’s all mixed together. I think we have this huge appetite for products like prediction markets because of the overall precarity of ordinary people’s finances.”
Dustin Gouker, an independent journalist who writes the prediction markets-focused newsletter Event Horizon, got interested in prediction markets because of his history covering fantasy sports and gambling. Until around 2018, he said, sports gambling involved going in person to a bookie — usually in Nevada — and placing a bet, getting a physical ticket to confirm the bet, waiting for the game to end, and then returning to the bookie to cash out any wins. The rise of sports gambling apps like FanDuel and DraftKings changed that dynamic, making gambling accessible to anyone with a smartphone. Prediction markets took that one step further, allowing people to bet on granular details of all kinds of events beyond the world of sports. “The velocity is supercharged,” Gouker told me from his office in Oregon. “You can lose a lot of money really quickly.”
Gouker writes two daily newsletters — Event Horizon and The Closing Line, about sports betting — and uses a combination of reporting methods to find stories. A friend helped him build a custom dashboard that plugs into Kalshi’s API to track trades, allowing him to quickly spot any notable movement, and he reactivated his X account, which he was on the verge of deleting, because he found much of the social chatter about prediction markets was happening on that platform.
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