This January, an anonymous user on Polymarket won over $400,000 after betting Venezuelan president Nicolas Maduro would shortly be out of office, placing the trade just hours before his capture.
Until recently, a bet like this would have been heavily regulated and far from mainstream. But although gambling once carried a clear stigma — something to be avoided, discouraged and restricted — its boundaries began to expand far beyond traditional sports as betting has become more digitally accessible, heavily advertised and socially normalized.
After decades of resistance, the industry has scaled quickly to the point where wagers are now legally being placed on elections, climate change and many other real-world events.
Today, a new kind of culture has emerged — one that wants to bet on everything.
In 2025, tens of billions of dollars flowed through Kalshi and Polymarket, the two leading prediction markets in a rapidly expanding betting industry.
On the surface, these markets serve as tools which use the “wisdom of the crowd” to forecast upcoming events. Prices act as signals, rising and falling as users buy and sell contracts tied to specific outcomes.
Individual users can buy “yes” or “no” contracts priced between 0 and 100 cents, reflecting the implied probability of a particular scenario. Those contracts may be sold as the market price trends up or down, or held until the event occurs, when correct positions pay out.
Economically, prediction markets differ from traditional gambling structures.
“Gambling, you’re playing against a house, and it’s a rigged game that’s always rigged in favor of the house, whereas prediction markets are peer to peer,” History & Social Sciences Department Chair David Fisher said. “You’re betting against other people, and the more people that participate, the more certain it is that the outcome is what a percentage is indicating is going to happen.”
After the federal government lifted a longtime ban on sports gambling in 2018, the betting culture exploded. But with sports gambling still illegal in Texas, prediction markets stepped in as a gambling substitute. In fact, more than 90 percent of the trading volume on Kalshi was placed on sports according to the New York Times.
“My issue has to do more with what we do with our scarce amount of leisure time…I think objectively, the answer should not be to gamble, and up to a point, that’s where betting the prediction markets are a little bit as well,” Fisher said.
Among students, prediction markets blur that line between analytical forecasting and gambling. While some see the platforms as tools that foster economic and political understanding, others approach them primarily as a way to wager on outcomes with fewer legal and regulatory barriers than traditional gambling.
One anonymous student, who has traded on Kalshi multiple times, argues that Kalshi should not be considered as betting or gambling so long as the individual performs educated trades without blindly engaging. He described his trading as stemming from research and probability rather than impulse, allowing his macroeconomic and political expertise to translate into profit.
“One of the recent futures I did was on the (Federal Reserve System’s) decision in January,” he said. “In December, it said there was an 80 percent chance they’d maintain rates. That trade went from an 80 percent likelihood to a 95 percent likelihood, and I chose to cash out with a 16 percent return.”
Other students engage with prediction markets without putting money on the line. Freshman Tanner Wolfson said his interest is more observational than financial, shaped by curiosity about how collective expectations are priced.
Despite finding the concept appealing, Wolfson remains cautious, citing age and maturity as decisive factors.
“As of now, I just look at it to stay up to date, and it’s a good way to follow different topics because there are sources cited on it,” Wolfson said.
Other concerns abound regarding the ethical implications of betting on elections and creating incentives for civic events. And while markets can often reach efficient probabilities, in some cases even better than experts, there are specific events in which creating monetary incentives can stray from the integrity of an event such as the presidential election.
Insider trading also remains a prevalent issue — particularly for trades concerning political and economic activity — with it being extremely difficult to regulate users suspected of insider trader.
For example, the bettor who made more than $400,000 betting on Maduro has been scrutinized by some for the impeccable timing of his trade, but it is virtually impossible to prove whether he had inside information.
“I think we run a very large danger in fetishizing market relationships,” Fisher said. “Markets are good, but they’re not for all things that are human interactions.”
Ultimately, while prediction markets can offer real analytical value, their rapid expansion raises questions about the limits of where markets should, and should not, apply.
“It’s an interesting tool, and if it were regulated, if we had a government that was very forthright in its ability to set boundaries around it so it could be just used as a tool, then I would be 100 percent behind it,” Fisher said. “But I fear that, as with a lot of things, we’re commercializing it. We’re exploiting it for advantages that other people will use to their own benefit and not the society’s benefit.”
