WANNA BET? WHY INVESTORS ARE GAMBLING ON KALSHI AND POLYMARKET

THE 2024 ELECTIONS SHOWED THE POTENTIAL AND POPULARITY OF “PREDICTION MARKETS.” BUT THE STARTUPS AND THEIR HEADSTRONG YOUNG FOUNDERS STILL FACE LONG ODDS.

- BY JEFF JOHN ROBERTS

OVER LABOR DAY WEEKEND, social media lit up with observations that President Trump had not been seen in public for several days.

Soon, rumors swirled about Trump's health—and ghoulish hashtags even claimed he had died.

Yes, it was just another weekend in the online rumor mill, but this round of speculation came with a novel twist: a flurry of bets about the president's health on so-called prediction market sites. On Kalshi, the odds of Vice President JD Vance taking office by the end of the year shot up to 15%. For Kalshi customers, a wager of $15 would mean a payout of $100 if Vance took office.

Trump's alleged disappearance, of course, proved a false alarm. By Tuesday, the internet had moved on to other diversions—but not before pundits blasted Kalshi and its prediction markets rival Polymarket for running "assassination markets," where the public could (indirectly) wager on the death of a public figure.

Those accusations may have been overblown—not least because one of Trump's sons invests in and advises both Kalshi and Polymarket. But the episode showed how prediction markets, long the province of a niche clique of academics, have suddenly become a mainstay of politics and the news cycle.

They are also on the cusp of becoming big business.

Kalshi and Polymarket have been around for seven and five years respectively, but their big breakout came during last year's U.S. presidential election campaign. Over the course of several months, millions of people convened on the platforms to wager more than $3 billion on the outcome, resulting in a forecast that proved far more accurate than the most highly regarded polls. For the startups' founders, this proved their thesis: that the platforms' blend of crowdsourced wisdom and financial self-interest offers an unprecedented window into future events.