Popularised by the privately held companies Polymarket and Kalshi in 2020, prediction markets are experiencing phenomenal growth. So much so that some of the long-established giants of the gambling industry are entering the market.
Well, you know, the whole world, unfortunately, has become somewhat of a casino.” With a touch of fatalism, US President Donald Trump reacted in April 2026 to the arrest of Gannon Ken Van Dyke, accused of insider trading. This career US military officer allegedly made around $400,000 by betting on US intervention in Venezuela on the Polymarket platform. The catch? According to the US Department of Justice, he had himself participated in the operation that led to the capture of Nicolás Maduro, the former Venezuelan president.
Pioneered by academic prediction markets launched in the US in the late 1980s, and later popularised in the world of online betting by the Betfair Exchange – founded in 2000 and now part of Flutter – prediction markets have seen phenomenal growth across the Atlantic since 2020 due to the Polymarket and Kalshi platforms. Unlike sports betting, which allows speculation on the outcome of a match or tournament, they offer the chance to bet on just about anything: the date of a peace deal with Iran, the result of a presidential election, or even the price of oil in a month’s time.
Another notable difference is that these platforms operate more like a stock exchange than a sports betting market: each future scenario becomes a tradable contract whose price fluctuates according to supply and demand. The more likely an event is deemed to be, the higher the contract price rises, reflecting an implied probability. Let’s imagine we are speculating today on the possibility of Donald Trump securing a third term. Between now and the result of the next US elections, it will be possible to sell our shares, their value fluctuating according to supply and demand in the interim. As such, prediction markets operating legally in the United States, such as Kalshi, fall under the remit of the Commodity Futures Trading Commission (CFTC), the federal agency responsible for regulating derivatives markets.
Although relatively unknown before the 2024 US presidential election, Polymarket and Kalshi saw their weekly trading volumes sky-rocket in 2025 and 2026, rising from $462.8 million in the week of 26 May 2025 to $5.6 billion in the week of 18 May 2026, according to figures from the Dune analytics platform.
This success has whetted the appetite of the global gambling giants, which have seen these two young, unlisted platforms make them look outdated. In December 2025, for example, the American companies DraftKings and FanDuel each launched their own prediction apps. But the appeal of prediction markets extends far beyond the gambling industry alone, now attracting players from the financial sector. The financial services company Robinhood launched its own prediction service in March 2025. As for Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, it continues to strengthen its ties with Polymarket: following an initial investment of $1 billion in October 2025, it made a further direct investment of $600 million in the platform in March 2026. Reuters then reported in April that Polymarket was discussing a new round of fundraising that would value the company at around $15 billion.
The usefulness of prediction markets goes far beyond entertainment. Some companies, such as Hewlett-Packard and Google, use them to improve their forecasts. “More accurate than polls, as actual money is on the line,” summarised Elon Musk on 7 October 2024 on X. For financial institutions, the data from these bets could become a new indicator of economic and political trends, transforming the collective perception of the future into a genuine source of information. A phenomenon dubbed ‘the wisdom of the crowd’, popularised by James Surowiecki’s eponymous book, published in 2004.
More accurate than polls, as actual money is on the line
The problem is that, as illustrated by the case of the US military officer who bet on military intervention in Venezuela, prediction markets are highly susceptible to insider trading. A study by Siyang Liu of the University of British Columbia, published in April 2026 and entitled Wisdom of the Crowd or Wisdom of the Insider? Insider Trading on Prediction Markets, sounds the alarm: a tiny fraction of players capture a disproportionate share of the winnings relative to their participation. Across all types of bets, 0.08% of traders account for 7.1% of total profits.
As a result, prediction markets are banned in Switzerland and in most European, Asian and Middle Eastern countries. “For the moment, European gambling operators do not seem to be campaigning for the legalisation of prediction markets,” notes Johanna Jourdain, equity analyst at Oddo BHF. “It is not yet an issue in Europe, especially as the United States is beginning to seek to regulate them.” Several bills targeting prediction markets have been introduced in the US Congress in early 2026.
Although they are banned in Switzerland, it is nevertheless very easy to access them using a VPN. “From an addiction perspective, prediction markets are comparable to sports betting,” explains Markus Meury, spokes-person for Addiction Switzerland. “There is also an element of the illusion of control: people think they can win thanks to superior knowledge compared to other players. In reality, however, chance is always the dominant factor.”
