Prediction markets in the news are a dangerous gamble
Today on Decoder, let’s talk about prediction markets, which continue to insert themselves into the news cycle and the news itself in increasingly weird, unsettling, and potentially illegal ways.
My guest today is Liz Lopatto, senior reporter at The Verge, who owns what we cheerfully call the chaos beat. Liz has been writing a lot about prediction markets lately and especially why they all seem so intent on being perceived as sources of news — a position that directly incentivizes insider trading. That, in turn, creates a long list of very predictable problems.
This past weekend, after the United States and Israel went to war with Iran, leading prediction market platforms Kalshi and Polymarket erupted with activity. That included extremely contentious markets around the death of Iran’s supreme leader, and some that appeared to be rife with insider trading from people with advanced knowledge of US military actions.
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In 2026, you can, from the comfort of your couch, wager on when the US will bomb a foreign country. And for Kalshi and Polymarket, that’s quite literally the business model: betting on anything. (After we recorded this episode, Polymarket even briefly featured a wager on whether nuclear war would break out before 2027; the company removed it.)
Sports are where these firms make the bulk of their money, which is why both Kalshi and Polymarket are in the crosshairs of so many state gambling authorities. But this industry also thinks of itself as something far grander. Prediction market players want to be the news, and they’ve even devised new, frankly unconvincing frameworks for why they should be considered legitimate sources of information — instead of just anything-goes casinos. Yet more and more, news organizations are taking the bait.
Kalshi’s tagline is “trade on what you know.” Polymarket CE
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