Support for NPR comes from TaskRabbit, your trusted partner for home projects. TaskRabbit connects you with skilled local taskers for furniture assembly, mounting, and repairs. You can browse profiles and book help today at taskrabbit.com or on the TaskRabbit app. Sports betting may be taking over professional sports, but prediction markets are taking over the entire world. According to the Stanford School of Business, prediction markets are markets where participants trade contracts whose payoffs are tied to a future event, thereby yielding prices that can be interpreted as market aggregated forecasts. But in layman's terms, all of the states say, hey, this is just gambling. That's NPR's Bobby Allen. He's been following the explosive growth of prediction markets. The bets range from who's going to perform at the Super Bowl to what word will Mr. Beast say in his next video. The two main players in this space, Holly Market and Kalshee, have sent state lawmakers scrambling to regulate the rapidly growing industry. Because while some participants may be betting on what word Trump will say at the State of the Union, others have more sinister aims. The really, really wild bets on famine, on deaths, on the assassination of world leaders, that's all happening on Holly Market, essentially on an underground sort of out of the reach of of the US exchange. The other exchanges that are in the US like Kalshee and there's a bunch of others, those are a little bit more regulated. Federal law says that betting on death and war is illegal, but both Polymarket and Kalshee have come under fire for platforming the possibility. It is kind of like a tale of two prediction markets. There's everything happening on Polymarket, which is just totally whack-a-doo crazy. And then there's everything happening on Kalshee, which is more regulated, but not that much more. When some people bet on death and destruction, where does that leave the rest of us? As long as these apps exist in the way they do now with virtually no guardrails, it invites manipulation, it invites insider traders, it invites these markets to be rigged, which is why they haven't existed for many, many, many, many years. Because until now, regulators have said, betting on all of these kinds of things is going to be corrupt. Let's get into it. Hello, hello. I'm Brittany Loos and you're listening to It's Been a Minute from NPR, a show about what's going on in culture and why it doesn't happen by accident. And a reminder, if you love It's Been a Minute, which from the sweet comments you all have been leaving, it sounds like maybe you do. Be sure to follow or subscribe to the show on your favorite podcast app. That way you get new episodes the moment they drop. Okay, in our 2026 predictions episode back in January, you said that this year would be shaped by prediction markets on apps like Callshee and Polymarket. You said the betting on these apps could even potentially be used to sway an election. Well, here we are, only a quarter of the way through 2026 and one prediction market trader has already made over half a million dollars off the death of Iran's supreme leader. This was a user named Maga My Man on Polymarket. But Callshee users who made the same bet didn't experience the same result. What happened there? Yes, it was really interesting. So on Callshee, war and assassination and terrorism, bets are banned. And that's also the case with US law. US law bans and it is illegal to have futures markets, which is what these are on those kinds of things. But on Callshee, there was a market about whether the supreme leader of Iran would be ousted. That was the question. And so that was legal. And it didn't consider whether the killing of the supreme leader would lead to the ousting. So then when the supreme leader died, people were looking to cash out and Callshee said, oh, wait a minute, you know what, there actually is a ban on death markets. And this market about him being ousted kind of became a death market because he died. And that caused tons of hubbub. Callshee ended up sort of splitting the difference and not paying out as much as some people had hoped they would make on the supreme leader being ousted. But this is just one example where these prediction markets can try to set up a market that anticipates one outcome, something unpredictable happens like the death of the leader of a foreign country. And all of a sudden it becomes a death market, even though they say they ban death markets. I mean, even just thinking about navigating the very definitional minor details or the semantics around this, like is an assassination or a death the same as an ousting? Or if a death leads to an ousting, it just seems like such a grim way of splitting hairs. It really is. It really is. And people who look at these prediction markets, the first question was yours. How is this legal? The second question usually is like, how is this ethical? Do we really want to be living in a society where death and suffering and depravity are things that people can make money on? And people are often talking about the casinoification of everything. That's really what these prediction markets represent. They're turning any little thing you could possibly imagine into a wager where you and I can lose money. But it really gets grim. It really gets perverse when we start entering the zone of death and destruction. I mean, that's why they technically are illegal in the US. Because if you open a prediction market on whether X, Y, or Z politician will be assassinated, that's basically putting a bounty on that person's head. Right? You're basically saying, why don't you go do it? Would be assassin because I'm here hoping to make money on that. It's really, really dark and really dystopian. I mean, really dystopian. I know that you described Cal-Shi and polymarket as like two of the biggest apps in this space. They obviously have different regulatory approaches. But still, I mean, at the end of the day, even if polymarket kind of falls outside of the US jurisdiction in this way, when I think about people being able to obtain funds that they may have won through betting on death quite literally through polymarket, being able to obtain those funds in the United States, something about that still feels very weird. It just seems like the kind of thing that some type of regulatory body would want to interrupt or at least investigate. Like what's been the response on that front? Or has there even been a meaningful response? Well, the Biden administration rated the Soho apartment of Shane Copeland, who is the 20 something billionaire CEO of polymarket. There was a ton of scrutiny and pressure on polymarket in the last administration. But in Trump's second term, they have rolled out the red carpet. I mean, Donald Trump Jr. His VC fund, his venture capital fund has given money to polymarket. He's a strategic advisor to polymarket. And they are really taking a light touch, hands-off approach. In fact, they're even paving the way for a US version of polymarket to launch. They gave blessing to that recently. And you might be asking, well, what is that about? Why are they doing this? Don't they have concerns? Well, everyone around the Trump administration, Republicans and Democrats in Congress, governors, many, many, many people have concerns about this. But the White House's approach is let's take a hands-off approach. Okay. Yeah. I was going to ask about like, you know, the other branches of government, as I recall from middle school, we are supposed to be operating a system of checks and balances. Like, is there any recourse like through Congress? I mean, like you mentioned, there are members of Congress that are very concerned about this. And I imagine a lot of their constituents, if they have awareness of this, they're really concerned as well. Like, is there any way for them to step in there? So the main fight here, Britney, is over whether states or the federal government ought to be regulating this crazy stuff, right? And all of the states say, hey, this is just gambling. And states and tribes regulate gambling. It's a huge source of tax revenue. Let that be a state's issue. The federal government has no business being here. I mean, DraftKings and FanDuel and all of these online sports books, these sports betting apps are all regulated by the state. Who comes crashing into that, these prediction markets? And they say the federal government is going to regulate us. So that is being litigated right now. There's literally dozens of lawsuits around the country trying to figure this out. Eventually, it might go to the Supreme Court. Okay, so that kind of explains where a lot of different, I guess, players in our government arena are on all of this. But like, what does the public think about this approach to using the prediction market? Obviously, there are people that are using these apps. But even if, let's say, gambling is the general umbrella term that a lot of people might want to put this under if they're thinking about, say, states' rights or something like that, I don't know if the everyday person sees some of the sorts of bets that we're talking about on polymarket as the same as hitting like three-way parlay on the Super Bowl or something like that. I mean, the betting public, which is a lot of people, either love or hate these apps because they are lowering all the barriers to betting. In most states, you have to be 21 to get on a sports betting app. On these apps, it's 18. Most of the sports betting apps, you can bet on how many tosses will this quarterback throw, how many hoops will land in this basketball game, what will the score be. On these prediction markets, let me look right now and just scroll for a second here. Okay. What will Jeff Prope say during Survivor Episode 6? Will he say trust, immunity idol, various other words? What will Mom Donnie say during his childcare announcement? What will Jack Black say during his SNL opening monologue? My point is, everything is now potentially a thing you could gamble on. There was some interesting research that I was looking at today that sort of analyzed, had a sample of the people who are betting on prediction markets and found the ones who are really bad are losing three times as much as people on traditional sports books. The winners are making double what the typical person makes on a sports book, and the median, people are far less off. So the summary there is you can make a lot more money, lose a lot more money. The median person is losing money. So if you're a better, it depends on where you fall on that spectrum. Coming up, we have a lot of the year left and I think midway through, by the end of the year, we're going to be looking back and we might say those early controversies in 2026 were kind of quaint. More when we get back. This message comes from Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? 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Okay, so I actually feel pretty confident that I wouldn't be necessarily betting on war, famine, death, but I don't know, as dark as some of this stuff is, I can't help but think about the fact that our elected officials in Congress are allowed to trade stocks with the rest of us, let alone with whatever they may be doing on the market or the cashier. Their trades, at least on the stock market, must be reported and made public. They're not allowed to trade based on information. They obtained confidentially. There are regulations for all of this, but some of the public is still skeptical. I think naturally, actually, as to how closely these regulations can really be enforced. I imagine some people, and that's even before we get to how much some of the weapons manufacturers or tech companies that profit during these times, even outside of the prediction market. Right? And then look at these apps that anybody can partake in, like Cal-Chi and Polymarket, and think, why not me? As morally and ethically confounding as a lot of us, I think, find this to be, what do we do with that? What do we do with that tension? Yeah, I mean, in the best of times from a regulatory perspective, there's not really the resources to police these markets. Meanwhile, there are lawmakers in Washington proposing all sorts of bills to sort of reign in these prediction markets, whether it's banning insider training, whether it's making sure that politicians can't make money. There's a whole range of proposals. We'll have to see what actually happens there, but there is a bipartisan consensus. Cal-Chi and Polymarket have open lobbying shops in Washington. Oh, and they got money for that. They got a lot of money for that. I mean, there's billions of dollars that are traded on both of these apps every single week, and they get like one 2% of every single trade. So that money adds up fast. So they're using some of that money to find to hire lobbyists in DC to basically say, hey, guys, we got this, let us police ourselves, why don't you stay away? If there's any weird anomalous strange insider trading happening, we'll whack it. Don't worry about it. But when you talk to experts who study this industry, they say it's just not enough. I mean, you're never as long as these apps exist in the way they do now with virtually no guardrails. It invites manipulation. It invites insider traders. It invites these markets to be rigged, which is why they haven't existed for many, many, many, many years. Because until now, regulators have said betting on all of these kinds of things is going to be corrupt. It's going to provide an incentive for people with information that is not public to make money off that. It's going to potentially warp reality in really distressing ways. It has no place in society until now. Is there an example of this kind of insider trading that comes to mind? They figured out that a Mr. Beast video editor was editing videos of Mr. Beast, knew what words he would say, and then was placing bets on Kalshi and making many thousands of dollars. He did that enough. He had such an impressive winning streak that the surveillance systems in Kalshi were like, hmm, these seem a little too well timed. He got pushed out. He got fined. He got in trouble. They really made an example of this video editor. But there haven't really been many other public examples of these apps cracking down on insider traders. They just haven't been. Interesting. What we've been talking about makes me think about something you mentioned in one of your articles on this topic. You mentioned that the CEOs of Kalshi and Polymarket have a shared belief that prediction markets operate using a quote unquote wisdom of the crowd ethos. Can you explain what that is and how that affects the way people think about these apps? Yeah, there's kind of like a esoteric academic view of these prediction markets that is pretty fascinating. It's that, okay, we've kind of all lost faith in traditional polls as being 100% correct. Many of us have lost faith in other institutions in terms of predicting what might happen. But if you put your money where your mouth is, if you have skin in the game and enough people are trading, are dedicating money, are gambling on future outcomes, that is potentially a real oracle, a real predictor of what might happen. And this has been tested in kind of an academic laboratory. So in kind of a closed setting, right? And academics have come out and said, you know what, these prediction markets really do provide an interesting competing set of data alongside things like traditional polls. They also can be sort of a hedge. They could be a hedge against a future outcome. They could be like an insurance policy. That's why they were invented before the apps existed, right? You're a farmer and you want to hedge against there being a storm that knocks out all of your crops. So you have a prediction market and you say, I want to sell these crops at this price for the next 12 months as an insurance policy. That's where this all comes from. In some ways, it feels as if the bar has been lowered. Some might say it feels as if the bar has been lowered down to hell. But if this is where we are at the end of Q1 2026, like how could things progress or even accelerate from here? Yeah. I mean, just some weeks ago, there was a journalist who's covering the war in Iran who said he received death threats and all sorts of harassment from polymarket bettors pushing him to change the details of his report about a military strike so that they could profit off of it. And he did a first person essay sort of describing how terrifying it was to receive all of this hate mail and death threats from polymarket bettors who are blackmailing and threatening him so that they can make money. I think we're going to see more of that. I think as we get closer to November to midterm elections, we're going to see lots of examples of political campaign related prediction market scandals. And this whole profiting off of war, profiting off of famine, profiting off of death, this is not going to go away as long as polymarket is around. And as long as they are outside the reach of the US, they're going to be sticking around. Again, I'm really tempted to make a joke about what are the odds of this or that happening in a conversation about prediction markets. But I just think we have a lot of the year left. And I think midway through by the end of the year, we're going to be looking back and we might say those early controversies in 2026 were kind of quaint. I mean, the prediction markets are really going to take a crazy turn unless there is legal or legislative action. If there's some kind of nationwide effort to really rein these companies in, barring that, it's only going to get crazier. I mean, there's no doubt it's only going to get crazier. What do you think this kind of betting is doing to us as a culture? I mean, I think many people agree that it's generally probably not the healthiest thing to do. And maybe the fact that it's like this isn't like some sort of like dark web thing, you know what I mean? It's very mainstream now. It's becoming very mainstream. Yeah, it's very mainstream. Like what do you think that does to us like, I don't know, spiritually, mentally, culturally? I remind you of the early days of Instagram when everyone, every time you'd walk by something, you would like take a photo of it and post it to the Instagram grid. It was like the world became this canvas for sharing photos you would see. You could edit them, put filters on it. It sounds so silly to say this out loud now, but in the early days of Instagram, everyone was a photographer and you were constantly photographing, right? Now, everything becomes a casino. You might be like, oh, there's a press conference with President Trump. Can I make money there? Oh, well, there's a new Dancing With The Stars episode. How could I make money there? Literally any single thing that happens in the world becomes a frame through which you can make money. And that's, I think that's a very cynical and very strange and very depraved way of going about your life. How can I make an edge here? How can I make an edge there? How can I, you know, score a few bucks on the most trivial and silly piece of information that I may have that somebody else might not? I really think these prediction markets are, you know, changing the way that we're viewing and consuming all media on and offline. And I, yeah, what does this do to us spiritually? I mean, that's a good question. I mean, I cover the social media addiction trial in Los Angeles. You know, we heard a lot of testimony during that trial that social media is addictive and the design features suck people in and that you can't put these apps down. One would argue if that theory is correct, the same is true on these prediction markets. They operate like casinos. You have all of these app features that make them irresistible. It's one thing when it's irresistible and you're sort of engaging with someone's beauty filter and likes and infinite scroll. It's another thing when it's irresistible and you've lost your life savings, betting on some silly prediction market question. Well, Bobby, we are at the beginning of this journey. I suspect more conversations are ahead, but I'm so glad we had this one today. Thank you so much again. Me too. Thanks, Brittany. This was fun. That was NPR correspondent Bobby Allen. This episode of It's Been a Minute was produced by Alexis Williams. This episode was edited by Nina Pothug. Our supervising producer is Barton Gurdwood. Our VP of programming is Yolanda Sanguini. All right, that's all for this episode of It's Been a Minute from NPR. I'm Brittany Luce. Talk soon. This message comes from Granger. For the ones who get it done, Granger offers the professional grade products you need to get the job done with fast delivery and access to technical product experts ready to help you meet any challenge. Call clickgranger.com or just stop by. What's in your wallet? Terms apply. Details at CapitalOne.com.
