Over the past year, prediction markets have exploded in popularity, allowing users to bet on anything from the Presidential Election winner in 2028, to the number of tweets that Elon Musk will send across this entire week. At face value, prediction markets seem to be a virtual casino–in other words, pure gambling. It’s the thing that your uncle does at 3 AM with a setup so vast you wonder if he’s really buying up contracts on Polymarket, or attempting to hack into a foreign government’s mainframe. Yet, beneath all the memes and global hype, there is a system that has surprisingly begun to rival traditional forecasting tools.
Just a few months ago, during NYC’s mayoral election, before major media outlets had called a winner, Polymarket increased the probability that Zohran Mamdani would win. Interestingly, this wasn’t a one-off event, with a similar scenario occurring in cultural movements such as the Oscars and sporting events like The Super Bowl. But why is this? It comes down to one main idea: speed. With major media networks, their entire reputation is staked on validity, meaning more time needs to be taken with in-depth research before news reporting. But for prediction markets, every action you make is tied to immediate stakes and price changes.
Betting on a simple yes or no question can win you hundreds of dollars, meaning that accuracy is rewarded in this format, rather than random guesses or hopeful responses, which are often seen in polls where the stakes are lower. However, slower action often leads to smaller profits, even when the prediction is correct. Returning to the January mayoral election, Polymarket displayed that Mamdani’s chances of winning jumped from 18.3% to 73.8%, just a day before the NYC primary winner was announced (who would go on to be Mamdani). But this remarkable predictive power comes with one important caveat: the risk of gaining and utilizing an unfair advantage.
Primarily, it raises the question of insider trading, where certain users are able to use specific information to make trades where they are almost guaranteed to win. For instance, a certain Polymarket trader made over $1 million by placing eerily accurate bets on Google’s 2025 Year in Search, where he correctly predicted the most searched person of the year (d4vd), as well as a correct “prediction” of Google’s Gemini AI 3.0 release date. It is highly speculated that the user who made these bets is an employee of Google, giving them this advantage. Yet, the CEO of Polymarket Shayne Coplan explains in a 60 Minutes interview, “I think that people having an edge in the market is a good thing… It’s sort of an inevitability that this will happen and there are lots of benefits from it.” In other words, insider trading seems to be a signature component of online betting itself, acting as a feature allowing for increased accuracy, rather than a bug in the eyes of Coplan. It helps that these markets have very little federal regulation, in comparison to the stock market, in which organizations like the Securities and Exchange Commission ensure regulatory oversight.
Prediction markets, once relegated to the margins, have now entered the mainstream, with services such as Kalshi now providing information to CNBC and CNN. With the perfect mix of insider trading and lightning fast market movement, these markets have the potential to represent the democracy of information. But regardless of which direction these services take, there is a fundamental shift in how information is flowing, and who profits from it first.
