Welcome back, Harper Lane, who has been a frequent contributor to the 21st Century Tech Blog. Harper has picked a topic that she and I have traded emails about. It is one that I describe as a disturbing civilizational trend.
The U.S. Supreme Court in 2018 ruled that the states could regulate gambling. Canada changed the Criminal Code three years later to allow provinces to do the same.
Who could have predicted a Pandora’s Box of phone casino game apps?
Who would have predicted that gambling sponsors would dominate sports broadcasting?
Las Vegas and Atlantic City became accessible to anyone, young or old, who had a smartphone.
Today, gambling is mainstream in North America. It is all over television with featured ads that describe online casinos, sportsbooks, lotteries and other forms of legally sanctioned gambling.
U.S. sports betting industry statistics for 2025 show that Americans wagered $166.94 billion online, with sportsbook sites raking in close to $17 billion in revenue.
Online gaming has become the latest addiction to accompany those other smartphone addictions like social media sites. The U.S. and Canada aren’t alone in being dragged into this new world of “igaming.” The whole world is in on it.
Worse yet, the business world has joined the gaming world. The stock market has always been a form of quasi-gambling. But now there is something new: prediction markets where people purchase event contracts that are treated as financial plays. What’s being bought and sold are win-lose contracts that bet on outcomes of sporting events, the latest polls, election outcomes, economic performance, and even when a war will start. The temptation to put a hand on the scale to leverage the “bet” is very real. I will let Harper continue the tale.
Prediction Markets Are Institutionalized Gambling
Ever since there was something to gain, or something to lose, human beings have always gambled.
Long before stock exchanges or smartphone apps, people wagered on dice games, cards, horse races, sporting contests, and countless other uncertain outcomes. Governments usually viewed gambling as a vice. Sometimes it was tolerated, sometimes prohibited, but it generally occupied the fringes of respectable society. Betting was something people did in back rooms, racetracks, and smoky casinos.
Over the last century, however, gambling has steadily moved from the margins into the mainstream. What was once viewed as a questionable pastime has been legalized, regulated, institutionalized, and increasingly celebrated.
Then governments themselves entered the business.
In 1976, the Canadian government used lotteries to fund the Montreal Olympics, and public lotteries quickly expanded into a permanent source of government revenue. Today, lottery systems help fund everything from public services to community programs… all the while preying on their most financially vulnerable citizens.
Horse Betting Gets a Sleek Upgrade
Prediction markets are simply the next step in this evolution. Their defenders call them information markets, forecasting tools, and mechanisms for aggregating collective intelligence. The argument is that a market price can reveal what participants genuinely believe will happen, and that it can predict outcomes more accurately than pundits or expert panels due to the wisdom of crowds effect.
But the problem is that markets are not truth machines. They are incentive systems. While prediction markets are often presented as tools for discovering the most likely outcome, participants are ultimately motivated by profit, not accuracy. Sometimes those goals align; but most often, they don’t.
The Insider Problem
One of the biggest vulnerabilities in prediction markets is that not all participants enter the market with the same information.
Corporate executives routinely learn about major announcements before investors. For example, in 2026, U.S. regulators accused a Google employee of using material non-public information to trade on Polymarket contracts related to Google’s annual “Year in Search” rankings, allegedly earning roughly $1.2 million before being charged by the CFTC and Department of Justice.
The case illustrates one of the central weaknesses of prediction markets: the people with the best information are often the people closest to the event itself. When markets reward advance knowledge, they inevitably create incentives for insiders to profit from information that the public does not have.
Supporters often point out that traditional stock markets face similar risks.
This is true (and a real problem), but prediction markets dramatically expand the range of events that can become profitable targets. Once people can wager on elections, policy decisions, military actions, public health developments, and corporate announcements, the number of opportunities for insider advantage grows substantially.
A system designed to harness information ends up rewarding those who possess secrets.
When Participants Can Influence the Outcome
Insider knowledge is only half the problem.
The more troubling issue is that some market participants have the ability to influence the very events being traded.
Consider a contract tied to political decisions, military actions, or diplomatic negotiations. The individuals involved in those processes possess not only greater knowledge but, in some cases, the ability to shape the outcome itself. Alternatively, consider a prediction market tied to a corporate announcement. Executives and senior employees may have substantial influence over when information is released and how it is presented.
Consider Elon Musk announcements. An event contract could be placed on whether Musk launches a new political party or makes other high-profile announcements. In these cases, the person at the center of the market, Musk, is not merely being predicted; he is one of the primary actors to determine the outcome through his own decisions. This blurs the line between forecasting and influence, since a participant with enough stake in the result could have both the means and the incentive to shape the event itself.
At that point, what is being measured is not foresight; it is influence.
The Influence Economy Problem
Today’s politicians, influencers, billionaires, media personalities, and content creators can reach millions of people with a single post. Most recently, the President of the United States, through his Truth Social platform, has been selling event contracts to those willing to purchase advance notice to new government policies before public disclosure. This isn’t prediction marketing per se, but it is the consequence of letting the gambling horse into the business stable.
In theory, prediction markets reward accurate forecasts. In practice, however, they reward the ability to anticipate how millions of others will react. That’s because whether information in the influence economy is accurate or not is secondary to the market reaction generated. It goes beyond the event contracts themselves, creating this strange form of reflexivity.
The participants are not merely trying to predict future events; they are as often trying to predict how others react to headlines, to rumours, social media posts, interviews, and public statements. The markets, therefore, become vulnerable to narrative momentum. An event contract may move because something significant happened, or because people believe something significant might happen.
This is especially relevant in political and geopolitical markets.
A good example is how prediction markets are using the United States’ war with Iran. Traders have watched markets swing in response to statements posted on Truth Social. Statements by the President appearing on the social media site suggest probabilities and outcomes involving threats of military action, with “bets” placed on when action or lack of action materializes. In these moments, these prediction market bettors are trying to make money, not just on an outcome, but on how millions of others react to the message, regardless of whether it reflects actual changes in policy.
The Most Disturbing Markets Are the Most Popular
The ethical concerns surrounding prediction markets become nearly impossible to ignore when the contracts involve war, terrorism, or humanitarian crises.
Recent geopolitical contracts have attracted enormous attention, with significant trading volumes focused on military conflicts, diplomatic confrontations, and foreign-policy developments. Analysts studying these markets have noted growing concerns about insider information and unusually timed trading activity surrounding major geopolitical events.
Consider the incentives this creates. When a political leader issues a military threat, prediction markets immediately begin repricing the likelihood of escalation. When a diplomatic breakthrough occurs, contracts move again. Every speech, tweet, press conference, missile launch, or troop deployment creates winners and losers.
If markets are heavily trading the probability of military action, are people connected to decision-makers participating? Are political allies, donors, advisers, family members, or corporate insiders involved?
Prediction markets cannot answer those questions. They can only create the financial incentives that make the questions worth asking.
The Casino Logic of the 21st Century
Part of the prediction market appeal is understandable. Many participants are not institutional traders or forecasting enthusiasts. Like gamblers of old, they are ordinary people desperately searching for economic opportunity in an uncertain world. And as traditional paths to financial security become even more out of reach, speculative platforms can start to feel like one of the only strategies left for getting ahead.
But that points to a deeper problem. As a society, we have steadily transformed gambling from a vice into a governing principle. We have legalized lotteries, expanded casinos, normalized sports betting, gamified investing, and now created markets that allow people to wager on elections, wars, and political crises.
As a result, people stop merely betting on outcomes and begin trying to influence them.
A donor supports a candidate. An influencer amplifies a narrative. A political movement works to shape public opinion. A market participant puts their finger on the scale because they have money riding on the result.
The danger of prediction markets is not only that it drains savings accounts. It’s also that prediction markets encourage people to treat every aspect of public life as something to be traded, speculated upon, and manipulated for financial gain.
And once everything becomes a bet, we risk everything: our money, yes, but also our power, our peace, our stability, and above all, our humanity.
