Prediction Markets Are Eroding Our Civic Soul

Firms like Polymarket and Kalshi are turning war into yet another racket, as the suffering of many becomes a windfall payday for those few who hit the dystopian jackpot.

The odds are 100 percent that the further infiltration of prediction markets into the public square and political decisions is going to make our lives worse. Recently announced partnerships—Polymarket with Substack and X, and Kalshi with CNN and the Associated Press—have created the conditions to incubate the worst existing trends in society: reality mediated by markets, screens, and gamification; the loneliness of late capitalism unaddressed beyond the soothing repetition of virtual lever-pulling. 

This past weekend, bettors in prediction market contracts involving a U.S. attack on Iran won and lost millions of dollars. Polymarket’s exchange on the exact date of the bombing reached $529 million worth of trades, one of the largest volumes in its history. 

There are some legal issues. Some of those who bet on the ouster of Ayatollah Ali Khamenei at Kalshi may sue the company after it resolved the market as Khamenei being ruler until the moment he died. Because he died in power, their argument goes, he never left power. This left bettors who predicted he’d lose power empty-handed. Kalshi refunded $2.2 million in fees but not losses. Kalshi built a contract around a man’s removal from power, and its response to accusations of assassination bingo is a terms-of-service argument—a distinction understandably lost on the users now suing the firm.

But every participant in those markets was betting on death. Even those that lost money in betting on the attacks themselves did so because they bet on the wrong day: Imagine a roulette wheel with a crowd shouting for the marble to fall in their favored slot. Now imagine that marble triggering body parts falling from the air.

At least a roulette wheel is equitably governed by chance. These markets are easily gamed by exactly the kind of ethically bankrupt monsters attached to the Trump administration who would have foreknowledge of the strike—or those fortunate to overhear the matter being discussed over drinks. (If you are already OK with civilian casualties, profiting directly on them is just a short hop further away from humanity.) Sure enough, the market-tracking company Bubblemaps announced on Sunday that six crypto wallets established within 24 hours of the strikes had won $1.2 million buying contracts on it. We’re in a boom market for Armageddon arbitrage: Earlier this year, two Israel Defense Forces reservists were arrested for using confidential information to place bets on unspecified Israeli military operations.  

But the corrosive nature of prediction markets reaches beyond the merely morbid as news........

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