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Prediction Markets Corrupt Everything They Touch

Governments are finally waking up to the cost of turning tragedy into a tradable commodity

Online prediction markets are many things. Their founders praise them as the apex of capitalist ingenuity. Others see a fountain of crowdsourced insight into financial vibes and global affairs. Critics condemn them as ethically bankrupt.

The complicated truth is they’re all of these at once. And business is booming.

Yet by monetizing the full gamut of reality, platforms have opened Pandora’s box. Basic tenets of liberal society—democratic integrity and respect for human life—are being corroded. Regulators need to step in.

For example, Wealthsimple recently became the second company approved to offer prediction trading in Canada and is expected to launch Wealthsimple Predict this summer. This, despite how polling data suggests two in five Canadians oppose such markets. That said, Wealthsimple gained its approval on the condition that sports and politics are off limits. Instead, wagers will reportedly be confined to economic indicators, financial markets, and climate trends. If so, it’ll be a major outlier within an industry that’s suddenly worth more than the gross domestic product of Latvia or Tunisia.

Around $5 billion (US) is now trading weekly across Polymarket, Kalshi, and others—hundreds of millions of dollars hinge on geopolitical outcomes. Wagers exist on whether United States president Donald Trump runs for a third presidential term. Or a nuclear bomb being dropped before 2027. Trades on Kalshi based on Iran’s former supreme leader Ayatollah Ali Khamenei being “out” by March 1, 2026, reached $54 million (US) before the site cancelled payouts after he was killed in US–Israeli military strikes on February 28. The company’s chief executive officer posted that the platform prohibits transactions “directly tied to death.” Users were unimpressed.

“This is American commercial immorality on steroids,” Democratic senator Chris Murphy of Connecticut told the Washington Post in early March, as fresh chaos roiling the Middle East sparked a betting bonanza. “Once events that involve good and evil simply become a financial product, I don’t know how right and wrong matters any longer.”

Backlash is mounting. Anonymous, cryptocurrency-based accounts profiting from war and other grim scenarios doesn’t sit well with most people. Still, a surge in criticism has done little, so far, to dent the gambling sites’ magnetic appeal and room to operate.

Rather than a bookkeeper (“the house”) creating bets, users self-generate them tied to any conceivable event. Wagers are placed in binary fashion—yes or no—on whether that event will happen. Blockchain technology then matches up users taking opposite sides of the........

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