The High-Stakes Business Of Predicting the Future — And Its ‘Moral Costs’
(ANALYSIS) Not so long ago, U.S. gamblers mostly placed bets on which sports team would win. With the sudden rise of online “prediction markets,” masses of customers now wager on just about anything you can think of.
Polymarket, the major international platform, has drawn action worth $65.4 million on whether “the Second Coming of Jesus Christ occurs by December 31, 2026, 11:59 PM ET.” Only 1.4% of players currently say yes — down from 4.7% in February.
Polymarket only began operations in 2020. Kalshi, the dominant U.S. platform, was founded in 2018, the year the U.S. Supreme Court let states legalize sports gambling, which vastly accelerated activity. Then came emotionally exhilarating “prop” bets on real-time events during games.
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The money stakes are huge. With prediction markets, tradetheoutcome.com estimates that annual volume reached $15.8 billion by 2024, soared to $63.5 billion in 2025, and is on track to reach $200 billion this year. That compares with reported 2024 revenue of $71.9 billion for traditional gambling, $44 billion of that with Native American casinos, yielding $16 billion in federal, state, and local taxes. Alongside ubiquitous ads, the media are starting to report prediction market outcomes as news, as with polls.
Religious denominations and ethics experts have barely begun to cope with this new wrinkle on guesswork in hope of financial gain. A major preliminary question is whether prediction markets are the equivalent of “gambling,” a long-running moral issue. For some, this alluring and entertaining pastime can turn into a ruinous addiction, worse yet for low-income players. Religious concerns about traditional gambling are summarized here and here.
President Donald Trump praises the markets. Donald Trump Jr. advises both Kalshi and Polymarket, and his 1789 Capital has invested some $200 million in Polymarket and plans another $300 million.
Last week, prediction markets reached the Supreme Court for the first time as New Jersey petitioned for a decision on who regulates this booming trade. The federal Commodity Futures Trading Commission, with market industry support, asserts sole jurisdiction over regulation (though four of its five seats are vacant).
On the opposite side, 44 states, both Democratic and Republican, jointly protested last month against the markets. A New York Times survey said 20 states are pursuing court challenges, allied with the traditional gambling industry in contending that its competition from prediction markets should be subject to the same strict state supervision as sports betting.
Though seemingly the same or similar, traditional gambling may pit a bettor against the “house” while on prediction markets assorted individuals buy outcome-based contracts that predict yes or no on future events. This crowd-sourcing yields probability estimates that can be interesting and might win cash. Along with the public markets, private markets are also used for forecasting.
Many bets involve the usual athletic outcomes. But one current wager regards whether before New Year’s Day the government will announce that space aliens exist. Common predictions have covered future world events, courtroom verdicts, weather, disasters, war, economic numbers, launch dates for tech gizmos, celebrity engagements and breakups, Billboard song ratings, the most-searched names on Google, and TV plot twists.
News reports say bets on whether America would strike Iran by February 28 yielded $1 million in payoffs, $400,000 was won over the downfall of Venezuela dictator Maduro, and an anonymous player lost $100,000 wagering that Trump would actually acquire Greenland. The Brennan Center for Justice sees bets on elections as especially problematic. Some speculate that these markets will supplant political polls.
One obvious problem for the prediction game is that players may have inside information that manipulates markets and can be difficult to prevent. Kalshi General Counsel Rick Heaslip admits that despite intensive surveillance 24/7 “we can’t catch everybody.”
Last week, Kalshi barred for life and imposed a $71,356 fine against George Santos, the ex-con Congressman whose prison sentence was commuted by President Trump. He said he’d attend the State of the Union Address, posted a wager he would not, then didn’t show up and won $17,500.
Writing for denisonforum.org, a Dallas-based Christian site, Southern Baptist theologian Katie Frugé objects to proponents’ comparison of the markets with established institutions. She noted that insurance “protects what you already have a stake in,” the stock market deals in real assets, and polling does not profit from the outcomes it reaches. “Prediction markets do none of these things. At their core, they are a zero-sum wager on reality itself.”
Frugé is among those offended by such bets as whether a war will escalate, a pandemic will spread, or a celebrity will die. These are a “moral tragedy” because “the suffering of your neighbor should never be reduced to an economic opportunity” or “a line item.”
A bill pending in the U.S. House and Senate would outlaw wagering on war, terror, and assassinations as well as government actions. In April, the U.S. Senate decided to forbid members and staffers from all prediction trading.
Aryan Desarapu observes in the University of Michigan Journal of Economics that markets need to be seen by the public as “credible, trustworthy tools to consolidate information.” But.players’ partial control over a market outcome can create “moral hazard,” that is, add incentives for riskier behavior because anonymous insiders with special information feel partial protection from the consequences.
Then there’s “moral discomfort” that erodes public trust in information from the markets. The Department of Defense cancelled one such information-gathering project, fearing that wagers on the Mideast could incentivize terrorists to profit by betting on political violence and then doing just that.
Likely related, a Wall Street Journal investigation of 1.6 million Polymarket accounts indicated a tilt toward a tiny group of sophisticated bettors. A mere 0.10% of players obtain 67% of market payoffs while 70% of those posting predictions lose money. As one analyst remarks, action is “marketed as easy to win” but in reality “the game’s not easy to win.”
Expert researcher Adam Piovarchy at the University of Notre Dame Australia summarized this landscape: “Markets are very good at generating useful information under the right conditions. The question is whether those conditions can be implemented and maintained when the stakes are high, the traders are insiders, and the events being wagered on involve human lives. Enthusiasts who want to expand prediction markets to more domains of public life need to answer whether the institutional and moral costs of letting them do so are ones we should be prepared to bear.”
Richard N. Ostling was a longtime religion writer with The Associated Press and with Time magazine, where he produced 23 cover stories, as well as a Time senior correspondent providing field reportage for dozens of major articles. He is a recipient of the Religion News Association's Lifetime Achievement Award. He has interviewed such personalities as Billy Graham, the Dalai Lama, Mother Teresa and Joseph Cardinal Ratzinger (later Pope Benedict XVI); ranking rabbis and Muslim leaders; and authorities on other faiths; as well as numerous ordinary believers. He writes a bi-weekly column for Religion Unplugged.