The nearest casino is about 260 miles from where I sit right now. The state in which I reside doesn’t allow for online sports gambling. One of the country’s most renowned poker houses sits in the suburbs of my city, but it’d be too much of a pain for me to hop over during my lunch break. These are all good things for my bank account. But prediction markets—like Kalshi, Polymarket, and Robinhood—are becoming more popular by the day, and it’s getting easier and easier to gamble your money.
And that’s a scary proposition.
In the past few weeks, you could log into one of these websites and bet on when Iran’s leader, Ayatollah Ali Khamenei, would be ousted from his position of power, when US forces would enter Iran, and whether gas would sit above $5 per gallon by the end of March. You could even wager on when a nuclear bomb would be detonated (getting paid out on that if it actually happens probably won’t be easy).
It’s a new world for those who want to risk their money on fast action without ever having to leave their bedroom. But it’s also a world where you must be cautious—or risk a substantial chunk of your money.
What Is a Prediction Market?
A prediction market is an online platform where you can bet on future events occurring. You can bet on sports. You can bet on the Oscars. You can bet on geopolitics. You can bet on how many earthquakes measuring above 6.5 on the Richter Scale will occur in the next week.
Even if you don’t wager your money, prediction markets can still give you a sense of where the world is heading or at least where people think (or want you to think) the world is heading. If you want to wager your money on March Madness, the upcoming mid-term elections, or the highest temperature recorded in Seoul today, sites like Polymarket, Kalshi, and Coinbase will allow that to happen.
Here’s how NerdWallet explains it:
“Prediction markets run on a type of financial instrument known as an event contract. An event contract has a nominal value—often $1—and traders can buy ‘yes’ or ‘no’ positions on it for some fraction of that value. When the event happens, the contract pays out to whoever was right. For example, imagine an event contract on whether or not the S&P 500 will close above 7,000 points by the end of 2025. If a trader buys ‘yes’ positions on 1,000 contracts for 25 cents each, and then the index does close above that level for the year, the trader would earn $1 per contract, quadrupling their money—a return of $1,000 on an initial investment of $250. But if the trader were wrong, they’d get nothing and would lose their $250.”
The price of a share represents the probability that a particular event will happen. Look at a screenshot taken a few days ago on Polymarket.
If you predict Sinners will win Best Picture at the Oscars, you can buy those shares for 22 cents. If that film takes home the ultimate Academy Award prize, those shares would become worth $1, and you’d make a 78 cent profit for each share you purchased. If you took One Battle After Another and that movie won, the share also would become worth $1, but your profit would be much less because it was such a heavy betting favorite.
If you took Sinners but One Battle After Another wins, you’d lose your 22 cents per contract. If you took One Battle After Another and Sinners prevails, you’d lose all 76 cents.
Are Prediction Markets Like Kalshi and Polymarket Legal?
They are for now. Kalshi and Polymarket have been fighting legal battles for the past few years, but governments seem more comfortable with this type of wagering. Just about every major sport in the US has a relationship with online sportsbooks like DraftKings and FanDuel, and 40 states now allow some kind of legal sports gambling. After President Trump came into office for his second term, he ended the federal government’s ban on Polymarket from operating in the US (it should be noted that Trump’s son, Donald Jr., is an advisor to both Kalshi and Polymarket).
Prediction markets are regulated by the Commodity Futures Trading Commission, meaning the wagers offered by Kalshi and Polymarket are seen as “event contract exchanges” (where the bets are in the form of yes/no questions and contracts are priced between 0 cents and $1). Basically, the CFTC sees this activity as putting money on future contracts, not on straight-up gambling.
For now, participating in these prediction markets is above board. But plenty of people want to change that. Nineteen states have begun taking legal action against these sites, and two Democratic senators introduced the End Prediction Market Corruption Act that would prevent the president, the vice president, Congressional members, and their immediate families from wagering money on these platforms.
Politicians from both sides of the aisle are raising concerns.
“It’s insane this is legal,” Sen. Chris Murphy, a Democrat from Connecticut, wrote on social media.
Said Republican Utah Gov. Spencer Cox: “These prediction markets . . . are gambling—pure and simple,” Cox said. “They are destroying the lives of families and countless Americans, especially young men.”
Why the raising of red flags? A Polymarket user with the name Magamyman placed bets about Ayatollah Khamenei being ousted just before he was killed in an Israeli strike earlier this month. In January, an anonymous trader on Polymarket put down $32,000 that former Venezuelan leader Nicolas Maduro would be out of his job by the end of July. Hours later, US forces captured Maduro. That user made more than $400,000 on the wager.
In all, more than $500 million was traded on Polymarket for when the US would begin dropping bombs on Iran.
“I think it’s likely there were people making the decision on war with Iran that had a financial interest in doing so because they had placed a bet on one of these markets,” Murphy told the New York Times. “It’s worse than insider trading.”
Why Excessive Gambling Scares Me
When I was in college, I started gambling on sports through foreign-based websites, and even though I KNEW sports (I was a sports writer, after all), I eventually found myself down a couple of hundred bucks. Since I was only paid like $12 per article by my school newspaper and since I didn’t feel like my parents would look kindly on me throwing away all that money on whether the Florida Gators basketball team would beat Ole Miss by at least 10 points, I logged off those sites and never returned.
Then, when I was a summer intern at the newspaper in Memphis before my senior year of college, I discovered the allure of Tunica, Mississippi, an oasis in the delta only 45 minutes away that houses several casinos. I remember one night in particular where I was down several hundred dollars in blackjack (this was my freakin’ rent money!), and I had to scratch and scrape until the early morning hours just to get back to even on the day.
(There’s nothing like emerging from a smoky casino after an all-night gambling session and feeling the brightness of the sun’s rays punish your eyeballs, seeing joggers and people walking their dogs and babies, and feeling nauseous immediately, especially knowing your work day begins in 30 minutes).
I still enjoy casinos. I still play poker. And I still love Las Vegas. But you’re probably not going to catch me in a sports book at 3am during WCICON26 in a few weeks. Those early encounters in college and in Tunica led me to one conclusion: gambling can be very, very bad for your health and your wallet if you let it get out of control.
Is Using Kalshi and Polymarket to Make Money a Good Idea?
I’m still no angel. I covered sports for Forbes for 10 years, and in the last several years of my tenure, I wrote about betting odds and possibly parlays for boxing matches and how best to think about winning money on your bets. Believe me, readers love that kind of content, even though I wasn’t personally betting any of my money.
And as long as these prediction markets and online sports books are legal, they’re not going anywhere.
Kalshi said it saw more than $1 billion traded on the Super Bowl (27 times higher than the previous year), and the Golden Globes even ran live Polymarket predictions during their broadcast earlier this year.
Gambling is no longer in the backrooms. It’s now as mainstream as ever.
But like smoking, drinking, and taking drugs, forming a gambling addiction is a real possibility. Recently on the WCI subreddit, a user who said he previously paid off $220,000 worth of student loans by living like a resident and who has a total retirement savings of $600,000 was looking for help after losing $200,000 in prediction markets over the past 12 months. (We’ll run a post from Dr. Jim Dahle sometime soon as he tries to help answer this doctor’s questions about what to do.)
It’s probably fine for most people to gamble a little bit—just like it’s fine for a little bit of your play money to go to crypto or angel investing or short-term trading—but once you find that you can’t (or don’t want to) stop from betting on this week’s flu hospitalization rate, it’s going to become a real problem.
[AUTHOR’S NOTE: If you think you might have a gambling problem, call 1-800-MY-RESET or visit the National Council on Problem Gambling.]
We also don’t know if gambling your money this way will be legal forever—certainly many politicians will either try to ban these kinds of activities or put them under heavier regulations—and these prediction markets have shown recently they’re willing to change the rules of the game while in the middle of that game (after taking tens of millions of dollars worth of action, Kalshi declined to pay out the Ayatollah Khamenei bets because it essentially decided that people were gambling on whether he would be killed).
Plus, you have to be OK with betting in a market where it appears people are using insider information.
When I was a kid and visiting my grandparents in Florida, my family and I used to attend jai alai matches every once in a while. Many observers said the fix was in for these events, but we wagered such small amounts on the games and didn’t know any of the players anyway that it really didn’t matter if other gamblers knew beforehand what the outcome would be. But when hundreds of millions of dollars are at stake and when you’re fighting against potential government corruption, it matters just a little bit more.
As NerdWallet noted, “Prediction market bettors run the risk getting swindled by betting on ‘uncertain’ future events against people who are actually certain about what is going to happen.”
As David Sack—an MD who’s board-certified in psychiatry, addiction psychiatry, and addiction medicine—once said, “Much of the reward [from gambling] comes not from winning, but from the possibility of winning.”
Sometimes, it’s just too damn tempting to put down some money on what you consider to be a sure winner (I mean, surely there’s better than a 98% chance Goldman Sachs will still be in business by June 30, right?). But if you are going to use these prediction markets, make sure to only wager with what you can afford to lose. Otherwise, it might be best to log off those sites and never return.
More information here:
Addiction Among Physicians: Beyond the Stress
Dealing with a Shopping Addiction
Money Song of the Week
On April 1, 2006, Brian Shaffer, only a week after his mother died from cancer, was out for a night with his friends in Columbus, Ohio. The 27-year-old medical student was outside a bar called Ugly Tuna Saloona chatting with friends, and just before it closed at 2am, security cameras caught him re-entering the establishment.
That was the last anybody saw or heard from Shaffer.
Shaffer, an MS2 at the time, sported a Pearl Jam tattoo on his upper arm, and he was known among his friends as a super fan of the band. I remember seeing Pearl Jam live in Cincinnati a little less than three months after Shaffer’s disappearance, and Eddie Vedder stopped the show toward the end of the set, showed a missing flyer of Shaffer, talked about how they hoped he would be found, and dedicated the song Wishlist to him. Apparently, Shaffer’s father was in attendance that night.
“It feels like he’s one of our own,” Vedder said that evening. “ . . . He’s one of us, and we miss him here tonight. Hopefully, we can have a happy ending to this.”
You can see the dedication (and the entire show) in this YouTube video. Otherwise, here’s the album version.
The song isn’t about money. Instead, Wishlist is about finding and having gratitude for the things you desire the most. In that moment 20 years ago, it was about wishing Shaffer would be found. At the end of the song during the Cincinnati show, Vedder sang, with Shaffer in mind:
“Come home/get him home,
Come home/come on home/get him home/come on home,
There is love waiting at home.”
Twenty years gone, and the mystery of Shaffer’s disappearance continues.
“He was going to do great things as a doctor,” his brother Derek told Mel Magazine in 2016. “He wasn’t into drugs or anything like that. I don’t think he would just take off and never contact us again. No, he wouldn’t have done that to us.”
More information here:
Every Money Song of the Week Ever Published
Tweet of the Week
To get the joke on this Twitter thread, you’d have to see the insta-classic SNL sketch featuring Nate Bargatze as George Washington explaining how life in the new America would work. If you haven’t seen it, watch the sketch and then come back to this long tweet.
COMMANDER: We’re fighting for freedom. And part of that freedom… is the freedom to retire with dignity. So we’re going to start accounts called 401(k)s.
SOLDIER 1: What’s a 401(k)?
COMMANDER: It’s a retirement account. You put money in, it grows tax-free, you take it out when… pic.twitter.com/ZQny1YUkYO
— Mark Cecchini, CFP® (@markcecchini) January 13, 2026
Have you ever wagered money in a prediction market? What did you think of it? Did you win money? Lose it? What happened?
