Prediction Markets: Under-45 Males Dominate Billions in Unregulated Online Betting
The burgeoning world of online prediction markets, spearheaded by platforms such as Polymarket and Kalshi, has seen an explosion in user engagement and valuation, with Kalshi recently valued at $22bn and Polymarket at $9bn. These platforms allow users to stake money on a vast array of outcomes, from sporting events to the re-opening of the Strait of Hormuz.
Demographics and Drivers
Data from analytics firm Morning Consult reveals that 71% of prediction market users are male and disproportionately under the age of 45. A poll by the American Institute for Boys and Men (AIBM) and Ipsos indicates that over a quarter of American men aged 18-24 have used such platforms in the past six months, compared to 14% of the general public. Professor Elvira Bolat of Bournemouth University attributes this appeal to the intersection of existing male-dominated online cultures, including sports betting, crypto speculation, and 'finance bro' culture.
Jonathan Cohen, head of sports betting policy at the AIBM, suggests a neurological factor, citing young men's 'underdeveloped pre-frontal cortex and a high appetite for risk'.
Regulatory Loopholes and Normalised Gambling
Crucially, in the US, prediction markets are often categorised as commodity futures trading, rather than gambling, enabling them to circumvent state-specific gambling restrictions. This classification allows platforms to operate nationwide, charging fees on transactions. Supporters argue this model provides superior odds and more reliable insights than traditional polls, as opinions are backed by capital.
However, critics contend that the design and marketing strategies of these platforms deliberately downplay risk, normalising what is, behaviourally, gambling. Experts warn that young men are being lured into substantial losses by interfaces mimicking traditional stock trading environments.
Insider Trading and Geopolitical Exploitation
Evidence suggests that while many users incur losses, informed traders and institutional entities are profiting significantly, sometimes from bets on sensitive geopolitical events. Reports by Bloomberg News and the Wall Street Journal highlight that a tiny fraction of accounts reap the vast majority of profits, often operated by firms with access to advanced data and AI bots.
The arrest of former US special forces soldier Gannon Ken Van Dyke, who allegedly won over $409,000 through a Polymarket bet on the capture of Venezuelan President Nicolas Maduro before the information was public, underscores serious concerns about insider trading. Similarly, significant sums were wagered on the timing of the Iran war, prompting US Senator Chris Murphy to publicly question the legality of such markets.
While both Polymarket and Kalshi claim to prohibit insider trading, the legal framework is complex. A crackdown has commenced, with disciplinary actions taken and legislation introduced by US Democrats to address insider trading and
