Prediction Marketing
The prediction market boom is liquidity extraction before a liquidity crisis.
During its initial public offering in the spring of 2012, the price of a single share of Facebook was $38. Today it is $734. Before Trump, before the US dollar fell to 10% amid European banks divesting from American assets, the digital tech boom that was enabled by widespread adoption of smartphones extended the illusion of American dominance for a bit longer. After all, America was home to Silicon Valley – a new model of entrepreneurship. And cities across the world were eager to be the home of the next “unicorn” – a company valued at a billion dollars. Every year, new millionaires were being minted, often just by virtue of joining the right company at the right time. “Learn to code” became gospel, and the looming inflation and cost of living crisis could be shrugged off, like the climate crisis, as someone else’s problem, someone in the far future. Millennials and Gen Z grew up during tech innovation and its attendant payouts, while the narrowing access to financial security as a result of an asset-based economy–where housing became a protected asset class–grew narrower still. By the time Facebook purchased Instagram to become Meta in 2012, the widening wealth gaps in the Anglo-American world could no longer be ignored. Their middle classes could not reproduce themselves.
If you’ve felt like “everything is getting worse,” it’s because so much of what you taste, touch, buy and experience has no incentive to serve you well. You, as a consumer, no longer matter; shareholders do. And to them, financial metrics such as growth and stock performance matter above all. Those metrics are easy to generate without your input. Growth? Cut jobs and raise prices. An impressive stock performance? Stock buy-backs give a cosy boost on which to end the quarter. This doesn’t just mean a poorer consumer experience, it means a poorer civic one. Corporate power, like profits, is produced at public expense. Financial deregulation is often viewed as a retreat of the state from the market, but the state’s retreat is from public wellbeing. The state grows closer to the financial market, more sensitive to those that profit from it, and more aligned with their concerns.
Financialization transformed how money was made and who was making it, and governments made a habit of bailing out private capital with public money. As much as today’s reactionaries want people to believe the “white working class” was displaced by “third worlders” coming to the US and UK, the reality is that manufacturing was sent to the third world and profit seeking expanded everywhere. The arrangement suited Western populations for as long as it meant a flow of cheap goods. But it also meant that Anglo-American economies became dominated by Finance, Insurance, and Real Estate. When profit is derived from financial activities, not goods and services, then more than the regulation of goods and services, you get the deregulation of financial activities. As “everything gets worse” and more expensive, many wish they could bend their reality in their favor, perhaps even find a way to be at the right place at the right time — like the artist who painted a mural at the Facebook office and accepted stock as payment, or the people that bought bitcoin before 2015.
Since then, the tech world has been desperately seeking to establish new asset classes mostly by pushing crypto and NFTs. Today, prediction markets have joined that push, teasing the possibility of exciting new windfalls. Last November at the Citadel Securities conference, Kalshi co-founder and CEO Tarek Mansour proclaimed, “The long-term vision is to financialize everything” his proposed path towards this was his trading platform Kalshi, which he claims can “create a tradable asset out of any difference of opinion.”
Kalshi is a prediction market, where you can trade on the outcome of real-world events by purchasing and trading “event contracts”. Prediction Markets are the latest Silicon Valley darling, a Frankenstein mix of mobile fintech being pitched as a disruption to news media and a boon to a tech industry that has lost much trust and capital in recent years. The most well-known prediction market platforms are Polymarket and Kalshi. 2025 was a banner year for them. The platforms saw record trade volume, court litigation over regulatory definitions, high-profile winnings, and flashy partnerships with news media and sports leagues. The commentary surrounding these platforms has been limited to how these platforms encourage widespread gambling and how these platforms may transform the incentives of news media, potentially even news events themselves. The coverage largely overstates both the user base and the technology.
The reliably credulous New York Times described prediction markets as “infrastructure for the legitimacy of event outcomes”, echoing the confidence of company founders, and went on to say, “Platforms like Polymarket and Kalshi now allow users to bet on virtually any outcome of a future event.” Coverage like this cites the range of disparate possible bets (Oscar nominations, Grammy winners, how often Elon Musk will tweet this month, whether Israel will strike Iran) as proof of unlimited potential. This is despite the fact that the majority of trade volume is on sports outcomes. Nonsports events don’t generate enough trade volume to be worthwhile for the platform or a user. Platforms decide what events are available to trade on, and they determine the terms of payouts. Speed of growth does not indicate long-term viability, only investor pressure to demonstrate proof of concept at increasing scale and attract more users every day.
To meet that pressure the platforms have launched a slew of deals with existing companies. Polymarket prediction data is now featured in Dow Jones platforms such as the Wall Street Journal and it was the exclusive “prediction partner” for this year’s Golden Globes. Kalshi, meanwhile, is allied with CNN and CNBC, as well as the National Hockey League. In summary, cable news and Hollywood awards shows with declining ratings and ageing demographics, and a sports league that gained more by being featured in Heated Rivalry (2025) than any real-life sports coverage: for the news networks and prediction markets, the alliance is a mutual bid for relevance and audience. No wonder equally irrelevant media organisations view it so self-evidently.
Kalshi and Polymarket are growing but are not yet mainstream. The increased attention they’ve experienced is due to the confluence of several factors. The US presidential election being predicted accurately on Polymarket and Kalshi and not by traditional news media companies, alerted people to prediction markets. The post-pandemic surge in sportsbetting in the US was fertile ground for the proliferation of platforms offering more of the same, leading to rapid valuations and investments. But after the hype of the 2024 US presidential election dissipated, daily active downloads dropped 90% across Kalshi and Polymarket, as confirmed by Fortune magazine. Similarly, daily active Kalshi users dropped from 400,000 to around 30,000 between November 2024 and June 2025, while on Polymarket, 300,000 users dropped to under 10,000 during the same period.
Following this decline, both companies launched a media blitz, with founders giving provocative interviews in order to draw awareness to these nascent ventures. Between June and December 2025, Kalshi’s valuation went from $2 billion to $11 billion. In that same time period, Polymarket’s went from $1 billion to $9 billion, with a projected valuation of $15 billion. Such valuations need breathless coverage to justify the conjured sticker price. The headlines seem to be working: in October 2025, Kalshi and Polymarket reported $4 billion and $3 billion in monthly trade volume, respectively.
To serve the growing population for whom investing isn’t a leisurely path to retirement but an urgent plea to supplement – and ideally replace – 9 to 5 incomes, commission-free trading and memestocks offer a way in on the modern timeline, with the promise of fast returns. For those who aren’t planning for a future, just chasing a better tomorrow, the immediacy of prediction markets injects the mobile app experience with the adrenaline of a slot machine while the interface and vocabulary offers the respectability of a skills based white collar financial activity, perfect for young men who want to feel savvy while they’re losing money. Kalshi displays potential winnings like a return on investment. As many have rightly observed, it’s financialised gambling. But both advocates and critics of prediction markets cite the platforms’ ability to channel “collective wisdom”, another example of taking founder PR copy at face value.
In typical founder hyperbole, Polymarket CEO Shayne Coplan told CBS News his platform is “the most accurate thing we have as mankind right now, until someone else creates some sort of a super crystal ball.” The critics fear the potential of such influence and the enthusiasts emphasise that it’s a necessary corrective to agenda-driven media and economic institutions. Both seem to be forgetting that these are still businesses that answer to shareholders. “Collective wisdom” is not a business model, and certainly not one available through prediction markets.
Prediction markets make money by transaction fees and slices of winnings. They cannot be considered effective information aggregates because in order to operate, or in other words, to generate event contracts that result in winners, you need losers. You need more people with poor insight into the future than people who can accurately identify likely outcomes. It is the ill-informed money that’s up for grabs. This is a key difference between the stock market and the prediction market that lets people play pretend stocks with real money – there is a higher cost to trading. In this way, prediction markets are not producing “collective wisdom”, they’re sanctioning insider trading against a younger and less financially secure demographic.
In January of this year, just hours before the US attacked Venezuela and captured Prime Minister Nicolás Maduro, someone made a bet that netted them $400,000 in profit. News media focused on the idea that the military events were possible to bet on, and tried to hypothesise how far this could incentivise the active shaping of world events and the inability to avoid what would be considered insider trading on stock exchanges. This, too, was functionally organic advertising for prediction markets. Far more significant is the fact Polymarket refused to settle the almost $11 million in trades made by users who bet on a US invasion of Venezuela by the end of January. Polymarket declared that the bet referred to “US military operations intended to establish control”, and that “President Trump’s statement that they will ‘run’ Venezuela […] does not alone qualify the snatch-and-extract mission to capture Maduro as an invasion.” These platforms insist that they don’t act as “the house” in the same way a sports book or casino does, excusing them from the same regulations. However they do still make the final call.
Prediction markets are not the financialisation of “difference of opinion”, as Kalshi founder Tarek Mansour claimed. Prediction markets are liquidity extraction machines, slightly more gentle than a mugging. With their dynamic and dangerously simple to use apps, they offer a gameplay wrap over a funnel. You can lose money as easily as you could make a typo. Like social media and the ads and data that made it valuable, prediction markets are a way to organise people and their attention with a more direct line to what makes both valuable to companies: their money. But prediction markets make it even easier to part users from that money. You don’t have to sell them anything but an illusion of possibility.
A functioning society, and even a functioning economy, needs more than just winners and losers. Prediction market owners and their investors are doing what they pretend to be offering to their users, making money off speculation. And they allow failing institutions the illusion of a participatory regime, much like the US and UK democracies do. The rise of prediction markets demonstrates the degree to which the financialized economy limits prosperity to a few actors while assuring the public their interest remains viable. Betting is an apt container for economic activity in countries where democracy was long ago reduced to a spectator sport.
While news orgs hype prediction markets that are primed to exacerbate the gambling epidemic, immiserating people in pursuit of shareholder value, the modern fascist resurgence has restored Silicon Valley to its defense industry origins. Palantir, Amazon, amidst others, are providing operating software and cloud services to the Immigration and Customs Enforcement, or ICE. Over the last year ICE has resumed aggressive operations occupying diverse American cities, abducting men women and children. Several thousand are currently untraceable. ICE murders, those caught on camera and others currently being obstructed from investigations, are referenced by ICE officers to further threaten those trying to protect their neighbors during the spontaneous detentions. This month, UK Home Secretary announced the new National Police Service (NPS), consolidating counterterrorism policing units and regional organised crime units. Time will tell whether this will become UK’s version of a paramilitary racial hierarchy enforcement organization akin to ICE. In the meantime, prediction markets are primarily drawing young men aged between 18 and 37.
These intangible financial activities that have no barrier to entry seem to many underskilled and underemployed young men like a prime oppotunity, rather than a box propped up with a stick sheltering a sliver of cheese. For these young men, for whom Patrick Bateman is an unironic aspirational icon, the same digital manosphere that turns a profit off the lust and resentments of men is primed to profit off their attempts to participate in the financialized economy too. By rebranding sports gambling into someting more sophisticated, prediction markets advertise addictive financial risk taking to even more people — fact that Kalshi and Polymarket are taking full advantage of by running a slate of social media content streams and twitter accounts that pretend to offer useful breaking news updates which can be leveraged into prediction market contracts. In their embrace of prediction market apps many young men faced with their own political impotence can ignore the ways they’ve opted out of changing the world with the comforting delusion that they can still opt in to profiting from it.
The collapse of the US is not limited to the decline of its infrastructure or impoverishment of its people, it’s also a culmination of the experiment of Federalism playing out across a continent that was is not “too big to fail”. The only meaningful “disruption” prediction markets offer is to state revenues. Gambling winnings from sportsbooks are taxed at the same rate as income by the Internal Revenue Service. With no update to tax law, event contracts (including sports event contracts) would be treated like futures contracts. Federal policy incentives betting on prediction markets instead of sportsbooks because, through the tax code, losses incurred on the prediction market are fully deductible in ways sportsbook gambling losses are not. At stake is billions in state revenue generated on taxed sports betting. The Trump administration has already used the withholding of Federal funds as leverage to force states to comply with ICE, targeting states with Democrat voting patterns: California, New York, Illinois, Colorado, and Minnesota could miss up to $10 billion in social service funds, including the Child Care and Development Fund and Temporary Assistance for Needy Families.
A “lack of class mobility”, “downward mobility” and the “K shaped economy”, these are economic terms for what is more accurately observable as mass impoverishment. The money people earn is losing purchasing power because a few at the top want year over year profit increases. The opportunities to earn more are shrinking for the educated and growing in unprotected and low-paying positions that demand more work for less pay, such as service work and the gig economy. The UK and US are not “being invaded by the third world” despite what their respective fascists say. They are on track to become the very cliched image of the “third world” that they once looked down on – places with little global soft power and impoverished masses who dream about immigrating somewhere with more opportunities and (in America’s case) less state violence. This story has been building for years, but it was easy to deny, the illusion of abundance endured. Consumer spending in the US has increased despite political turmoil and public pessimism, at almost 70% of the US GDP. But this is driven by a shrinking population of spenders – the top 20% of consumers are making up a growing majority of the spending, with the top 10% accounting for 49% of consumer spending.
The 2008 crash exposed the vulnerabilities of financialisation. Essentially, the rise of home prices made houses an attractive asset to purchase on debt. Lenders offered mortgages on low interest rates that later adjusted to higher payments, with both the lenders and those accepting the loans overestimating the liklihood these mortgages would be paid. But the loans were sold to investors, meaning homes in America upheld the value of securities around the world. When the mortgages defaulted, the global equity market lost nearly half its value triggering a recession and bank losses of just over $1 trillion. Since then, those vulnerabilities — produced by the incentive structure of the financialised economy — have not been remedied as much as they’ve been reiterated.
Today’s equivalent of the subprime mortgages that triggered the 2008 crash are the lines of easy credit available through credit cards and consumer debt financing through pay-later services. Consumer debt has risen 59% since the pandemic. At a thirteen-year high and expected to grow, over 12% of American credit card debt was in delinquency. Americans owe a record $1.18 trillion on their credit cards, with an average interest rate of 21.9%. In the UK, more purchasing on credit has coincided with the average interest rate of 35.7%, the highest on record since 2006. The consumer debt bubble is poised to explode economies, much like the 2008 crisis. The Financial Times reported in December that “private credit firms snapped up nearly 14 times as much consumer debt this year as in 2024, piling into riskier areas such as credit cards and buy now, pay later debt.” This is, once again, low-quality debt distributed across the global economy by private capital. That is the meaningful economic activity the self described “leaders of the free world” have insisted on pursuing over the last decade (besides surveillance technology).
A financialized economy means companies can profit off of debt and unbalanced books, while remaining unaccountable for that debt or liable for it. This extraordinary freedom has produced the modern day cost of living crisis. There is no shortage of homes, eggs, anything you could feasibly need to maintain a nourished and healthy life. What we lack is regulatory mechanisms that prevent corporations from raising prices more and more. The economy built on top of productive labor is the speculative exchange promising ever greater reward. Extraction looks like earned growth on earnings reports. But the global financialized economy demands even more speed based on shareholder funding cycles. Value is based on demonstrations of growth, not sustainable viability. Enter: products that clone the spectacle of tech innovation and were given the language of asset value and promise of wealth. The coarse truth is in the fact that these are debt cycles that rely on massive influxes of cash withdrawn for the few. The innovation is just reiteration. Like all copies it is eventually reduced to its fundamental shape, that shape may look like a casino, but that would imply a far more diverse range of possible winners than actually exists. The reality is prediction markets are the logical tech product to suit the societies left in the wake of corporate social media and the financialised economy.
The entire economy, its structure and operating logic, is a nesting doll of delusion, rentiers and debt. All of which erode the load-bearing public on which the economy is built. Now one of the dolls is wearing a suicide vest in the form of consumer debt. Credit card balances have reached a record high, with millions likely to default. Our societies had an untethered homing signal which is now replicating the economic structure it was created in, seeking a captive market to subsidize a minority elite into wealth. It’s the process that established the global north, established boomer wealth, and continues to underpin the financialized economy.
But it only works with a base that can support the extraction. As dedollarization allows the world to move on from supporting American consumption at a discount, many during the final days of American hegemony are rooting around like truffle pigs for people whose losses will make them rich, even if it’s among their own.
Speculative capital allows countries to pretend they are rich and well-functioning, while their economic structure is built on the back of taxes used to invest in companies that further extort the public. ICE and right-wing violence allow fascists to pretend they’re meaningfully engaged in world-building. Prediction markets allow people to pretend they’re savvy investors. It is pretence all the way down. All of it variations on gambling that treats other people’s futures as a token from which to extract profit, while evading accountability, cueing people to treat their own futures the same way.
The era of social web that brought us Facebook and Instagram was first driven by the promise of connection – the thrilling new frontier of digital telecommunications unbound by telecom companies. The mass adoption fostered a burgeoning attention economy. But ads have to constantly shift strategies to adapt to human behaviour, it’s cheaper to coerce human behaviour. Doing so quickly became the guiding principle of social web platform design. Personally curated high agency social web experiences (like coding your own MySpace page) devolved into low agency algorithm driven “infinite scroll” feeds, prefab lanes you were placed into. In this way, the little squares inside the rectangle of our phones reestablished the passivity and anomie of the suburbs that the early social web had briefly challenged. This of course results in compulsive behavior pursuing status, meaning, and a sense of personal sovereignty and security that atomized living engenders, which since for decades Americans have resolved through shopping.
The modern social web and the short-form video content that populates it is like a home shopping network, with in-app purchase integration and more aggressive aspirational lifestyle content than any magazine rack, and with more convincing affiliate-linked product demonstrations than any 1990s infomercial. To this was added Buy Now, Pay Later, and prediction market platforms. You can connect any credit card to Kalshi, or just use Apple Pay.
The same year Facebook purchased Instagram to become Meta, another tech unicorn was born. It was the Swedish payment deferral service Klarna. On many websites today, under the purchase price of an item, is a much smaller number — a monthly payment possible via Klarna instead of the full total at checkout.
Klarna’s highly anticipated IPO was at one point valued at $15 billion dollars. Which seems aligned with its impressive growth of 100 million active users and 724,000 merchant partners, until you remember that it’s essentially a micro loan service for fast fashion. In 2024 Klarna reported a net loss of $47 million dollars. Last year its net loss in the first three months alone was $99 million. Reuters reported that according to Klarna CEO Sebastian Siemiatkowski “the company’s rapid growth caused costs to be carried on the books before the revenue and profit that is sure to come later.” And it might, given that Klarna is only interest free if you pay on time, after which the rates range as high as 35.99% APR.
Klarna’s micropayments offer the illusion of financial flexibility. It reminds me of the way purchasing an event contract on Kalshi highlights potential earnings. On Kalshi a much bigger number of possible money is right under your deposited contract purchase amount. It looks tantalizingly like you’re buying money at a discount. This positioning visually cues an ease and freedom that isn’t totally there, at least not for the average person. The visual gimmick apes the toxic aspirations of our society and the logic of the FIRE sector — which is underpinned by the ability to purchase money at a discount. Their loans are low or no interest, their assets gauranteed to appreciate, their debts written off, their risks not carried by the same people who will draw the profit. This is why you can’t “financialize” everything, that would flatten, through accessbilility, a system that depends on tiers. The arrangement much more natural to such a sytem is the ability to mortgage anything.
As prediction markets partner with other popular apps, most recently Substack, Klarna is available on Door Dash. Tonight President Trump is going to give the annual State of the Union address. You can bet on Polymarket or Kalshi which words he’ll utter or for how long he’ll speak. Either way, a more accurate assessment of the nation would include the fact people are financing pizza. The real asset each of us is playing with is time. The economic culture of finance capital has long been to borrow from the future. Look through the most recent bubble of “prediction markets” and you can see the clock ticking is attached to a fuse.
This essay was originally commissioned by Tank Magazine in London, an abridged version appears in their latest issue RISK available now at stockists worldwide.