On a cold January night in New York City, Chris Hayes walked off the set of CBS’s Late Show with Stephen Colbert only to face a pressing ethical dilemma. As he left the Ed Sullivan Theater and walked on to Broadway, he got a text from a friend who covers technology for NPR with a screenshot of a Yes/No market that had been spun up on the prediction market Kalshi, based on what Hayes might say on the evening’s broadcast. What would he say about Donald Trump? Would he talk about affordability, Russia, China, Greenland or other topics? It was just a $22,000 market in volume, a minor amount. But what struck Hayes as truly bizarre about the market was this: it was a prediction market about something that had already happened.
Late-night show broadcasts, despite advertising and even title claims indicating otherwise, aren’t live. They are taped in the afternoon, and in the case of Colbert, in front of hundreds of tourists who stand in line to attend. “The crazy thing was that this wasn’t a future event,” Hayes later told his social media followers. “This had happened. We had recorded it. I, Stephen Colbert, the production staff and all the people in the building know what I said or didn’t say.”
The biggest prediction-market play right now might be a bet on whether they can actually survive
Things got even stranger as broadcast time approached. Increased activity on Kalshi led the prediction market to be featured on its homepage, blowing the volume up to more than a million dollars, all on a conversation that had already taken place.
“What possible social utility, what possible utility whatsoever can be gained from a $900,000 betting market on a thing that’s happened? And obviously, I’m not going to go in and place a bet or tip my friends off to it,” Hayes said. “That would be unethical. But a lot of people would. And for a lot of the bets that are on Kalshi, it just seems like these are essentially opportunities for people with inside information to monetize their inside information.”
Hayes may be a ramrod of integrity, but others not so much, as we see with the concerning prediction-market plays in politics and the national security space. The ability to bet on everything – even though these are, technically speaking, contracts – also leads to the emergence of ridiculous whales. One Nostradamus of the net responded to the ebullient nature of Zohran Mamdani’s November election win by placing a $15,000 longshot Polymarket bet at 3 a.m. on the New York City mayor becoming the 2028 Democratic nominee. Upon waking, they apparently realized the foreign-born Mamdani is ineligible, and sold for an immediate $10,000 loss. But why does Polymarket allow people to trade on an impossibility?
The paid backers of these prediction markets – which include prominent Democrats such as Sean Patrick Maloney, president and CEO of the Coalition for Prediction Markets – repeatedly espouse them as a social good. “I know from my time in Congress that noise does not equal knowledge. And when truth gets buried, power shifts further away from everyday people to those who profit from confusion,” says Maloney in a walk-and-talk ad for his trade group. “But what if you could have better insight into what the future holds? Prediction markets, exchanges where people trade on the outcome of future events, existed for centuries.” So have soothsayers and psychics, but they are rarely the richest in the neighborhood. Massachusetts Democratic Senator Elizabeth Warren is having none of it, saying Maloney’s leadership of the group – which includes Kalshi, Crypto.com and Robinhood – “stinks like the swamp.” She may find a bipartisan friend in Missouri Republican Senator Josh Hawley, who has already introduced bans on stock trading by members of Congress and may soon look to these markets as a logical next step. But with Donald Trump’s family all in on the crypto-backed economy and the light touch of the Commodity Futures Trading Commission, this may be an instance when the swamp wins out, at least temporarily.
In the long term, the established players in this space are more skeptical. Top experts at the major sports gambling sites are doubtful about the future of prediction markets. More regulation seems likely once there is a change in administration or the Supreme Court makes a ruling on the prediction markets. According to Eilers & Krejcik’s Gaming Online Gambling Outlook for 2026, prediction markets could reach $1 trillion in annual volume this year, with sports bets by far the most popular, valued at $435 billion. The more prediction markets look like an underhanded way to get around state restrictions on sports gambling, the more likely it is that government will respond. The report warns: “The rapid expansion of sports trading via prediction markets increases the likelihood that Congress revisits the permissibility of sports prediction markets and, under certain conditions, the regulatory treatment of sports betting itself.”
People at the Super Bowl this month were not able to live-bet on the game legally – California doesn’t allow sports gambling. But it does allow prediction markets, although the NFL banned adverts for these companies during the game. But that won’t diminish the amount of betting: the American Gaming Association estimated Super Bowl wagers in legal sportsbooks would hit $1.76 billion this year, not including prediction markets or less than legal methods.
More gamblers means more betting on everything including individual players’ performances. As a result, betting scandals take on a more personal quality.
After a turnover-filled performance against Auburn in February, Tennessee Coach Rick Barnes said the quiet part out loud: “I mean at the end of the game, some of the passes that we throw, I don’t know what to say other than sometimes I wonder if my guys are betting on games. I shouldn’t say that, but… erase that. I’m just wondering what’s happening.” With 39 college basketball players currently accused of point shaving, you don’t have to wonder. The biggest prediction-market play right now might be a bet on whether they survive. The more people lose, the more they will ask whether these markets are fair. Chris Hayes has already answered that $900,000 question.
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