Wanna bet? Online prediction markets wager that you will

Joel Holsinger just quit his day job to bet on the words that famous people, like White House press secretary Karoline Leavitt, might say in public. “I thought there was a very high likelihood she would bring up ‘Thanksgiving’ in relation to the shutdown,” he said.

From his computer, the 26-year-old makes about $3,000 a week trading on the prediction market Kalshi.

“She did not say Thanksgiving, so we were out $700 yesterday,” Holsinger said.

That hurts, right? “Surprisingly for me, doesn’t hurt really much,” Holsinger replied. “I have had times where I’ve lost, for example, like, $6,000 on a bad trade, but also the inverse of that; I’ve made $11,000 on a trade, and so, you know, it’s just ups-and-downs.”

The live streaming influencer is one of millions of people flocking to prediction markets like Kalshi, PredictIt and Polymarket where you can wager on just about anything.

Tarek Mansour and Luana Lopes Lara are former Wall Street traders-turned-co-founders of Kalshi. “A prediction market is like the stock market, but instead of buying and selling companies, you’re buying ‘yes’ and ‘no’ on whether something is going to happen or not,” Mansour said. “So, it could be whether Mamdani was going to win the last New York mayor’s race, or there’s going to be a hurricane in Florida next month.”

Lopes Lara said, “People can make money on what they know, actually monetize their knowledge, monetize their hobby, because everyone is an expert on something.”

Kalshi made a name for itself in the 2024 election. The presidential race looked close, unless you were keeping an eye on Kalshi, which called the race well before the TV networks did. “It was like Kalshi, then Fox, then CNN,” said Mansour. “It was crazy.”

Twelve months later, Kalshi was the talk of another election: The New York City mayor’s race. As Democratic candidate Zohran Mamdani told the crowd on Oct. 26, “You see the Kalshi odds that have our chances of victory in the 90s.”

Kalshi’s numbers are not polling data; they represent what people think is going to happen. “It’s people putting money on what they think is going to happen, and then the wisdom of the crowds in the markets come up with the probabilities of who is going to win,” said Lopes Lara.

And you can bet on (or Kalshi says “invest in”) more than 3,500 markets on the company’s platform, like who will be a bridesmaid in Taylor Swift’s wedding.

I asked, “How do I know that someone close to Taylor Swift, or Taylor Swift herself, isn’t participating in a way that will make her outcome more favorable and let her, you know, take home a little extra cash?”

Lopes Lara replied, “Kalshi is a federally-regulated, fully-compliant exchange, and we have systems in place to monitor for any suspicious or unusual activity. We also have a lot of trading prohibitions in place.”

According to Mansour, “There really hasn’t been any issues.”

Prediction markets are booming. The owner of the New York Stock Exchange is investing $2 billion in Polymarket, and the sports betting platform FanDuel will launch its own prediction market next month.

In fact, when it’s not an election, the majority of the money traded on Kalshi is not on politics or culture – it’s on sports. Jonathan Cohen, author of “Losing Big,” has chronicled the rise of sports betting in the U.S. Regarding Kalshi, he said, “You can bet on things that a traditional Sportsbook would offer you.”

“Kalshi says this is an investment. You don’t buy that?”

“No,” said Cohen. “The New England Patriots are not more likely to win their game because I bought a contract for them to win the game. It is a speculative instrument purely for my own use and my own entertainment, which to me qualifies it as gambling rather than investing.”

But Kalshi is not regulated like gambling. Online sports betting is only legal in 31 states; Kalshi is available in all 50.  The Biden administration tried to prevent Kalshi from offering sports markets. Then, when President Trump returned to the White House, his administration vowed to break with “past hostility” – and earlier this year, the president’s son, Donald Jr, became a strategic advisor to both Kalshi and its main rival, Polymarket.

Asked why Kalshi made Donald Trump Jr. a strategic advisor, Mansour replied, “We have a lot of advisors, um, and they span across the board, across different functions. But really, this is all about growing this industry, the prediction market industry, that a lot of people really believe in.”

I asked, “What kind of advice does he give you?”

“So, it really is, again, about growing prediction markets,” Mansour said. “You know, he believes in prediction markets. We believe in prediction markets. A lot of people believe in prediction markets, and it’s really about go-to-market and expansion plans.”

“Does he come to meetings? How much do you pay him? What’s his role? I mean, this is the son of the president.”

“We, again, I mean, we have a lot of advisors,” Mansour replied. “And whether it’s our investors, whether it’s, uh, people that we really trust and respect, whether – “

“But he’s not just any advisor; he has a direct line to the White House,” I said.

“We have a lot of advisors,” said Mansour.

Kalshi is embroiled in legal battles with several states, like Massachusetts, that say Kalshi’s sports markets amount to “unlawful sports wagering.”

Are the states wrong? “We are confident in what we’re doing,” said Mansour. “We’re confident in our position from the law, and we’re also confident in the fact that, you know, customers are actually finding a lot of value in basically what we’re offering. So, I would say yes.”

But for now, if you are over the age of 18, you can bet on just about anything, anywhere, any time.

Cohen said, “It’s not enough to, like, like Taylor Swift anymore. You have to use your knowledge of Taylor Swift to, like, try to make money off of how many streams she’s going to get in a month. Or it’s not enough to, I don’t know, even like politics anymore; you have to gamble on politics. You have to make money on politics.

“That, to me, it seems like sort of the canary in the coal mine of like a ‘gamblification’ of American culture that I think is sort of still on the rise,” he said, “and we might not like what that looks like when it fully arrives.”

     
For more info:

      
Story produced by Mark Hudspeth and Madeleine May. Editor: Steven Tyler.