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The prediction market industry is booming in President Trump's second term. The administration has cleared the way for these services to allow people to bet on sports, policy, world events, even elections. NPR's Bobby Allyn talked to people who have quit their jobs to become full-time prediction market traders.
BOBBY ALLYN, BYLINE: Most days 25-year-old Logan Sudeith can be found lounging in his bed in his Atlanta apartment, staring at Polymarket and Kalshi. The former financial analyst started placing bets on the two big prediction market sites for things like who will be Time Magazine's person of the year? And will President Trump say drill, baby, drill at a press conference? Sudeith's wins were piling up just as his entry-level job at a small finance firm was paying him...
LOGAN SUDEITH: Like 75,000.
ALLYN: And you're making more than that annually on Kalshi?
LOGAN SUDEITH: Yeah. Like, last month, I made, like, 100,000.
ALLYN: Seventy-five thousand dollars a year versus $100,000 a month. The math was clear. So he quit his job and joined millions of other traders who log on to place billions of dollars of weekly trades on prediction market apps. Critics say this is simply tech-powered gambling. But backers argue the wisdom of the crowd can forecast the future better than polls and the media. Naturally, betting on the news often means streaming events with President Trump and making high-dollar wagers of his unpredictable choice of words.
LOGAN SUDEITH: I'm not a fan of Trump, though I do spend most of my day listening to him and tracking what he's doing. I guess Trump winning was definitely beneficial for me, even though I didn't vote for him.
ALLYN: The Biden administration tried to rein in prediction market trading, but Trump's regulators are clearing the way for these companies to thrive. Now, is all of this legal? The short answer is yes, but it's highly controversial. It's regulated as a futures contract, not as gambling. Here's Kristin Johnson, a former commissioner with the Commodity Futures Trading Commission, which oversees prediction markets.
KRISTIN JOHNSON: The markets are not only not new, they're pretty ancient, if we kind of reflect back in terms of the notion that you could have a contract that predicts the outcome of a particular event.
ALLYN: In the 1880s, people hedged price swings in things like wheat, corn, gold and silver. Today, Kalshi and Polymarket are letting people put money down on who will win elections. Johnson fears this could lead to a type of election meddling, where money from overseas or deep-pocketed donors could try to influence how voters see a candidate's odds of winning. Johnson says this could put the CFTC in the position of being an election cop without ever having a debate in Washington about it.
JOHNSON: A public dialogue with people who will be impacted - citizens in the country and the businesses that want to do this - about what the implications of permitting those kinds of contracts might be.
ALLYN: In Miami, Evan Semet agrees election betting can invite insiders who want to profit or sway opinions. He also quit his finance job to bet on Kalshi and Polymarket full time. He even set up a dedicated server to run statistical models of his bets. Does he think the companies are doing enough to root out insider trading?
EVAN SEMET: Oh, you know, excuse my French, but [expletive] no.
ALLYN: Semet says many traders place bets under pseudonyms, so it's hard to prove insider trading on things like tech news, where he's often betting.
SEMET: There are certain wallets that, you know, miraculously have every single Google and, like, OpenAI release date nailed perfectly, and it's like, all right, just don't fade those people.
ALLYN: He's talking about crypto wallets, which is how most people trade on Polymarket, and don't fade those people means just don't bet against them. These prediction market traders have developed their own lingo for talking to each other on the online forums like Reddit and Discord.
SEMET: There's always going to be somebody that has more information than you, unless you're the insider.
ALLYN: Kalshi and Polymarket both say they prohibit and monitor for market manipulation, but beefed up federal rules aren't expected anytime soon. The president's son, Donald Trump Jr., advises both companies, and the president's Truth Social platform wants to start its own prediction market. The five-member CFTC doesn't appear ready to regulate since, right now, it only has one commissioner. Bobby Allyn, NPR News.
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