People are betting on war. Here’s why it matters

Summary

Podcast Summary: "People are betting on war. Here’s why it matters"

Podcast: The Story (The Times)
Date: March 27, 2026
Hosts: Manveen Rana, Luke Jones
Key Guest: Chris Stokel Walker (Technology & Digital Culture Journalist)

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Main Theme & Purpose

This episode explores the rapid rise and evolving impact of online prediction markets, focusing especially on their role during contemporary conflicts like the war in the Middle East. The discussion analyzes how these markets, operating on platforms such as Polymarket and Kalshi, allow people to bet on real-world geopolitical events, including wars—sometimes with uncanny accuracy. The episode interrogates the ethical, legal, and societal consequences of this increasingly mainstream phenomenon, including concerns about insider information and the broader gamification of global crises.

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Key Discussion Points & Insights

1. The Rise of Prediction Markets

• Definition and Origins:

  • Prediction markets let users place bets on the outcome of future events (politics, wars, sports, etc.), blurring lines between gambling and speculation.
  • After the U.S. Supreme Court legalized sports betting in 2018, platforms like Kalshi (2018) and Polymarket (2020) seized on the new regulatory environment, especially leveraging the rise of cryptocurrency.

    "It becomes far more acceptable. And then ... you see adverts for betting platforms, betting companies on television and all sorts of things." –Chris Stokel Walker, 12:03

• Growth and Scale:

  • Market value soared by 400% between 2024 and 2025, now worth $64 billion overall.
  • Individual markets see tens of millions in bets, such as the $49M currently wagered on whether the war in Iran ends by year-end (07:16, 08:28).

2. Prediction Markets & War

• Betting on Conflict:

  • People bet on when wars will end, when key attacks or ceasefires occur, or even who will rule a country like Iran.

    "You'll see people betting on when the war will end, when US Ground forces might enter Iranian territory." –Narrator, 02:25

  • Recent U.S. strikes on Iran and earlier events like the Venezuela raid saw unusually accurate, high-value bets laid just before the events happened (18:45, 20:09).

• Accuracy and Allegations of Insider Trading:

  • Founder of Polymarket claims it's now "the most accurate forecast of geopolitical events in existence." (03:00)

    "It's the most accurate thing we have as mankind right now until someone else creates some sort of super crystal ball." —Polymarket Founder (03:00)

  • Scrutiny follows after bets apparently anticipate attacks or policy moves, raising concerns about insider trading and national security (03:12, 24:05).
  • Israeli authorities recently arrested individuals for using classified information to bet on military actions (24:05).

3. The Evolution and Social Impact

• From Niche Hobby to Mass Engagement:

  • Once specialized for crypto-savvy or techy communities, prediction markets went mainstream during volatile periods—especially following political surprises, such as Joe Biden’s precipitous drop in the 2024 US election (14:14-15:57).

    "It was his really poor performance in that 2024 US presidential debate that I think energized this space." –Chris Stokel Walker, 14:18

  • Massive sums were wagered—$3.6 billion on the 2024 US election alone. A single French punter reportedly made $85 million (15:57).

    "One individual trader... bet $30 million on Donald Trump winning. He ended up making $85 million on that bet." –Chris Stokel Walker, 15:57

• Gamification and Ethical Concerns:

  • Betting on serious human events—wars, assassinations, national disasters—turns global upheaval into a game (07:27, 34:18).
  • The host and guest reflect unease:

    "I think it detaches us from the humanity. The fact that you can effectively bet on assassinations is really horrific when you think about it." –Chris Stokel Walker, 34:18

4. Regulation and Legal Pushback

• Regulatory Grayzone:

  • US markets are regulated as commodity exchanges, not traditional gambling; this creates loopholes and patchy oversight (09:36, 10:57).

  • Some states (Arizona, Nevada) have brought lawsuits or banned platforms for enabling bets on politics or war (17:03, 27:17).

    "Arizona... charged Kalshi with allowing people to make illegal bets on election outcomes, using a state level law..." –Chris Stokel Walker, 27:17

  • The US “Bet Off Act” would ban wagers on war, terrorism, and other sensitive events (27:17).

  • Polymarket and Kalshi have updated rules to ban insider trading, restrict political candidates from betting on their own campaigns, and prohibit participants in events (like athletes) from wagering on them (29:03).

5. Potential Influence on Real-World Events

• Markets as Crystal Ball—or Steering Wheel?

  • Extremely accurate prediction odds potentially serve as early-warning signals for rivals and governments.

    "If you’re watching them very closely, you might be able to see what's happening and if you're a country, you might be able to respond accordingly." –Manveen Rana, 31:30

  • The gamification can even change behavior: companies have altered earnings calls to fulfill prediction market bets (31:33-32:22).

  • Governments and militaries might attempt to manipulate markets with disinformation, risking both national security and the integrity of the platforms (33:19).

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Notable Quotes & Memorable Moments

• On the Mindset Shift:

  "Everything almost seems like a game." —Chris Stokel Walker (07:27)

• On Uncanny Predictions:

  "A number of punters have reportedly made about a million US dollars by correctly predicting when the United States would strike Iran at the weekend." —Chris Stokel Walker (02:38)

• On Regulation’s Tightrope:

  "People like the opportunity to kind of strike it rich... They don’t like it if they think that the markets are fundamentally rigged against them. And that is the tightrope the platforms are having to walk." —Chris Stokel Walker (25:52)

• On the Ethical Line:

  "We're not just losing money here, we're potentially losing our humanity." —Chris Stokel Walker (34:18)

• On Potential Manipulation:

  "As an Israeli or as someone in the Israeli military, do you then start to try and seed false information to kind of give an indication that things are going in one direction and actually they're going in another? ... The problem... at the core of this, you don't just have two governments... you also have some bettors... they're the ones that ultimately would lose out because you're seeding false information." —Chris Stokel Walker (33:19)

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Timestamps for Key Segments

• Introduction to Prediction Markets & War: 01:36 – 03:12
• Market Mechanics, Growth, and Main Players: 04:30 – 10:43
• UK/US Comparison and Regulatory Differences: 10:43 – 12:03
• Legalization of Sports Betting/Origins of Kalshi & Polymarket: 12:03 – 13:58
• Mainstreaming After Political Upheaval: 14:14 – 15:57
• Massive Bets/Examples of Winnings: 15:57 – 17:03
• Political Connections and Market Expansion: 17:15 – 18:45
• Cases of Uncanny Prediction (Venezuela, Iran): 18:45 – 21:13
• Insider Trading and Legal Pushback: 24:05 – 27:17
• State/Federal Regulatory Action, Companies’ Response: 27:17 – 30:23
• Potential to Influence Real Events/Business Example: 31:07 – 32:22
• Gamification, Disinformation, & Societal Impact: 33:19 – 34:18

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Conclusion

The episode highlights the astonishing power—and deep ethical pitfalls—of prediction markets, especially as they increasingly intersect with war, politics, and global crises. While these markets can offer real-time insight into how informed crowds view world events, they risk becoming vectors for unethical profits, insider trading, and the trivialization of deeply serious subjects. As bet sizes and stakes escalate, governments and platforms alike are scrambling to keep pace, searching for regulatory solutions that balance innovation, transparency, fairness, and basic human decency.

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For comments and feedback: [e-mail]

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Producers: Sophie McNulty, Julia Webster
Executive Producer: Tim Walklate

Transcript

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[Narrator/Reporter]

From the Times and the Sunday Times, this is the story.

[Manveen Rana]

I'm Manveen Rana.

[Narrator/Reporter]

Watching the war in the Middle east

[Manveen Rana]

unfold has caused shock and horror around the world.

[Narrator/Reporter]

But for some, it's also offered an

[Manveen Rana]

opportunity deadly American strikes. And some people may have made money from them.

[Narrator/Reporter]

In the murky world of online prediction markets, on sites like Polymarket and Kalshi, users can place bets on many aspects of the war.

[Polymarket Representative]

Polymarket takes bets on anything from who will win the NCAA tournament to what will top the Netflix movie charts. And increasingly popular are trades like this a U.S. and Iran cease fire by June 30th.

[Manveen Rana]

If you take a look at any

[Narrator/Reporter]

one of these sites, you'll see people betting on when the war will end, when traffic will be able to pass through the Strait of Hormuz, and when US Ground forces might enter Iranian territory.

[Chris Stokel Walker]

A number of punters have reportedly made about a million US dollars by correctly predicting when the United States would strike Iran at the weekend.

[Narrator/Reporter]

It's become such an issue, eerily precise predictor of what's about to happen, that the founder of one of these sites, polymarket, claims it's the most accurate forecast of geopolitical events in existence.

[Podcast Host]

It's the most accurate thing we have as mankind right now until someone else creates some sort of super crystal ball.

[Manveen Rana]

But how does it keep getting it right?

[Narrator/Reporter]

Some are alleging that the unusually accurate bets could be the sign of people profiteering from insider dealing.

[DraftKings Advertiser]

The perfectly timed wager is raising questions about possible insider knowledge with national security implications.

[Narrator/Reporter]

Both Polymarket and Kalshi said this week that they'd tighten their rules on insider trading. And now some US states are taking action.

[Chris Stokel Walker]

Attorney General Chris Mays in Arizona is

[Polymarket Representative]

suing the company behind Kelsheet.

[Marketing Expert]

Calshi is a betting site, an operation that the attorney General says is operating illegally. An illegal gambling business unlawfully allowing people to bet on Arizona elections.

[Narrator/Reporter]

So what are these prediction markets? How did they become so popular? Are they influencing the course of the war? And what can we learn about the state of the world from the bets people are placing on them? The story today people are betting on war. Here's why it matters.

[Chris Stokel Walker]

I think they first came up a few years ago on my social media feed and they seem to be inexorably tied up with X, the platform formerly known as Twitter. I think there's a kind of common ground between people who spend time on there and people who spend time on these prediction markets.

[Narrator/Reporter]

That's Chris Stokel Walker, a journalist who specializes in technology and digital culture.

[Chris Stokel Walker]

Really, I think seeing them being posted on Twitter with screenshots of these really weird bets that you could make where people were effectively saying this is a way to get free money because it was really obvious things that were going to happen that they took positions on and ended up cashing out.

[Manveen Rana]

When did you first actually log on and see what they're about?

[Chris Stokel Walker]

Pretty much soon after I saw those initial posts. I thought, well, I better look at this because it felt just suddenly all consuming thanks to the way that social media algorithms work. Of course. Turns out not really to be the case, although they are building up ahead of Steam and yeah, it was quite surprising what you end up actually seeing when you get on there.

[Manveen Rana]

And we should say you can log

[Narrator/Reporter]

on and see them.

[Manveen Rana]

You can't bet in this country officially, so just log on for us and just describe what it's like what are you seeing?

[Chris Stokel Walker]

Yeah, so if you load up the, for instance, polymark at homepage, you have a website that presents you with a global map to start off with, and it shows you a range of different elections that are taking place on which you can bet. So currently, I could bet, if I wanted, on the next Prime Minister of Nepal. I'll be completely honest, I don't really know all that much about that. Or I could bet on the Columbia Chamber of Representatives vote, which is taking place imminently, apparently.

[Manveen Rana]

Quite niche.

[Chris Stokel Walker]

Yeah, really niche. And, you know, there are other elements of the website that kind of get into quite how niche this is. So at the top of the page you have different options for areas, markets that you can bet on, including politics and sports and crypto esports. There's one devoted solely to Iran. So if I click into that Manveen, then I could bet on when we will see a ceasefire, whether or not it will be by December 31st or June 30th. The bettors there believe that certainly December 31st is more likely. 80% of people believe that's the case, although $49 million worth of trades have been wagered against that at the minute. Similarly, bets on the control of the Kharg island, who will be the Iranian leader by the end of 2026. Who

[Manveen Rana]

are the favourites there?

[Chris Stokel Walker]

Well, it seems to be that they've got Mujtab Al Khamenei, who's at 53%, and Reza Pahlavi, who's at 13%.

[Manveen Rana]

What do you make of this? Because it is quite unusual to be able to see, you know, at a time where the world is quite mad, to see geopolitics set out like that as a series of bets.

[Chris Stokel Walker]

Yeah, it's bonkers. It speaks to, I think, the way in which we live nowadays, where everything almost seems like a game.

[Manveen Rana]

So take us back to the start, because, you know, this whole idea of prediction markets does feel new. What exactly is it? What exactly is prediction betting?

[Chris Stokel Walker]

So it's wagering on the potential outcome of a future event. So they're, in effect, betting sites, though they do occupy this very odd gray area, or actually they are regulated as if they're selling financial instruments. But effectively what happens is you decide that there is an event coming up that you think is likely or unlikely to take place, you put some money on it, on the outcome, that event. So whether it happens or it doesn't, and then you potentially make money.

[Manveen Rana]

Just give us a sense in terms of numbers, of how big this market has become.

[Chris Stokel Walker]

Yeah, so it's increased more than 400% between 2024 and 2025 and now is a $64 billion market. So in the broad sense it's huge. It is absolutely massive. And then you look at the individual markets that are being traded here and $49 million on fire deadline and things like that, you start to realise quite how much money is being wagered and

[Manveen Rana]

this has surged in very little time. Who are the biggest players? Who are the big prediction market holders?

[Chris Stokel Walker]

Yeah, fittingly, given what we're talking about, it's a two horse market. So it's Polymarket and it is Kalshi. Polymarket is probably the one that people recognize the most. Kalshi is still significant in this space, but they seem to just not quite capture the same public attention. I wonder whether perhaps that's just because it is a little bit more difficult to pronounce in terms of it's not unusual name that you'd expect.

[Manveen Rana]

How do they view themselves? Do they view themselves as a gambling market? You know, we've heard the CEO of Polymarket talking about it almost as a prediction site.

[Chris Stokel Walker]

Yeah. And their social media presences actually hint more towards that latter element. You know, they like to sometimes see themselves as an alternative news source, so they take the temperature of the public and then they present that to the world. So yeah, they believe that they are this kind of new source of information, a way of gazing into the crystal ball of the future and predicting the direction of travel and often kind of see themselves as quicker and more responsive than traditional media is.

[Manveen Rana]

What about the uk? Is there a similar market here?

[Chris Stokel Walker]

The one that people are most likely to have come across and might even have used themselves is betfair. So effectively you can bet for, for instance on the outcome of political elections and you can often be going in a market where you are dividing a single pound be the yes or no in this space. There are other ones like sports betting products through platforms like Matchbook. So we're not a world away from this, but I think it's not captured the same sort of trendiness that Kalshi and Polymarket have in the us.

[Manveen Rana]

Yeah, we don't sort of seem to have the same kind of frenzy, but at the same time, I remember in the last couple of elections there were moments when it looked like the odds and the way the betting around the electoral outcomes were going were almost more accurate than some of the polls.

[Chris Stokel Walker]

Yeah. And this is either because people spend an awful lot of time and effort trying to use statistical models to get one up on either their competitors, their peers, or just generally the house. Or it's because actually they know something and they often dabble in this and that gets into this idea of their regulatory sort of stance. So in the US they're treated as these commodity markets, these traders. So they're not regulated by a kind of traditional gaming body like they would be if they were a casino bet platform, for instance, in the uk that they come under the kind of rule of the gambling commission. Which means that that's why we haven't got quite as much here in the UK as the US does to understand

[Manveen Rana]

the sort of frenzy that seems to be happening in the US and has happened in very little time. You know, we've had news breaking about people winning eye watering sums by betting on the Iran war, on these prediction markets. It does feel like it's taking over at the moment. Where does this whole story start though? When do they start to emerge?

[Chris Stokel Walker]

You have to go back around about a decade. So in 2018, the U.S. supreme Court legalizes sports betting, which means that you can start to do this an awful lot more in the United States. I remember going to Las Vegas as a kind of late Teenager now, almost 20 years ago, and even then you weren't necessarily able to bet beyond a certain number of small spaces in casinos in Las Vegas. People literally traveled across the country in order to lay bets on sporting events at these massive sports books in Las Vegas. But 2018, the Supreme Court decides to basically liberalize this whole market. It becomes far more acceptable. And then in subsequent travels to the United States, I've seen that in real life you see adverts for betting platforms, betting companies on television and all sorts of things.

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[Chris Stokel Walker]

over, same year that that is happening, 2018, Kalshee is founded. Polymarket joins two years later and really takes advantage of the fact that gambling had gone from these very small pockets of legality, generally based around where there were large numbers of casinos, so Atlantic City, the state of Nevada and some Native American reservations and kind of then becomes bigger. Not immediately. It took a little bit of time. Took also the rise of the cryptocurrency revolution to really enable this and the confluence of those two things. People who were willing and able to spend money, people who often also had these kind of massive reserves of cryptocurrency that people could only Dream of and could kind of afford to take those risks. Makes it really big.

[Manveen Rana]

At the same time, not everyone has access to crypto or knows how to use it. At what point do these prediction markets go from the obscure hobby of quite techy people who are already in this space to something that does seem to be very mainstream?

[Chris Stokel Walker]

It's probably down in a weird way to Joe Biden.

[Manveen Rana]

Unexpected.

[Chris Stokel Walker]

Yeah, well, exactly. Who would have thought that a very old US President and then presidential candidate would have kick started this thing? But it was his really poor performance in that 2024 US presidential debate that I think energized this space.

[Joe Biden (clip)]

Making sure that we're able to make every single solitary person eligible for what I've been able to do with the, with the COVID Excuse me, with dealing with everything we have to do with. Look, if we finally beat Medicare, because

[Chris Stokel Walker]

there was at the time a massive shift in perception of whether he would actually not just win that electoral race, but end up running at all. And of course we now know he didn't. So this massive rampant speculation from within the Democratic campaign saying, well, actually, will he or won't he drop out? Who will replace him? That is a really feverile market for betting on this sort of stuff. And so turns out that a lot of people took positions that Biden would have dropped out of the race in that 2024 U.S. presidential election. They ended up being correct. And so suddenly there was this idea that they could forecast the future because

[Manveen Rana]

for a while he was clinging on, saying he was going to run whatever happened. And everyone thought this can't possibly be the way the election pans out. So that's when it really kicks off. How big does it become? I mean, how much are people betting and potentially winning during that election?

[Chris Stokel Walker]

Enormous sums. So in that 2024 US presidential election, people really got a taste for G. 3.6 billion was wagered on the outcome of the US election. One individual trader, a French, what you would call whale in the terminology, bet $30 million on Donald Trump winning. He ended up making $85 million on that bet.

[Manveen Rana]

Wow. One bet, one bet and this French

[Narrator/Reporter]

gambler comes out with $85 million.

[Manveen Rana]

Yeah, that's extraordinary.

[Chris Stokel Walker]

It is. And just as with the national lottery, just as with the football pools in the old days, you see success and you start to think, well, that could be me, I could end up winning that. And so suddenly people start reaching for their phones, they reach for their keyboards and their mice and they start logging onto these platforms. People who maybe wouldn't have bet had it not been for the liberalization of that market almost 10 years ago. And they really take to it in their drove.

[Manveen Rana]

So that election becomes the moment. People are hearing about it more than any other moment. They can see the incentive, they can see people winning big. What happens with Donald Trump in office?

[Chris Stokel Walker]

Yeah, so it's interesting because at the time, these markets were in a very odd position. So under Joe Biden, Polymarket was not allowed to operate in the US So people were still accessing it, but they had to use a vpn now. A vpn. Obviously, we've become more used to that because of the Online Safety act and people finding ways around some of the restrictions on websites these days. Wasn't necessarily the case even back in early 2025 as Donald Trump came to power. But Trump dropped an investigation into a Polymarket executive that had been ongoing under the Biden administration. As soon as he gets in, they allowed the access of Polymarket to be enabled in the United States for everyday users. And as just so happens often in the case of Donald Trump, one of his family members ends up getting relatively close to these companies. So Donald Trump Jr. Ends up becoming an advisor to both platforms.

[Manveen Rana]

Aha. So there's definitely presidential backing for these prediction markets at this stage. And then, you know, fast forward to the start of 2026 and it does feel like the news cycle has been in overdrive since that moment. You know, starting with an entirely unexpected raid overnight, very little warning on Venezuela. How have the prediction markets been reflecting all of that?

[Chris Stokel Walker]

Just as we said that they become a weird crystal ball to forecast the future. Same thing happened here. They managed to predict that there would be an invasion of Venezuela by the end of January. Warden Traders. And one of the things that we have to clarify about these markets is that you don't necessarily have to put your public name to it. So not everybody knows who you are when you are betting. You can use a username or you can just use a pseudonym. So Warren Pearson wagered around about $32,000 that Venezuela would be invaded by the end of January. He would have won $400,000 based on taking that position. Because he laid this bet just hours before the raid happened. Polymarket suggested that A, something was up here and B, that actually the strict terms of the market. And this is where often people who lay these bets end up being caught out a little bit. Is that the terminology of what you're betting on matters? In this case, he had betted that there would be an invasion by the end of January. What actually happened was of course, the capture, the seizure and the extradition of Nicolas Maduro to the United States. Polymarket said, well, technically something has happened to you in Venezuela, but it is not what you bet on. And so actually they didn't pay out in the end. That US military action was not an invasion.

[Manveen Rana]

Define an invasion. So interesting. And how has that carried on now in terms of the war in Iran?

[Chris Stokel Walker]

Well, that Iranian market is massive, as we've talked about on Polymarket in particular. And just as we saw with the kind of odd bets laid before Maduro was capt. We see similar things with the Iranian conflict as well. So just before the war started, several hundred thousand dollars worth of wages were laid with the markets betting that an attack would happen that weekend. Lo and behold, it did. And then to bring us up to date, now, almost a month into the war, we have this idea of an Iranian US ceasefire being tabled within both capitals. Again, we saw some pretty significant bets laid against that before it was publicly announced. And just a handful of accounts could have made best part of a million dollars, almost.

[Manveen Rana]

That's extraordinary.

[Narrator/Reporter]

Coming up, what are the risks of betting on everything? And could these prediction markets influence world events? That's in just a moment.

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[Manveen Rana]

Chris, you've been describing the phenomenon of these prediction markets in America, which have become remarkably accurate predictors of what's about to happen. But given how accurate they've been, given how there seem to be bets laid hours before huge global upheaval is unleashed, there will be fears that there is insider trading effectively happening here, that people are using their insider knowledge to lay bets knowing they're about to happen.

[Chris Stokel Walker]

And those fears are not unfounded. So in February, Israeli authorities arrested a number of people. They charged two on suspicion of using classified information to place bets about military operations at the Israeli military were taking place about and then using that to bet on polymarket. The problem is unpicking those amazing savants who are able to see into the future and actually just are doing this on the legitimate side versus those who seem to be using insider information to try and get a little bit of an advantage and make some money at the side as well.

[Manveen Rana]

I mean, there will be people who criticize these prediction markets for the fact that it is possible to manipulate them. It is possible, if you have have insider knowledge, to make money out of that knowledge, but also because in some ways it seems unethical to be able to bet on various outcomes in a war. How do polymarket and Kalshi respond to those criticisms?

[Chris Stokel Walker]

They've taken pretty significant steps to try and tamp down on insider trading on those markets. But they point out rightly that they're financial markets and financial markets come with risks and people do use information that they have obtained in financial markets. So they're regulated much differently from the traditional sports gambling sites that we're used to. They're seen and watched over at a federal level. So they avoid these kind of state by state regulations in the United States.

[Manveen Rana]

And yet even in financial markets, people are allowed to research and have knowledge of investments. But insider trading is definitely frowned upon. Is it uncomfortable to be blurring the line between gambling and investing?

[Chris Stokel Walker]

For me, yes, I think it's a really odd position that these products, these markets, these platforms occupy. When I log on, I log on and look at it and go, okay, this is interesting, but I'm not so sure that I would want to actually stake real money on it because of that risk. Because maybe you're the mug, you're the one on the losing side of this bet because someone knows more information than you do and then think sits really uncomfortably. People like the opportunity to kind of strike it rich and get very, very lucky. They don't like it if they think that the markets are fundamentally rigged against them. And that is the tightrope that the platforms are having to walk. And I think that's why they are working so much to try and head off any of those kind of questionable elements like the Iranian war, Israel investigation, like some of these more suspicious looking trades. They recognize that their future depends on people believing that they can actually make money from this and not that they are the patsies that are being taken advantage of by the people who have the actual information.

[Manveen Rana]

We are starting to see some legal pushback against these platforms for exactly those reasons. What's the American government's position on all of this? How are they treating it so federally

[Chris Stokel Walker]

they seem okay with it. State by state, you are starting to see some action taken against these platforms. So Arizona, just in the last week and a half or so, they charged Kalshi with allowing people to make illegal bets on election outcomes, using a state level law to try and bring them to heel because they feel deeply uncomfortable about it. Nevada has banned Kalshi. They issued a temporary restraining order on the operation of the platform in that state. Obviously very important because Nevada, home to Las Vegas, lots of other places where really it is the Mecca of betting. And we are seeing a kind of cross political point of view, not necessarily across party lines, but across the Senate and the House in the United States. So a Democratic senator called Chris Murphy and a Democratic representative called Greg Karzai introduced a new act called the Bet off act, which would prohibit betting on anything to do with terrorism, anything to do with war, any sorts of events where government officials might have any kind of knowledge of what the outcome could be, an attempt effectively to try and head off some of those issues. And that hasn't gone unnoticed. So federally there is still a little bit of sluggishness. But earlier this week, the U.S. commodities Future Trade Trading Commission, which is the body that would oversee the regulation of these platforms, they announced that they're integrating a task force to try and develop some sort of regulatory framework because they think that it's a little bit too loose at the minute, I think.

[Manveen Rana]

What do the prediction market companies make of all of that, what's their response been?

[Chris Stokel Walker]

Yeah, so the Arizona charge came as a pretty big shock. It was a seismic moment in this very brief history of this kind of area. And a CALCI spokesman said in a statement that states are able to file criminal charges on very paper thin arguments. They said states like Arizona want to individually regulate a nationwide financial exchange and they're trying every trick in the book to do it. Having said that, they did also very shortly afterwards ban political candidates from being able to trade on their own campaigns, knowing that perhaps they could see either the outcome or know whether or not they might drop out or whatever. Similarly with sports, they are prohibited if they participate in any of those sports from trading on those same markets. That Kalshi spokesperson said would further demonstrate our commitment to safe markets. And polymarket has done much of a muchness. So the company's rewritten its rules to say that clearly users can't trade on contracts where they might possess confidential information or they could influence the outcome of an event. The company's chief legal officer Neel Kumar said these rule enhancements make our expectations abundantly clear for every participant across both platforms.

[Manveen Rana]

Where do you think this is all headed? Are prediction markets here to stay?

[Chris Stokel Walker]

Yes, I think with much more oversight. The reality is that this habit is embedded. People like it and they've got a taste for it. But I think it'll just change a little bit. You might actually see even more people adopting it because of these rule changes, because of the prohibitions of people who might have insider information being able to trade on it. It kind of gives license to those of us who are in the general public to go, well, actually, maybe I stand a better chance now. Of course, that's the classic gambler's gambler, right? If I just come back next time I might do a little bit better. But I do think that it is a significant moment and gamble. These things aren't going anywhere.

[Manveen Rana]

How much do you worry about these prediction markets and their ability to almost influence geopolitics, not just reflect them or predict what might happen, but almost influence it. Whether it is through insider knowledge and people wanting to make a profit very quickly, or the fact that if you're watching them really clearly, if you're watching them very closely, you might be able to see what's happening and if you're

[Narrator/Reporter]

a country, you might be able to respond accordingly.

[Chris Stokel Walker]

The concern is that we see that already in the business space. So there have been financial earnings calls by companies where they've done their normal statements, their forward looking projections of how their business is doing. They've got to the end of the call and then they've said, oh, I forgot I need to say these things because they are on a prediction market. And so they just run off a list of words because it said on a Kalshi or a polymarket prediction market that this CEO would say these words on this call.

[Podcast Producer]

I hope we are answer your question on that. I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call. And I just want to add here the words Bitcoin, Ethereum, blockchain staking and web3 to make sure we get those

[Chris Stokel Walker]

in before the end of the call. All right, well, we've taken all of our questions. That's it for today. Thanks for joining us, and we'll talk to you again next quarter.

[Manveen Rana]

Oh, my God. They're literally fulfilling a bet.

[Narrator/Reporter]

They're making sure somebody wins.

[Chris Stokel Walker]

Yeah, well, because they see it as a game. Right? And I mean, this is the thing. These markets are being presented as a game, both by the people who use them, but also by the people who organize them. And I think that's part of the challenge is until now, they've been treated as something slightly different from the traditional form of gambling. They've been seen as not being as serious, therefore, not needing as strong a touch in terms of the regulation. But things like that, I think, start to really change the calculus.

[Manveen Rana]

Chris, you mentioned earlier the Israeli case where people allegedly had information about an attack that was about to happen and were able to make a bet on it. I mean, if you were the Iranian regime right now, you'd be watching those prediction markets very closely.

[Chris Stokel Walker]

Yeah, big data is important in modern warfare. And this is yet another source. I mean, one of the challenges is that if you start to play that out and think about the consequences is as an Israeli or as someone in the Israeli military, do you then start to try and seed false information to kind of give an indication that things are going in one direction and actually they're going in another. The problem with that, of course, is at the core of this, you don't just have two governments trying to figure out what each other is doing. You also have some bettors that want to engage in this market, and they're the ones that ultimately would lose out because you're seething false information here.

[Manveen Rana]

Do you worry about what, you know, the gamification of everything in the world, geopolitics, what it does to us as a society? If we approach everything as a gamble?

[Joe Biden (clip)]

Yeah.

[Chris Stokel Walker]

I think it detaches us from the humanity. I mean, the fact that you can effectively bet on assassinations is really horrific when you think about it. But because it's presented in this way of, well, who is the next leader? What is the consequence? Where will the next missile strike land? You start to think of it as just fun. And that, I think is a real concern. It's one of the things that know is almost more consequential than whether or not people are losing money under uncertain terms. It's that idea of we're not just losing money here, we're potentially losing our humanity.

[Narrator/Reporter]

That was a technology journalist, Chris Stoeckle Walker. The producers today were Sophie McNulty and Julia Webster. The executive producer was Tim Walklate. Sound design and theme composition were by Malaceto. If you have any questions or comments on today's episode, do drop us a line to the [e-mail] or leave us a review wherever you get your podcasts. Thanks for listening.

[Manveen Rana]

We'll be back tomorrow. Sa.

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