Gambling is pretty fun. For people who like watching sports and tracking statistics, sports betting can be a low-stakes way to monetize their knowledge and be a little more invested in a game than usual. Poker and blackjack can be fun games to learn and play with friends in a casual environment. As long as you recognize your limits, you can have a good time. The key is moderation.
But what would happen if you took the brakes off and started gambling on literally everything from the palm of your hand on an app linked to your checking account? That’s basically what a prediction market website is, and if you’re a college student under 21, you’re probably intimately familiar with websites like Kalshi and Polymarket.
Prediction market apps hold a unique place in today’s culture. Are they betting apps, or are they just investment platforms? After all, isn’t trading on the stock market a form of betting on real-life outcomes through their effect on a stock’s price? The definitions are murky, and regulation on these platforms is slow.
Regardless of whether or not they’re actually just glorified betting apps, the main selling point of these websites is that they can be used by people under the age of 21, unlike traditional sports betting apps. Thus, college students have flocked to them as easy-to-access digital outlets for their gambling needs.
The crux of the issue these apps cause can best be described through a short anecdote. As of Feb. 22, if you go on the Polymarket website and navigate to the market “What will happen before Grand Theft Auto VI?” You’ll find around a dozen propositions like “China invades Taiwan” and “New Rihanna Album” that you can wager on occurring or not before the release of the highly anticipated game “Grand Theft Auto VI.” But the most valuable proposition within this market would probably be “Jesus Christ returns,” which currently sits at 49% happening, 52% not happening before GTA VI. As of right now, you can bet that the Son of God will not return before GTA VI drops, and you’ll nearly double your money, supposing that Jesus doesn’t come back before then. It’s free money — just ignore the potential theological ramifications of betting on the timing of the Second Coming.
The point is, many bets like this exist on these prediction market sites: They seem certain to the point of being rationalized as investments, and that’s where people get burned. Unlike most opportunities in the stock market, prediction markets are by definition a zero-sum game. Your position is either correct, or it isn’t. You can cash out at any time, but people will often ride out their position until it reaches 100% or 0% certainty. It’s enticing, to say the least, especially for a college student. Only one of your incredibly unlikely bets on “What will Boeing mention during their earnings call?” or “What will be 7th on Netflix’s top shows this week?” needs to hit to potentially multiply your money 100 times and cover expenses for the semester. A $5 bet here and there won’t hurt, but those can add up quickly and leave your bank account drained.
I think most of us will agree that it is common sense that young college students probably shouldn’t be given unmoderated access to websites that enable them to excessively bet their savings on pop culture events and political outcomes. But the problem goes far beyond Notre Dame’s campus. There is an ethical question here: should these sites really exist? They allow betting on military actions, geopolitical tensions and other real-life events with real consequences. Could insiders in world governments be tempted to shift real events with real consequences for millions of people towards their own financial favor?
Only time will tell, so if you truly enjoy the ability to bet on anything in the world from your phone, I guess I’d tell you to make hay while the sun shines before the Federal Trade Commission changes their minds regarding regulation.
