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Why prediction markets aren’t popular - Works in Progress

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Prediction markets are legal, contrary to popular belief. But they remain unpopular, because they lack key features that make markets attractive. Many entrepreneurs have tried to create prediction markets, contracts that trade on the outcome of future events. Luke Nosek, cofounder of PayPal, once worked on the problem. Sam Bankman-Fried, the jailed founder of cryptocurrency exchange FTX, is supposed to have originally wanted to build a prediction markets platform. A number of venture capital–backed start-ups are currently building prediction markets, including Kalshi, a prediction market regulated by the Commodities Futures Trading Commission (CFTC); Manifold, a play money prediction market; and Polymarket, a crypto-based prediction market currently illegal in the US. Many academics have advocated for the creation of prediction markets. Economics Nobel laureate Kenneth Arrow argued for their deregulation in Science, alongside Cass Sunstein, the most cited legal scholar; Thomas Schellin

Many entrepreneurs have tried to create prediction markets, contracts that trade on the outcome of future events. Luke Nosek, cofounder of PayPal, once worked on the problem. Sam Bankman-Fried, the jailed founder of cryptocurrency exchange FTX, is supposed to have originally wanted to build a prediction markets platform. A number of venture capital–backed start-ups are currently building prediction markets, including Kalshi , a prediction market regulated by the Commodities Futures Trading Commission (CFTC); Manifold , a play money prediction market; and Polymarket , a crypto-based prediction

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