A new age of gambling is on the rise. Apps with prediction markets are attempting to distance themselves from traditional gambling, while sports gambling companies have intensified their business structure. 

Major prediction markets like Kalshi and Polymarket want to distinguish themselves from conventional gambling, in which bets are against “the house,” while bets on the markets are bets against other bettors.

Kalshi advertises that it allows “legal bets on anything, anywhere in the U.S.,” while Polymarket tells its users they can “answer the world’s biggest questions.” Both markets’ options have ranged from betting on political speeches, the start of wars, pandemics, scientific breakthroughs, celebrities, assassinations, and more. With this new generation of betting, various ethical issues emerge. Ultimately, the complex question arises: How will the mainstream population adapt to these new, and potentially unethical bets?

Both companies are adamant that they are not gambling sites, but financial exchanges offering betting contracts. This helps them get around state gambling and age restrictions, also providing tax exemptions.   

Additionally, Kalshi and Polymarket are well supported by the current Presidential administration, as the President’s son, Donald Trump Jr., holds advisory roles at both major companies.

These new markets also carry an emerging risk of insider trading. Situations have already occurred where suspicious, massive earnings, like an anonymous trader, later revealed to be a U.S. special operations member, pocketing over $400K in bets on the capture of Nicolas Maduro earlier this year, with the bulk of the bets made mere hours before the raid was announced.

On Last Week Tonight with John Oliver, he mentioned, “In February, two Israelis were charged with using classified military information to place bets … and in March more than a dozen American accounts placed bets on the U.S. military missile strikes on Iran … most wagers were placed before the first bomb fell, with most accounts made only days earlier.”

Recently, the pair have announced paid partnerships with U.S. news organizations. Kalshi made a deal with CNN, CNBC, and Fox; Polymarket partnered with Dow Jones, the parent company of the Wall Street Journal.

The Polymarket CEO has spoken highly of prediction markets, claiming them to be “the most accurate things we have as mankind right now” and they are “incredibly important to society as they help us more accurately predict the future.” Other companies like Coinbase and Robinhood are starting to move in the same direction, adding prediction markets to their apps.

Currently, over 90% of the trading volume on Kalshi is on sports. Sports gambling companies, simultaneously, have amplified their grip on the sports betting market, with a clear target on the male demographic. 

Previously, sports gambling was generally open information, an as fair-as-possible opportunity; but now bookies cannot only decide who can and who cannot bet on their platform, they’ve also built algorithms to detect “smart bets,” where money moves in the bettor’s favor, all while checking to make sure you’re a male bettor.

A Rolling Stone article mentions that the state of New Jersey saw a near 300% spike in (gambling) hotline calls in the first five years of legal betting, while in Connecticut, the number of hotline calls increased 200% in the first two years. In particular, the crisis affected young males, as “Forty percent of those calls are coming from twentysomething males,” said the executive director of the Connecticut Council.

Nate Silver, a guest host on Michael Lewis’s podcast Against the Rules, mentions both gambling and markets have “no incentives to be accurate, as to pleasing people … betting thrives around men and their egos, specifically when surrounding sports.”

Sports betting is advertised to males for all professional sports leagues. Major sports programs are partnered with gambling apps today, with their game commentators used as ambassadors. While sports podcasts have turned into sports gambling-focused podcasts, both commonly use tactics like creating parlays or long-shot bets to take advantage of people who can’t look past the potential odds.

Rufus Peabody studied statistics at Yale and built models that predicted the performances of athletes and outcomes of sporting events. He claimed, “A bookmaker can make more money if they know the public bias, and set the betting line somewhere between the true price and the price the public thinks …” This means bookies can create a betting line from the actual agreed-upon spread, vs the fans bias on a bet and make a midpoint to generate more revenue.

Bookies today are also quick to set limits on their users after any bets. While they also analyze if they believe you’ll win in the future, the new bookies are far from traditional: They only want to take in a certain amount of bets in which users play as if they were at a slot machine, “bets that if made long enough, are more likely to lose … the sort of bets fans make.”

Michael Lewis mentioned, “In 2017, the year before the Supreme Court struck down a federal law against sports betting, legal sports bookies in the U.S. generated roughly $300 million in revenue. In 2023, they took in $11 billion. In 2017, Americans made nearly $5 billion in legal sports bets; last year (2023) they spent over $120 billion.”

Lewis also reviews how the early legal sports bookies were able to negotiate to almost half the state tax rate, as well as being given the ability to provide complimentary bets to promote sign-ups. In what became a tax-free entry bet with little to no pushback, it aided in the momentum further building their abusive market.

When you think of the reason someone chooses to get into gambling, it’s most likely due to them believing it to be an easy way to earn money, when in reality it’s the complete opposite. But gambling isn’t all just about the money, the experience provided is also tailored toward the user. Most apps available are framed to be live and fun, casino-like. However, instead it becomes a place that holds a majority of the user data, using it against the public as they bet.

As the market for gambling has evolved and become more widespread, it’s apparent that the majority of promotional materials are targeting young men in an exploitative way. Previous markets that have been dominated by bookies are now overflowing with an abundance of alternatives. Companies providing slogans like “The world’s gone mad, trade it,” infect nearly all aspects of life, and have normalized how and where people place bets.

With prevalent and constant exposure on media platforms, including paid advocates labeling how easy and simple it is to make money on daily occurrences, it’s no surprise how many people have turned to gambling. Available resources like data analytics and AI can only enhance the betting odds: but when everything becomes a bet, we no longer only make financial bets, but also of judgment and ethics.