Prediction markets: From academic ideal to gambling reality
By
Allison Morrow
Summary
The article examines the history and evolution of prediction markets, tracing their origins from academic economists in the late 1980s who believed free markets could improve forecasting, to modern platforms like Kalshi and Polymarket. It contrasts the theoretical ideals of prediction markets—aggregating information, improving decision-making—with the messy reality of today's platforms, which often resemble gambling and speculative betting rather than serious forecasting tools. The piece explores the regulatory battles, the shift from academic curiosity to commercial enterprise, and questions whether the original vision of prediction markets has been realized or corrupted.
Source
bskyPrediction markets: From academic ideal to gambling realitycnn.comKey quotes
· 3 pulledLong before the founders of Kalshi and Polymarket were even born, a handful of economists were getting amped about a novel approach to dealing with one of humanity's more egregious shortcomings: We're bad at predicting the future.
Maybe, the thinking went, the free market could help. (This was the late '80s, after all, the heyday of Reaganomics, Alex P. Keaton, the twilight of the Soviet Union — what couldn't capitalism fix?)
The reality is not what they'd hoped for.
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