The Prediction Market Data is in, and No One is Winning

About three months ago, I wrote to you about prediction markets and asked whether they were the Icarus of 2026, flying too close to the sun. The argument then was about the internal rot eating these markets from the inside. Insider trading on Super Bowl entertainment markets, manipulation incentives that become increasingly dangerous the more money is on the line, and what I expected to be regulators and lawmakers eventually losing patience and slamming the iron fist down. I thought the threat was external. But that might not be the case at all. In fact, it’s likely prediction markets are doomed simply because everyone’s figuring out that no one actually makes any meaningful money. The Wall Street Journal just published a forensic takedown this week looking at who actually wins on Polymarket and Kalshi. As I say, the answer is… no one. On Polymarket, less than 2,000 accounts have netted nearly half a billion dollars in profits. In percentage terms, that is 0.1% of accounts hoovering up 67% of all the winnings on the platform. Over 70% of users lose money. The typical user is down somewhere between $1 and $100, while the bottom 10% have lost an average of $4,000 each[1]. Kalshi tells a similar story. By their own spokesperson’s admission, losing users outnumber winners by 2.9 to 1. This isn’t a wealth-making market, it’s a wealth extraction station… Apple just enabled Starlink satellite support to T-Mobile iPhones. One of the biggest potential winners from global satellite coverage? Just about everything Elon touches turns to gold: · SpaceX projected IPO at $1.75T · Tesla up by over 30,000% since IPO · And now - iPhone’s get satellite access But while Wall Street focuses on Apple, Mode Mobile is quietly positioned to capitalize on this global satellite revolution. Their EarnPhone technology already: · Reaches 490M+ users worldwide · Helped those users save and earn over $1 billion · Grew revenue 32,481% And that was before global satellite coverage. With SpaceX eliminating “dead zones,” Mode’s earning technology can reach 3B+ unbanked people globally in rural populations worldwide. We’re talking about emerging markets with no infrastructure. Right now, you can still invest at $0.50/share. Over 59,000 shareholders have already claimed their shares and they’ve just secured the $MODE ticker from Nasdaq. The time to invest is now, before any potential IPO.* Tap into a $1T opportunity — invest now at just $0.50/share and get up to 20% bonus! The winners aren’t lucky punters who guessed right on the Super Bowl halftime show either. They are trading firms running algorithms that fire 60 trades a minute, paying north of $200,000 a year for live data feeds, AI coding agents, and servers. One firm of college students has reportedly turned $1,000 into seven-figure profits doing exactly that. Meanwhile, a former line cook in Detroit took out a variable-interest loan, ran $2,000 up to $41,000, then bet the lot on what a celebrity might say on TV (seriously!) He lost everything and is now living in a homeless shelter[2]. Mention markets, the kind he was punting on, are particularly grim. The WSJ looked at over 35,000 of them. Yes-trades priced at a 50% implied probability paid out only around 40% of the time. Retail traders entering at the first price they see lose roughly 11% on average. According to research from the University of Nevada, Las Vegas, that is a worse return than most Vegas slot machines. Yep, we’re at that point in the cycle where slot machines are a better bet[3]. Look, I am not anti-prediction-market. The underlying idea is genuinely useful. And I would have thought that they become useful tools for real price discovery. You know, skin-in-the-game probabilities, real-time price discovery, a way of cutting through pundit noise, useful data. Free markets being free markets, user beware. But what has been built on top of that idea has drifted a long way from wisdom of the crowd. That is not democratized finance, it is the same asymmetric extraction crypto was supposed to disrupt, its weirdly become more TradFi than TradFi itself. I thought it would be regulators as the most likely thing that takes these platforms down. But if prediction markets work exactly like a casino where the house is invisible and has even better odds of winning, then, like we’re seeing in Vegas now, people will just stop going. Once people see they’re better off at casinos, they’ll just stop using and going to Polymarket and Kalshi. Those stories of untold riches on Bitcoin’s price or what Reggie Miller is going to say during Game 5 suddenly aren’t so tempting when you know you’ll lose. Also, suddenly, the massive multi-billion dollar valuations get harder to defend. And soon enough, these platforms are getting sold off for cents on the dollar. What comes in the next six months will tell us a lot about whether they live or die. If growth flatlines, or worse, falls off a cliff, then prediction markets might be DOA. Trust in crypto, Adam Atlantic [3] https://beincrypto.com/prediction-market-polymarket-kalshi-users-losing-money-wsj/ *Disclaimer: Please read the offering circular and related risks at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A+ Offering. Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur. The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period. Tesla return calculated based on Yahoo Finance adjusted stock price data from June 29, 2010 to January 31, 2025.