The use of Kalshi and Polymarket, which enable users to bet on almost anything, has become widespread among young adults, with 40% of young men using these platforms. The accessibility of these platforms, as well as their promise of immediate profit, has caused their popularity to skyrocket. While many see these applications as simple entertainment or side hustles, there are major ethical and safety concerns to address.
First, there is the unintended gamification and monetization of nearly every aspect of everyday life. Sports and economics have always lent themselves well to competitive predictions, but now even entertainment has become part of these betting systems.
Although betting on reality TV may initially seem harmless, it’s hard to deny that something is lost when media created purely to entertain is turned into a method of profit.
“Fandoms that had been obsession for obsession’s sake, because people like the things, (are now) turned into a money-making opportunity that squeezes out the appreciation of the thing,” philosophy professor Daniel Drucker said.
This issue of gamification is magnified when crises are the focus of bets. The ethical precedent set by betting on events — like natural disasters — that can shape or even end people’s lives is worrying. While some may argue that bets have no impact on the events themselves, the greater emotional consequence can easily be overlooked.
“If you’re a consequentialist, you’re probably going to say no … there are not going to be any negative consequences,” Drucker said. “The only negative consequences would probably be your character. So one worry that you might have is, ‘Oh, if I start betting on horrible things happening, that’s going to desensitize me to bad things happening and might even make me want bad things to happen.’”
If society begins to see tragedies in the same light as sports, we run the risk of gamifying real issues that require serious attention.
Desensitization creates the potential for much more serious consequences. Recently, there has been a concern over a possible rise in arson due to wagers on forest fires, with individuals potentially burning land in order to win their bets. Issues like this highlight the dangerous behavior that the gamification of serious events can encourage.
Based on these concerns, it’s understandable to dismiss predictive markets entirely as large-scale gambling platforms that only serve to create societal dysfunction. However, there is a more utilitarian alternative for using predictive markets.
When predictive markets are viewed as an opportunity for individuals to use their expertise to predict the most likely outcome of a situation, they seem much more helpful.
“A lot of the marketing for these companies (states that) it is useful to have experts put their money where their mouth is,” Drucker said.
For some predictive market users, predictions are shaped through expertise and mathematical modeling rather than instinct.
“I kind of copied other people or I consulted other people about it, (for) some of it, I built a quantitative model myself, so it’s a very varied experience,” said economics junior Eric Zhu, who has actively been using predictive market apps for the past two years.
Some predictive market users, like Zhu, decline the label “gambling” and continue to proclaim the accuracy of these platforms.
“People think that when you’re betting on something, it’s a bunch of people sitting around in a corner yelling at each other … that’s not what betting is in the modern age on prediction markets,” Zhu said. “It’s a bunch of nerds who have studied and read about random stuff all their life, just googling a bunch of stuff and gathering information and trying to get the most accurate forecasts possible.”
This perspective gives much more legitimacy to these platforms and distinguishes them from traditional gambling. However, Zhu himself admits the majority of users don’t bet with a lot of precision.
“I think that most people on Kalshi and Polymarket are gambling,” Zhu said. “I wouldn’t recommend it for most people.”
Thus, the most practical advice users can take is to be honest with themselves. We would all like to think that we have a unique expertise that will give an edge over competitors. The addictive risk of gambling is well established, but individuals can at least reflect on the larger implications of their bets. Considering the financial and ethical implications of betting on certain topics enables users to bet cautiously. If users commit heavily to their bets under the belief that they are acting with expertise, they become victims of the gamification mentality that has caused so many concerns. The essential question is whether users are making a logical prediction or simply guessing for the love of the game.
Stark is a chemical engineering sophomore from Orange County, California
