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Summary
Prediction markets on platforms like Polymarket and Kalshi are witnessing a boom, with wagers being made on outcomes of war, elections, sports and more. Their appeal is undeniable—even as questions swirl over regulation and insider information.
"Khamenei Out.” That was the title of an event wager on the prediction market Kalshi. On the website of its rival, Polymarket, wagers were being made on “the timing of the Iran war” just before it began.
Posts by Bubblemaps, a blockchain analytics tool, on X indicate that six accounts collectively pocketed $1.2 million in profit from Polymarket bets. These bets were funded in the hours immediately before Saturday’s action began.
After Israel and the US began combat operations against Iran on 28 February morning by Iran time, newer wagers began showing up. “Iran regime fall by?” “New Iranian regime in by?” “Next Supreme Leader of Iran?” “Reza Pahlavi return by?” These were the titles of some of the more popular wagers on the site.
Each of the bets has a probability associated with it. As a predictor, you must either bet for or against that outcome. For instance, 28% believe that the price of oil will reach $100 and 45% believe that it will cross $90 by 31 March (the exact details of the oil futures contract are specified in the wager).
There are, of course, related wagers such as “who will be the 2028 Republican nominee for President”? Interestingly, since the war in Iran began, US Vice President J.D. Vance’s probability remains unchanged at about 42%. This translates to 21:29 odds of Vance making it as the party’s nominee. On the same bet, Ron De Santis and incumbent President Donald Trump are tied at 2.5%.
Polymarket and Kalshi are America’s two big prediction markets. Kalshi is the original federally regulated US exchange, offering event contracts across politics, economics, sports and more. The US Commodity Futures Trading Commission (CFTC) regulates it.
Polymarket is a much newer blockchain-based platform, native to Web 3, that boasts significant liquidity and global access. Newer entrants like Railbird Exchange (CFTC regulated) and Novig (sports first) are expanding the marketplace with focused services.
Kalshi supports all normal methods of cash transfer as well as crypto wallets. Polymarket is restricted to certain types of cryptocurrencies like Ethereum, Bitcoin and Solana. They are all converted to USDC.e, which is a form of stablecoin with a bridge to Circle’s stablecoin USDC.
Apart from their payment protocols, regulated prediction markets like Kalshi and Railbird differ from Polymarket in their approach to ‘insiders.’ “Having an edge to the market is a good thing,” Polymarket CEO Shayne Coplan said in response to questions about inside information on the platform. Coplan said the company has focused on the ethics of insider transactions, before adding that it was “sort of an inevitability that this will happen, and there’s a lot of benefits from it.”
The acceptance of ‘inside information’ is a double-edged sword, and my personal wager (maybe I can put it up on the site) is that it will not withstand regulatory scrutiny.
Another way that Polymarket is different is that it does not charge a commission fee (yet). It has recently begun to charge a fee for some high frequency bets. Kalshi and others regularly charge a ‘house fee’ for wagers.
A recent academic analysis, using a metric called the Brier Score, found that ‘superforecasters’ outperformed Polymarket prices, but a blend of the two was more accurate than either alone. As defined by Philip Tetlock in a book with the same name, superforecasters are individuals who possess an extraordinary, statistically validated ability to predict future events with greater accuracy than domain experts or analysts.
Because Polymarket was born to function without CFTC regulation and uses blockchain technology with crypto wallets, it attracts a lot of global attention and wagering.
For instance, 71% of those betting on the question believe that India’s Congress Party will win Kerala’s assembly poll. Surprising in relative terms, only 68% believe that the Dravida Munnetra Kazhagam (DMK) will win state elections in Tamil Nadu. The chance of victory for matinee idol Vijay’s new party TVK is only 16%, according to wagers on Polymarket.
To be fair, only a modest amount of money has been wagered on these bets (less than $100,000). Neither of these legislative elections has yet been scheduled by the Election Commission of India.
Recently, Polymarket has bought a licensed American firm to allow it to operate within the US.
Beyond elections, sports is a major category for such betting. For the Indian Premier League (IPL) in 2026, 16% believe that the Mumbai Indians will win, with 12% betting on many of the other IPL teams. In a multi-team context, 16% is quite high but not extraordinary. Spain enjoys similar odds in the FIFA World Cup to be held this summer in North America.
Will prediction markets come to India? Should they be permitted? If they can be addictive, must they be disallowed? We do know that India has a lot of ‘events’ that people could bet on. You could bet on everything from the sighting of the Eid moon to whether Royal Challengers Bengaluru will be permanently barred from using Chinnaswamy stadium.
We also know that 95% of the retail volume on Indian stock exchanges are for ‘day trading’ purposes, revealing a preference for wagering. And so, given a large number of events and a visible predilection for wagers, should we not legalize and regulate it? Shall we bet on that?
P.S: “Those who have knowledge don’t predict. Those who predict don’t have knowledge,” said the enigmatic Lao Tzu.
The author is chairman, InKlude Labs. Read Narayan’s Mint columns at www.livemint.com/avisiblehand.
English (US) ·