The prediction markets – platforms where users bet on whether events will occur – pretend to be populist, pushing the nabobs aside and representing the “wisdom of the crowd”.
asserted
events → bet → crowd
“This data is bottom-up, not elites-driven,” a Kalshi spokesperson told Reuters.
asserted
spokesperson → drive → Reuters
But in fact, the markets are controlled by a few, skillful traders.
asserted
markets → control → traders
Their users are led to believe they can strike it rich.
asserted
they → lead → it
But like gamblers everywhere, most of them lose most of the time, while enriching the casino and bankrolling the winner’s takings.
asserted
most → lose → takings
The markets pretend honesty and transparency, but they open the door to fraud and insider trading.
asserted
they → pretend → fraud
Like opinion polls, they affect voters’ expectations of the outcomes of elections but make them no smarter about whom to vote for.
Fundamentally, the assumptions projected by the prediction markets are Trumpian.
asserted
assumptions → affect → markets
The companies suggest that their results are improved by the financial stake customers have in them.
asserted
customers → suggest → them
“Prediction markets are a way to see what people are saying when there’s money on the line,” said the Kalshi spokesperson.
asserted
spokesperson → see → line
When money talks, in other words, its message is more authentic and valuable than mere political speech.
asserted
message → talk → speech
The prediction markets made a better collective call on the 2024 elections than conventional polls and pundits, particularly in the swing states.
asserted
markets → make → states
The authors of a much-cited 2025 study from Vanderbilt University infer that their results – that Polymarket was more accurate than polls – were “in alignment with research on the ‘Wisdom of Crowds’ theory, which suggests a large group of people are often accurate in predicting outcomes, even if they are not necessarily experts or closely aligned with the issue at hand”.
uncertain
they → cite → hand
But more recent analyses suggest that the betting masses are not so wise after all.
asserted
masses → suggest → ?
A new working paper from scholars at the London Business School and Yale University looked at publicly available trading data from Polymarket.
asserted
paper → work → Polymarket
Whereas almost every wagerer’s outcomes were no better than chance, they discovered, the “accuracy comes from a minority of persistently skilled traders, around 3% of accounts”.
asserted
accuracy → discover → accounts
The crowd “generates most of the volume but little of the information”.
asserted
crowd → generate → information
The crowd also furnishes most of the cash but reaps little of it.
asserted
crowd → furnish → it
Analyzing 1.6m Polymarket accounts, or “wallets”, traded since November 2022, the Wall Street Journal found: “Casual traders are bleeding cash while a small number of sophisticated pros – including trading firms with access to vast streams of data – eat their lunch.”
asserted
number → analyze → lunch
What skills do these pros employ?
asserted
pros → employ → skills
They react quickly to public and financial news, say the London and Yale authors.
asserted
authors → react → news
They gather poll data and buy access to big data streams, which can cost $200,000 annually.
asserted
which → gather → 200,000
They analyze the data using “algorithms to predict price movements and manage risk”, says the Journal, “faster than any human”.
asserted
Journal → analyze → human
Operating at scale and speed, with commensurate information and discipline, the pros can make tens of thousands of trades a day.
asserted
pros → operate → trades
And the more they trade, the more they earn.
asserted
they → trade → more
In the Journal’s analysis, three-quarters of the profits went to 0.1% of the accounts.
asserted
quarters → go → accounts
Of at least 2.3 million accounts on Polymarket’s site, just 2,000 netted a total of almost half a billion dollars.
asserted
2,000 → net → dollars
Meanwhile, the median Polymarket user placed 46 trades across 10 active trading days in 2026, according to Pew Research.
uncertain
user → place → Research
And because the few have the skills to trade against the mistakes of the many, the losses of the many bankroll the profits of the few.
asserted
losses → have → few
The traders steering the prediction markets are not PhD pollsters and PBS talking heads.
asserted
traders → steer → markets
But they are elites nonetheless – the same elites who dominate Wall Street and make economic policy, whichever party is in office.
asserted
party → dominate → office
If it were a simply a matter of some people’s money squandered or increased, the problems of the traders would remain with the traders.
asserted
problems → squander → traders
But the press and the public are listening to them more and more.
asserted
press → listen → them
“Prediction market odds shift voters’ expectations substantially,” a study funded by the Brennan Center found.
asserted
study → shift → Center
The same features that rig the markets in favor of the few can distort what we think we know about coming elections.
asserted
we → rig → elections
Explained CoinMarketCal, a newsletter serving crypto traders: “A market price reflects trades, liquidity, and available capital, not a representative poll.
asserted
price → explain → trades
A well-funded trader can move a thin contract without any change in voter sentiment.
asserted
trader → fund → sentiment
And it’s not just expectations that prediction markets influence.
asserted
markets → ’ → that
They can also change voter behavior.
asserted
They → change → behavior
“Elections have the property that what one believes is going to happen can actually affect what happens if a candidate is thought to be losing momentum or the campaign is flagging,” the Barnard College economics professor Rajiv Sethi told NPR.
asserted
professor → have → NPR
Gaming on votes is not new, and its history is thick with corruption.
asserted
history → game → corruption
…and 28 more, not listed.
The Aporia
