Will the U.S. government confirm that aliens exist this year? Want to bet on it?
Well, you can if you participate in what are known as prediction markets on apps like Kalshi or Polymarket, online platforms in which just about any proposition can be met with a wager. And you wouldnβt be alone: As of Thursday, about $11 million had been wagered on the alien question, according to my friend Dan, an experienced sports bettor.
Dan is one of millions of recreational gamblers who has moved a share of his action to the prediction market platforms, which, due to some quirks in federal law, exist with little regulation. Anyone 18 and over in any state can get an account.
Regulated books like DraftKings, FanDuel and others, on the other hand, are tightly controlled, available only to those over 21 in many states and heavily taxed. In Louisiana, they bring in about $800 million per year in tax revenue, according to in this newspaper by Aidan McCahill.
The products have raced ahead of regulation. Prediction market companies have argued that what is traded on their platforms are not bets, but are βcontractsβ or βfuturesβ similar to the bets farmers put down when they sell their crops at a certain price months before the harvest. As such, these prediction markets are regulated by the much smaller and little-known federal agency called the Commodity Futures Trading Commission, or CFTC.
This has enraged states across the country, dozens of which have sued, arguing that they are essentially gaming companies. Louisiana Attorney General Liz Murrill has joined in a number of briefs in these suits.
βThey literally will let people bet on anything you can think of. Thatβs gambling,β Murrill told McCahill.
I am not a gambler, so I enlisted Dan to help me understand how they work and why they might be attractive to gamblers.
Itβs the lack of controls, he said.
βThere are no limits. I can bet as much as I want,β he told me. βItβs just bigger and less regulated.β
Prediction markets donβt stick to sports. Anything can be on there, as long as there are two people willing to slap down some cash. Political races, weather, international events β just about anything β can be the subject of a contract. Including, for instance, whether the U.S. government will confirm the existence of extraterrestrial life.
But that also makes them dangerous for casual bettors. Some folks on international prediction platforms made hundreds of thousands of dollars betting on the ouster of Venezuelan President Nicolas Maduro and the attack on Iran.
βOn anything that there could be inside information, I assume there is,β Dan told me.
The federal government seems unlikely to weigh in on the side of states anytime soon. Donald Trump Jr. is an adviser to both Kalshi and Polymarket. Truth Social has announced a plan to launch its own prediction market.
βItβs really remarkable they've been able to offer gambling to anyone, anywhere, with no regulation,β Dan said. βYou canβt do anything about it.β
We might have better luck betting on a major alien announcement.