Prediction Markets Are The New Online Poker—Not Sports Betting
The ongoing prediction market boom is more like online poker in the mid-2000s than the sports betting gold rush following the famous 2018 Supreme Court ruling.
The reason has to do with the strategic, peer-to-peer component.
Like poker, most users lose over time on a prediction market platform that charges fees. However, for a minority of disciplined, emotionally resilient players, there could be money to be made.
Prediction markets get most of their volume from sports, but it’s the niche markets of pop culture, politics, economics, and more that have drawn so much attention from young bettors.
Online Poker Takes Over
I witnessed the poker boom firsthand. The student lounge at Penn State (where I studied) usually had 60-70 students playing poker every single night, with a waitlist. You’d often see a dozen screens in the student computer lab with PokerStars or Full Tilt Poker running. I know many others were playing from their dorm rooms.
According to a new WSJ report, federally regulated prediction markets are similarly booming on college campuses. They allow 18-year-olds to bet.
Somewhat ironically, prediction markets have more in common with the online poker era than with sports betting, even though these platforms take sports bets and don’t offer casino games like poker.
Cracks in Traditional Sports Betting
An alarming number of people believe that they can make money through traditional sports betting, despite one study finding that just 4% won over a five-year period.
The illusion appears to be fading. Young men who see sports betting as “bad for society” more than doubled to 47% in 2025 from 2022.
In a recent illustrative example of the traditional online betting business, FanDuel reported several NFL weeks with hold rates over 30%. FanDuel said its users lost so much money they started to quit betting. Some state regulators are taking real action against the industry practice of punishing users who beat line movements, which boosts their chances of winning.
Betting on sports through a Kalshi or a FanDuel is probably a long-term losing endeavor. However, prediction markets opened up apparent opportunities on other topics. One of Kalshi’s advertising slogans is “everyone is an expert at something.”
In the mid-2000s, many young people believed they could win money as poker experts. Some succeeded; most did not. Prediction markets could follow the same pattern.
Be Careful What You Wish For
In 2006, for the Penn State student newspaper, I wrote a profile on one bright student who dropped out of school to play poker professionally in Las Vegas. He had just won $30,000 in a PokerStars tournament from the computer lab. He felt on top of the world.
Years later, when I was a journalist at Card Player Magazine, I saw him dealing cards at the World Series of Poker instead of playing in it.
My advice for any young prediction market user is to realize that gambling is a hard way to make an easy living (or a side hustle). Don’t assume that initial success will last.
From an addiction standpoint, there is research indicating that gambling games with strategic components (i.e., online poker and prediction markets) can be riskier for your mental health. The intermittent reinforcement from a well-timed winning bet can be extraordinarily seductive.
I once tried playing poker for supplemental income. I had some success, but eventually I found myself too preoccupied with the game, to the detriment of my life. The variance was too stressful. I decided to quit about 10 years ago, and it was among the best decisions I ever made.
If you find that betting on a prediction market is dragging down your life in any way, it’s never too early to take a break or quit.
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