Canada

It’s about war but not really. It’s high tech and low cunning. It’s about making money or losing money. It’s about secrecy and anonymity. It’s a profound combination of greed and moral turpitude. It seems like a deeply depressing commentary on our times.

I’m talking about so-called “prediction markets” that invite bets on global political events—wars, elections, coups, uprisings, sanctions, even assassinations. What was once largely illegal and even taboo has come roaring into the open. Prediction markets beckon “crypto natives,” a cohort trained to turn any idea into a tradable asset. Masking identities behind pseudonymous wallets, these platforms often operate beyond any real accountability or enforceable regulation.

Two firms—Polymarket and Kalshi—dominate the market. When it comes to geopolitical wagering, Polymarket is the industry leader. It was created by Shayne Coplan in 2020 under COVID-19 lockdown. Amidst the swirl of misinformation and disinformation about the pandemic, the twenty-one-year-old computer science dropout became interested in prediction markets after reading a paper on the topic by economist Robin Hanson. Coplan came to believe prediction markets could far outperform polls and punditry. A system where people had money on the line would, he thought, force more honest forecasts.

Early success for Polymarket led to early scrutiny. In 2022, Polymarket reached a settlement with the US Commodities Futures Trading Commission, who said it was running outside of CFTC compliance rules. Polymarket paid a penalty of $1.4 million (US) and agreed to block US access to its platform. Just a week after the 2024 election, the Federal Bureau of Investigation raided Coplan’s apartment, as part of an investigation into whether US users were still placing bets, despite the injunction.

After Trump took office, the investigation was closed. Prediction markets have become a Trump family business, supplanting earlier efforts in casinos. One of the Dons, Donald Trump Jr., emerged as a major investor in Polymarket through his venture capital firm 1789 Capital. Don Jr. joined the company’s advisory board. Coplan told Cooper, “We’re in this admin. This admin is very pro-innovation, and pro-crypto, and pro-Polymarket, which is amazing.”