Comment Text:
I speak as a young American. Prediction markets, namely Kalshi and Polymarket, have been detrimental to my mental health. I have almost contemplated suicide. I wish I never discovered prediction markets.
If prediction markets were to cease to exist tomorrow, would the world be worse off? The answer would be NO. For markets like will Trump say ‘mogged’ in his next speech, what value does that bring to society, other than these prediction markets making a lot of money in fees? In an interview, the co-founder of Kalshi, Luana Lara Lopes, said the ultimate goal is to create a market on every differentiable opinion. That is the hell we are heading towards. Trump, when asked about that soldier charged with insider trading on Polymarket, said the world has become a ‘casino.’ The CFTC is giving a green-light toward all of this.
These companies don’t care who or how many people they hurt. Both of these companies have been particularly aggressive on marketing towards young people.
I first learned about Polymarket several years ago. At the time, Polymarket was banned from operating in the U.S. The CFTC seemed to have some semblance of ethics and respect for the rule of law back then. I was surprised just how easy it was to access Polymarket. I used a VPN, transferred some crypto, and made my first trade. No verification needed. Nothing.
There were social media posts and articles at the time explaining how to access Polymarket in a restricted territory. Those posts/articles have only grow since then. I’d estimate there are several hundred thousand users from restricted territories using a VPN to access the platform. The company is ABSOLUTELY aware of this, but chooses to do nothing. UMA manipulation and insider trading has also long plagued Polymarket and continues to a problem. The nature of Polymarket being a decentralized platform plus having no KYC, makes it difficult to track down one’s true identity. There are steps one can take to ensure complete anonymity.
Polymarket is based in Panama. Who is really exercising oversight over this company? It’s not the CFTC, I can tell you that!
Kalshi, for its part, positions itself as the regulatory darling of the industry. However, they are actively trying to circumvent state gambling laws and are engaged in a nasty legal battle with several states. One of the most litigious companies I’ve seen. ~90% of Kalshi’s volume comes from sports. Why should Kalshi be held to a lower standard than sportsbooks like FanDuel? Kalshi has just reinvented gambling. Nothing new here.
While Polymarket and Kalshi claim to be different, there is not much that separates these two companies. Customer support at both companies are non-existent and AI is used to respond to all inquiries. Both have issued arbitrary amendments to rules after market creation, paused markets, and resolved markets / issued refunds at its own discretion. The markets team at both of these companies have broad leeway and latitude when it comes to overseeing markets. CFTC oversight here is virtually non-existent.
I don’t expect the Trump CFTC to have better oversight over these companies. The Trump family has investments in both Polymarket and Kalshi, with Don Jr. serving as an advisor to both. Mike Selig is the most loyal defender of these companies and their go-to water boy.
***The last point I’ll make on this: I, along with countless other Kalshi users have received emails from Kalshi asking us to submit pro-prediction market comments to the CFTC. They have even created an AI tool to do so. Attached is a screen shot of an email I received from Nicolas Hull who works on the growth team at Kalshi. Also attached are some social media posts by a journalist which helps explain the situation.***
