When Penn fell to the University of Illinois in its first March Madness appearance since 2018, Sidechat was rife with students voicing their disappointment. But amidst disgruntled comments about missed rebounds and poor game strategy were remarks about money lost or earned on Kalshi, a prediction market that allows users to “bet on everything.” Several students report using the platform to bet money on the game, as more and more educated young Americans try their luck at winning quick money online.
Prediction markets are predominantly known for these kinds of wagers, as users put money down on the odds of Trump praising Allah for the third time or on whether Jesus Christ will return to Earth before 2027. However, beyond a place to gamble on ludicrous events, these platforms have been increasingly leveraged as financial tools. For some Penn students, betting on Kalshi isn’t just a way of potentially making money off of SNL performances—instead, it’s something more akin to strategically using the stock market.
For Advaith Satish (E ’28), prediction markets present an opportunity to apply his financial savvy and technical skills. In his role as a Quant Intern at Astera Holdings, Advaith helped develop arbitrage models which could be used to maximize profits on prediction markets like Kalshi and Polymarket. “What arbitrage is, is you consider a market on Kalshi,” Advaith explains. “You consider that same market on Polymarket, and if they’re priced differently, then you can take opposite sides of that trade and then generate guaranteed profit.”
Prediction markets allow users to buy and sell “shares” of predictions on future events, similar to the way stock traders can buy “futures” contracts whose price is premised on the value of specific stocks or commodities at a later date. The legitimacy of prediction markets as a new frontier of the finance world has been upheld by major institutions; from JP Morgan to Goldman Sachs, several key financial players have expressed interest in eventually offering platforms that resemble prediction markets. Meanwhile, quantitative finance firms are now hiring designated prediction market traders to design models that trade on sports and politics–related events.
At Penn, prediction market betting is starting to carve out a unique space for itself. According to Dan Romer, a professor at Penn’s Annenberg Public Policy Center, the University’s heavy finance culture makes it a prime place for prediction markets to gain popularity.
“The world of finance is basically a world of prediction, like, is the stock going to go up? What’s my best investment? Those are all predictions; those are sort of like formal prediction markets,” Romer explains. “It wouldn’t be a surprise to me that someone who's interested in finance and marketing would then find these kinds of prediction gambling opportunities attractive.”
Deven Hagen (C '29), who trades on both Polymarket and Kalshi, certainly does. “I think definitely the fact that the school has a lot of kids interested in finance, and prediction markets are always finance–adjacent, would drum up interest,” Deven says. “I mean, at Penn, there’s probably a lot of kids who have tried trading on the stock market, and so that obviously contributes to it.”
Deven, whose LinkedIn profile describes him as a trader at Prediction Markets, says that he was initially drawn to the platforms because of how they appear profitable in ways that traditional betting is not. According to Deven, prediction markets have “a decreased house edge”—a lack of the systematic advantage that sportsbooks or casinos often have over players—which makes them more advantageous to users.
Given their potential for profit, Deven believes that prediction markets hold a lot of opportunities for Penn students interested in finance and trading. He expects to see “a number of clubs pop up in the next few years relating to prediction markets—at least one, probably.”
While the acceleration of prediction market betting on college campuses seems novel, this trend is reflected broadly on online gambling sites. According to a 2013 University of Buffalo study, one out of every ten college students is a pathological gambler. A NCAA study conducted ten years later, meanwhile, found that 16% of surveyed students exhibited at least one risky behavior associated with problem gambling. This phenomenon has been fueled by the rising prevalence of online betting platforms, which capitalize off of the immediate accessibility that mobile gambling provides.
“I think it’s definitely shifting,” Henry Montano (C ’26) says. “You have to go to the casino or some designated spot from the same gambling sites where you pay in cash, you get a ticket, and then you watch the game, and then you redeem it there. But there’s no reason for me or for really anyone to do that, since you can just press a button online, open your phone, and it’s a lot simpler.”
Digital gambling fits cleanly into an attention economy already built around dopamine hits and constant stimulation, and one engine fueling its popularity is the marketing behind the platforms. As soon as Henry turned 21, he was met with a barrage of advertisements encouraging him to experiment with online betting. A University of Mississippi study found that a third of surveyed college students saw sports betting ads on a daily basis.
“I watch a lot of sports, mainly basketball and football. And every single time I watch a game, just in the corner there’s some sort of sports betting ad, or ‘This is today’s favorites for sports betting.’ And it’s kind of crazy just how frequently you see something like that,” Henry says.
These attempts to garner a younger audience go beyond digital advertising. Michigan State University and Louisiana State University have been “Caesarized,” striking multimillion–dollar deals with the gambling site Caesars Sportsbook. A proposed $8.4 million deal between MSU and Caesars would have given the online betting company the right to promote gambling at the college. In 2021, LSU signed a similar deal with Caesars, resulting in students of the school receiving official university emails encouraging them to “place your first bet (and earn your first bonus).” Although both deals ended early, partnerships such as these reflect the ways digital gambling sites leverage strategic partnerships and marketing to appeal to younger users.
Henry believes that young users are particularly susceptible to online gambling because of the way the sites target their egos, taking to social media to promise to reward the “best” participants with large jackpots of money. “It’s interesting, the way they do ads on Instagram for gambling sites,” Henry says. “For a lot of online gambling sites that are live casinos, you would expect them to show somebody hitting a jackpot, but what they really do is they show somebody losing or playing the game wrong. So then your ego kicks in. It makes you think, ‘Oh, well, if I would have played, I would have played it right, so I actually would have won.’”
As sports gambling gains popularity on college campuses, experts say that young, educated men have seen the greatest hike in participation. A similar trend holds true for prediction markets. As major actors in high finance express interest in the platforms, they legitimize them in a way that likely adds to the number of wealthy, educated individuals placing bets.
In the age of prediction markets, betting is no longer just a fun pastime or even a maladaptive addiction; rather, it’s an activity which shapes systems far beyond roulette tables. As prediction platforms continue to expand, they’ve gained an institutional validity which allows them to influence actors across political, economic, and social channels.
The rising popularity of prediction markets has led to scrutiny due to their loose regulation. For example, a March 24 White House memo forewarned staff that using nonpublic government information to inside trade on prediction markets is considered a criminal offense which violates federal ethics regulations. Additionally, bets related to geopolitical issues and government action were described as a “security risk” by Sen. Elissa Slotkin (D–Mich.). Slotkin is the lead Democratic sponsor of legislation which would ban public officials from using prediction markets to place bets using nonpublic information. She isn’t the only one with this concern, with several other lawmakers calling for legislation which would restrict prediction market use that could result in leaks of sensitive government information.
These concerns have reached a fever pitch as a result of recent trades linked to the Iran war and conflicts in Venezuela. Through Polymarket, over a hundred users made over $10,000 each by correctly predicting the day when President Trump would begin the United States’ attack on Iran. Another power user made almost $1 million on various bets related to the Iran war. Allegations of insider trading are hardly speculative—in February, multiple IDF reservists were arrested and prosecuted for using classified information to bet on whether and when Israeli military operations would occur.
Wagers placed on violent political events have sparked moral disagreement about the scope of outcomes that prediction markets should be able to cover. After users received millions of dollars in expected winnings from predicting the fall of former Iranian supreme leader Ali Khamenei, Kalshi refused their payouts, saying it prohibited wagers involving death. This resulted in the company facing lawsuits in federal court in California by bettors who claimed that the company did not clearly disclose the policy. Despite this, Elisabeth Diana, the company’s communications chief, stated that Kalshi would not allow “profiting from death.” Meanwhile, Polymarket does not hold the same scruples—they have no such policy in place for bettors outside of the US, offering a loophole for Americans who access the overseas site through VPNs.
Deven highlights the unique regulatory status that prediction markets occupy, which allows them to avoid some of the stringent restrictions that apply to stock markets. “I really think that there should be a new contract administration that prediction markets fall under,” Deven says.
Insider trading on prediction markets isn’t just a regulatory issue—it’s a symptom of a wider trend in which prediction markets are shaping politics itself. President Trump, who has ties to the prediction market industry, has been accused of leveraging his power to time actions and announcements in ways meant to manipulate financial markets. Donald Trump Jr. currently serves as an advisor to both Kalshi and Polymarket—his family’s social media company, meanwhile, has announced plans to launch a prediction market service of its own.
Political journalism has also been influenced by the recent onslaught of political gambling. Journalist Emanuel Fabian reported getting death threats from Polymarket users after writing an article which described an Iranian missile strike on Israel. The center of the threats: a $23 million wager on whether or not Iran would strike Israel on March 10. The traders hounding Fabian had bet that Israel would not be subjected to a direct strike, and tried to coerce him into changing his article to let their bets hit.
This isn’t the only way that prediction markets are influencing journalism. Fox Corp. recently announced it would partner with Kalshi to integrate its prediction market data across its cable networks. The media giant joins CNBC and CNN, which made similar agreements with Kalshi last year. In a press release, Kalshi CEO Tarek Mansour explained that “More people are watching Kalshi’s forecasts than trading them, which says a lot. Our data effectively complements news and polls … As misinformation grows more common, Kalshi offers accurate, unbiased data to help people better understand what’s going on in the world.”
This development highlights another function of prediction markets—their role as a vehicle for real–time news delivery. “I think there’s goods and bads, pros and cons, but I think a big pro for college students that are involved in politics and tech and all that tech news is the information aspect,” Advaith says.
Because prediction markets aggregate the expectations of all participants, companies such as Polymarket argue that their prices reflect probabilities which are free from biases, making them more accurate vectors of information than traditional news outlets. “The collective wisdom of diverse participants, each motivated by the potential for profit, leads to highly reliable forecasts,” the Polymarket site states.
Advaith, for example, has used prediction markets to gain insight into economic fluctuations and financial news. “I’ll often check what’s going on with the IPO news. So will X company IPO in 2026 or 2027?” Advaith says. “That kind of information is very, very useful, I would say, especially for college students.”
Polymarket calls its platform a “truth machine,” but critics say that this language is simply a way to justify the expansion of underage gambling—prediction markets are open to anyone 18 or older, whereas traditional gambling sites require users to be 21. These use–cases, of course, aren’t entirely separate—while Advaith uses prediction markets as sources of information, he has also used them to bet on who the SuperBowl halftime show performer would be. He says that the craziest thing he has seen anyone bet on was very specific: whether Donald Trump would say the word “purple” during an upcoming speech. “It opens up a new avenue of information and a new avenue of gambling,” Advaith says.
While Penn students have picked up on prediction markets as novel financial tools, they’re also using them exactly as these platforms intend. Henry describes running into someone at a party who had gone broke trying to “predict” the results of the 2024 election—“he apparently bet his whole bank account on Kamala winning,” Henry says, “and he lost.” Whether they are marketed as financial products, fortune tellers, or university–sanctioned parts of campus life, avenues for online betting are increasing. As their prominence grows unchecked, prediction markets are turning everything into a gamble—and the stakes are only getting higher.
