Are you convinced you know who will be cast as the new James Bond or when the next version of ChatGPT will be released? Now there’s a way to make money off your predictions.
Driving the news: More than US$600 million has been wagered this year on Polymarket, a prediction market, more than the previous three years combined. The idea is that anyone with a credit card and some tech know-how can place bets on the outcomes of real-world events.
Catch-up: Unlike traditional betting platforms, which offer fixed odds that are usually set by bookmakers, prediction markets allow people to buy and sell “shares” in the outcomes of events that pay out $1 for a correct prediction and $0 for an incorrect call.
- With enough people wagering, that buying and selling (in theory) aggregates the wisdom of the crowd and generates a probability of the likelihood of an event.
Why it matters: As these markets grow, they could create forecasts for what will happen in the real world. Guessing who will win The Bachelorette might be frivolous, but doing the same for an election could provide useful data to guide business or investment decisions.
Yes, but: Not everyone is thrilled with the idea of lots of money riding on important real-world contests. As the U.S. presidential election triggers a flood of money into such markets, some experts warn that the integrity of elections could become compromised.—TS