Prediction markets are booming, with users betting on everything from elections and sports to the number of measles cases this year.
Platforms like Kalshi and Polymarket let users wager on real-world events — from award shows and gas prices to weather patterns in cities across the globe.
For some users, it's entertainment. For others, it's a potential source of income.
Borrowing money to bet
A new survey from BadCredit.org found that 53% of users started using prediction markets as a way to earn extra income or because they were struggling financially. But most bettors, 79%, report that they have lost money in the past year.
Consumer finance expert Erica Sandberg said the biggest red flag is borrowing money to keep betting. More than half of traders surveyed report using credit cards, personal loans, or other borrowed money to fund bets.
"You put yourself in a far worse position than you were before if you do lose the money — and the odds are you will," Sandberg said.
She points out that prediction-market platforms, which blend elements of sports betting and financial trading, are hard to walk away from by design.
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"These are simple to set up. You can bet in small increments. You can bet in large increments; you can see how well you're doing, and you can see how other people are placing their bets," Sandberg said. "It really sucks you in."
Sandberg said there's nothing wrong with using prediction markets for fun — as long as users set limits.
"This is my play money for the week or my play money for the month," Sandberg said. "It is going to be up to you to self-moderate. That’s something that you are responsible for."
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But treating the markets as a reliable revenue stream carries serious risk. Sandberg emphasized that prediction markets are entertainment, not a job.
"Treat it as income and you're going to be in a problematic situation really fast," she said.
Prediction markets are currently regulated as financial exchanges at the federal level. But 44 states argue they're really a form of gambling and should follow state gaming laws and tax rules. The issue could ultimately end up before the Supreme Court.
