Faculty of Social Science

Polymarket, a U.S.-based prediction-market website, is taking wagers on who will be London, Ont.’s next mayor. There are also markets for Toronto, Windsor and even Stratford. The past two years have seen commercial prediction markets move from a niche forecasting tool into mainstream finance, allowing users to buy and sell contracts tied to the outcomes of real-world events ranging from elections to economic indicators. A 2024 U.S. federal court ruling allowing regulated prediction markets to offer contracts on political outcomes helped accelerate the growth of platforms such as Kalshi and Polymarket. As these markets become more visible and their election forecasts reach wider audiences, questions are emerging about what their growth could mean for public health and democratic life.  

Legalized gambling and public health

Because prediction markets package real-time wagering in the language of trading rather than betting, researchers have argued that they function as an emerging and largely unregulated form of gambling. Their structural features – rapid feedback, round-the-clock access and engagement-optimized design – may carry the same addiction and financial-harm risks long associated with sports betting and other high-frequency wagering products. A well-established body of addiction research on legalized gambling raises public health concerns as online gambling becomes easier to access across digital technologies. Similar concerns have emerged following the expansion of online sports gambling. Since the 2018 U.S. Supreme Court decision allowing states to legalize sports betting, studies have documented a rise in gambling-related harms, including increases in internet searches and helpline calls for gambling addiction. Canada followed by legalizing online sports gambling in 2021. Research has found gambling companies can disproportionately affect young people and individuals with addictive personalities, who are at greater risk of gambling addiction and the antisocial behaviours associated with it. Furthermore, public health reviews have linked commercial gambling expansion to worsening mental health outcomes, including depression, anxiety, substance use and self-harm. These links predate the current prediction-market boom but reflect some of the same underlying mechanisms as online sports betting. Research consistently frames gambling harms as shaped by individual behaviour, expanding access, low-friction digital platforms and industry designs aimed at continuous engagement.  

A potential new threat to democracy

Beyond participation in these markets, prediction markets are becoming part of the information voters may access when making voting choices, alongside traditional avenues such as news coverage, campaign events, candidate debates and polls. They are a source of new information that voters have not previously had in this form, offering continuously changing odds that can appear to provide a real-time assessment of an election. In their earlier years, prediction markets were often accurate at forecasting election outcomes. However, research supporting their accuracy was conducted when these markets were relatively niche, attracting people who were highly engaged with specific electoral contests. Today’s platforms operate on a much larger scale, are hosted on widely used financial platforms and may reach participants with less political knowledge or expertise. Nonetheless, their purported forecasting ability is part of what gives prediction markets their appeal, but it also raises questions about how they are interpreted. Prices can be swayed by individual traders with large stakes or insider information, and prediction markets lack some of the transparency associated with election polls. In Canada, companies are not currently permitted to offer political prediction markets domestically, but Canadians can still encounter markets operated in other countries. This means prediction markets are becoming part of Canadians’ political information environment, even when Canadians are not participating directly in those markets. We do not yet know how much these odds influence voters, or whether exposure to them changes how people understand an election. As prediction markets become more prominent, those questions will become harder to ignore.  

What can be done?

Like debates over AI governance and misinformation regulation, attitudes toward online gambling and prediction markets ultimately turn on how societies navigate the trade-off between market freedom and protective regulation. Understanding these attitudes therefore offers a case study in public reasoning about emerging technology governance more broadly, not just a narrow inquiry into gambling policy. It is not yet clear whether the public supports broad access to online gambling technologies or regulatory restrictions on different types of prediction markets, including political, financial or sports markets. There are also various regulatory approaches, including stake or wager limits, online identification requirements and advertising rules. Prediction market companies have strong incentives to expand access to jurisdictions like Canada, but that carries public health risks based on existing research. Given the consistent public health concerns surrounding digital gambling platforms, and growing discussions about how prediction markets may affect democracy, public opinion on their legalization and regulation remains understudied. It will be important to start by getting a clearer picture of what people think about these digital technologies and how they use them. Prediction markets are arriving in politics before we know how people feel about them. The odds may start speaking before the public does. Noah Eliot Vanderhoeven, PhD, Political Science, Western University This article is republished from The Conversation under a Creative Commons license. Read the original article. Expert Insight reflects the perspective and scholarly interest of Western faculty members and is not an articulation of official university policy on issues being addressed.