The investigation uncovered key issues in the prediction markets of Polymarket and Kalshi.

Forecast accuracy: On U.S. elections, bets on Polymarket were correct 67% of the time, on Kalshi—78%. For comparison, the older platform PredictIt achieved 93%.

Insider trading: The report notes frequent leaks of confidential information regarding political and governmental events, rendering bets unfair.

Capital concentration: Approximately 70% of all profits are earned by just 0.04% of traders. New users lose more here than at traditional bookmakers.

Gambling bias: Up to 90% of Kalshi’s trading volume and about 40% of Polymarket’s volume are tied to sporting events.

Regulatory loopholes: Federal oversight via the CFTC allows platforms to bypass state taxes and avoid compliance with gambling protection requirements—this has already led to lawsuits from local authorities.

Conclusion: Questions regarding the fairness, profit distribution, and regulation of prediction markets remain unresolved.

#POLYMARKET #KALSHI