Rapidly growing commercial betting platforms disguised as sophisticated forecasting tools are fuelling a dangerous new wave of behavioural addiction and threatening the integrity of global democracies.
According to a new Policy Forum published in the journal Science, commercial prediction markets (PMs) such as Polymarket and Kalshi are operating with alarming impunity. The authors warn that these platforms have successfully exploited legal loopholes to build highly addictive, gamified gambling ecosystems that actively manipulate media narratives and voters.
By late 2025, these unregulated markets were processing more than $2 billion in transactions every single week, with individual major events attracting hundreds of millions of dollars in wagers.
A massive, uncontrolled experiment
For decades, economists and computer scientists championed prediction markets as elegant, highly accurate tools for gathering collective intelligence. Historically, they were restricted to academic and institutional settings specifically designed to generate pure forecasts.
However, a landmark 2024 US court decision permitted event-based political contracts on commercial platforms, fundamentally altering the landscape. The ruling opened the floodgates for large-scale, gamified markets explicitly designed for mass participation and maximum profit.
“The window for precautionary action is closing: Each week of billion-dollar PM activity, integrated into core information infrastructure without oversight comparable to that of regulated gambling, prolongs a large uncontrolled experiment on users,” warned authors Nizan Geslevich Packin and Sharon Rabinovitz.
The authors stress that the danger lies in how these platforms are governed. Because they are not strictly classified as gambling, they operate without standard public health safeguards.
“This public health risk flourishes through systematic regulatory failure,” the authors wrote. “PM platforms function as ‘regulatory entrepreneurs,’ designing products to leverage legal ambiguities between gambling and financial law.”
Democratic manipulation and insider trading
Beyond the sheer financial volume, the Science paper outlines a terrifying scenario where these platforms are actively weaponised to distort political reality.
Because the platforms lack rigorous oversight, foreign actors can legally trade on the outcomes of democratic elections. Furthermore, the authors highlight the danger of “thinly traded markets,” where bad actors can place relatively small bets to artificially shift the probabilities of an event occurring. This creates a highly misleading impression of public consensus, which in turn influences media narratives, alters campaign dynamics, and manipulates voters.
Weak oversight also opens the door to rampant insider trading regarding sensitive government information. Not only does this allow individuals to profit from real-world events before they become public, but it also creates perverse financial incentives for bad actors to actively influence the outcomes themselves.
An unexamined addiction crisis
Despite the staggering economic and political risks, the most insidious threat posed by prediction markets may be to public health. The platforms are meticulously designed with gambling-like mechanics that severely risk triggering behavioural addictions in vulnerable users.
Sharon Rabinovitz highlighted that a lack of funding for addiction science is allowing these corporations to normalise their products without any real scrutiny.
“One of the most underacknowledged integrity issues in addiction science is structural: stigma and implicit moral judgment constrain funding for the very research needed to ground policy and regulation in evidence,” Rabinovitz explained. “This is especially acute for behavioural addictions, where powerful financial interests consistently outpace the science and actively shape the regulatory landscape.”
She continued: “Gambling, despite its well-documented public health impact, remains chronically under-researched relative to its regulatory urgency; trading platforms and prediction markets present an even more pressing gap, aggressively normalised yet almost entirely unexamined for addiction liability. Without greater public investment in independent research, regulation will continue to lag behind industry, repeating the mistakes of sectors that shaped the evidence base in their own favour before oversight could catch up.”
The authors said that the scientific community must immediately step up to guide the ethical boundaries of these tools and advocate for strict, evidence-based regulation before the damage becomes irreversible.
