Why almost everyone loses—except a few sharks—on prediction markets
A Wall Street Journal analysis found that most users of prediction markets like Kalshi and Polymarket lose money, while a small number of sophisticated traders make significant profits. On Polymarket, 67% of profits went to just 0.1% of accounts, netting nearly half a billion dollars.
Prediction markets like Kalshi and Polymarket have seen rapid growth, with total trading volume reaching $24.2 billion in April, up from $1.8 billion a year earlier. However, a Journal analysis found that casual traders are losing cash to sophisticated pros, including trading firms with access to vast data streams. On Polymarket, 67% of profits went to 0.1% of accounts, totaling nearly half a billion dollars. Kalshi's spokeswoman said there are 2.9 unprofitable users for each profitable one. Traders use big-data streams and algorithms to predict price movements and manage risk. Professional traders avoid 'mention markets,' where users wager on what a person will say during a public appearance, due to their unpredictability.
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