In the absence of football we can bet on, we can at least watch documentaries about betting on football. And so it was this past Sunday, with Netflix’s “The Prediction Games,” which I thought was a pretty good rundown of our current prediction market predicament.
There’s a lot in the doc about the history of prediction markets, their value proposition (intended or otherwise), and what’s so controversial about them. But the line that stuck with me was delivered near the end by a (now purportedly former, given his experience) Kalshi trader, Caleb Davies, whose focus and then concerns centered on “botting” of Spotify streams.
“When everything’s a market,” Davies said, “the opportunities for cheating are basically endless.”
Now, prediction market operators would probably take some issue with these sorts of statements.
Moreover, the head of Kalshi’s enforcement team suggests in the doc that there’s a higher bar here, where evidence must be gathered and presented to the authorities. They also suggested they are already doing a lot of enforcement work, with the prediction market operator said to be engaged in around 100-150 meaningful investigations each quarter, and having made “dozens” of referrals to law enforcement already.
Whether it’s the World Cup or Taylor Swift’s wedding, tens of millions are betting on the outcomes of almost anything using prediction markets.
— Netflix (@netflix) July 23, 2026
Go inside the world of this legal but controversial form of gambling in INSTADOCS: THE PREDICTION GAMES. Premiering July 26. pic.twitter.com/W7gsBl2Zd1
However, I think Davies’ quote really highlights a basic concern about prediction markets.
When you expand what people can bet on, you expand the possibility of people trying to pull some shenanigans in connection with those betting markets. In addition to Spotify bots, there have been alleged instances of these shenanigans related to military activities in Venezuela, the speeches of the president, and the weather in France, among other things.
This stuff gets headlines, and I will grant you that some of it conflates the activities of onshore and federally regulated exchanges versus offshore and not so regulated. It could also very well be that people will read ugly headlines about people being accused and arrested for these shenanigans, and that will deter them. That takes time, and it may never ultimately put a stop to people trying to pull stuff.
Here’s my point, though: Concerns about sports prediction markets are different because sports were actually somewhat prepared for prediction markets. It's just other parts of society that are waking up to what's going on.
However, when it comes to sports event contracts, it's less about whether people should be able to bet on sports at all. Americans have increasingly done so since 2018.. The real heat on sports prediction markets is more about whether they should exist in the context of state-regulated sports gambling.
The trailer for the documentary showed traders partying at a Las Vegas mansion in a state where Kalshi has recently been restricted from offering sports event contracts. And while that party was just a sliver of the doc, the trailer was enough to reportedly prompt threats of legal action.
It is somewhat fitting, then, that the doc started at the watch party in such a sensitive location. Because that is the biggest source of controversy for sports prediction markets, and because sports are the biggest business for the exchanges (a point duly made by consultant Dustin Gouker in the doc, to the tune of around 85% to 90% of PM trading volume).
“Sports have been an amazing propeller,” Kalshi CEO Tarek Mansour says in the doc, and one he suggests leads traders to trade on other subjects.
Another reason that may explain why sports have been so "amazing" is that the subject matter is much more experienced with people wagering on its product.
Leagues have been concerned about protecting the integrity of their games from betting-related shenanigans for decades. While you may be able to "bot" a music stream, you probably cannot do the same to ensure a team covers the point spread of an AFC South-laden Thursday Night Football game.
Been there, regulated that
As a result, people appear more mad about the sports business of prediction markets because it exists at all. Indeed, the biggest concern may be that it tries to float above the historical state-level regulation of gambling. This is what some believe the trading of sports-related event contracts amounts to, and whether the states have a say or if prediction markets exclusively obey federal legislation and regulation is what’s at the heart of a growing number of lawsuits.
The concerns about sports prediction markets in the documentary include this but also others that are similar to the ones we’ve heard for almost a decade about legalized sports betting. They include people betting too much and beyond their means, perhaps under the purported tutelage and urging of so-called “influencers” who claim to make big bucks and live glamorous lifestyles. That people as young as 18 are trading is another concern.
Yet state-level gambling regulators have been trying to get their arms around this stuff for a long time. Rules for advertising, responsible gambling, and also the integrity of betting markets and the sports that are wagered upon are all basically table stakes. These concerns, aren't new.
Moreover, the participants are increasingly informed about what’s happening. The athletes being bet on have now had years to learn (sometimes the hard way) how they’re expected to conduct themselves. Seminars have been given and indictments unsealed. Athletes, particularly professional ones, are expected to know a bit about the new age of gambling and prediction markets.
32% chance US & Iran reach a nuclear deal by the end of the year.https://t.co/UcEmsnqmF9
— Polymarket (@Polymarket) July 27, 2026
The rest of society, though? Well, they may not be as informed or deterred.
It’s a take I’ve been batting around in my head for some time now and one I feel this Netflix doc provides the perfect catalyst to finally get off my chest. Sports were actually somewhat prepared and equipped for the prediction market boom, given the harsh lessons and growing pains of legalized sports betting since 2018.
Other parts of society may now be getting that same crash course, and not everyone loves that, including people who may wake up one day and discover they’re in the game.
The parts of society that may intersect with prediction markets are increasing. Over the past week alone, I've seen self-certifications for "Pandemic Disease Contract," "Will {title} have a Metacritic Score that is {above/below/at least/at most/between/higher than/lower than} {value or range} {on/before/on or before} {date}?" and "Will <city> record the most snowfall during <time period> out of <cities>?"
So, did somebody read their local meteorologist the riot act yet? Because professional and (perhaps sadly) college athletes are very aware that people are wagering on what they do on the field or court. The NFL, for example, adjusted its gambling policies for players to include prediction markets prior to last season.
The league continues to discuss prediction markets with operators and the federal regulator, the Commodity Futures Trading Commission, to ensure betting markets remain tasteful and above suspicion. While the NFL isn't totally happy with what the CFTC is doing, it has at least braced its employees for what's happening.
Enjoying Covers content? Add us as a preferred source on your Google account
Truth machine learning
If prediction markets limited themselves to sports, they’d deal with leagues, governing bodies, and unions that are at least somewhat experienced. They’d still have their legal issues with state gambling regulators, but their counterparties there are also in the game, so to speak. The larger trouble, though, may be that prediction markets aspire to be much more than sports.
This history is touched on in the doc, and the theory of prediction markets is something along the lines of that the back-and-forth of buying and selling on an exchange can provide valuable information and insight on any given topic. The people trading (or "betting") on these topics have skin in the game, giving them a financial incentive to express what they genuinely believe will happen.
So, hypothetically, this gives you an alternative to public-opinion polling or other forms of measuring consumer or voter sentiment. And, as we saw with the 2024 presidential election, prediction markets were more bullish and ultimately more accurate about who would actually win.
But this means ensuring more and more people can't game the system and that more and more people who are part of the democratic or other processes aren’t trying to profit somehow off those processes.
Not all of these people may have gotten the same memo as an NFL player either. Some states have explicitly warned bureaucrats about this, but it may not be until the hammer falls that the message is finally received.
BREAKING: Odds Tesla and SpaceX merge within the next year skyrocket to 74% — a record high. pic.twitter.com/hQNQdOYmjf
— Kalshi (@Kalshi) July 25, 2026
For sports, the hammer fell years ago on guys like Jontay Porter. Nobody in the NBA is walking around right now thinking they can bet on their team’s games and completely evade notice. Or at least they shouldn't.
Prediction markets are still relatively new, and every day they self-certify contracts for trading that may somehow involve people who are not familiar with insider trading rules or the history there.
The sports world knows, though. It has been preparing for and trying to protect itself from gambling for a long time. Prediction markets are always trying to improve how they police their platforms. In sports, though, they also have independent integrity monitors and others who can help with that task.
Meanwhile, every other aspect of society that prediction markets may touch on may not be as ready, but now they might have to be, whether they like it or not.
Or, as is true of sports event contracts, until the courts or lawmakers say otherwise and officially draw the line on any given subject.
