Online Prediction Markets: Benefits, Costs, and Regulation

Episode Details

Do online prediction markets like Kalshi and Polymarket provide a service beyond the entertainment of gambling? Prediction markets are regulated by the Commodity Futures Trading Commission, the same agency that oversees futures contracts. Is this agency well-positioned to serve this role and guard against insider trading and market manipulation? And what should policy be towards online prediction markets? Futures contracts help companies and people hedge against risks. What is the social value of guessing the designer of Taylor Swift’s wedding dress, or of guessing which countries the President will mention in a given month? Gary Gensler joins EconoFact Chats to discuss these questions.

Gary is Professor of the Practice of Global Economics and Management at the MIT Sloan School of Management. He previously served as Chair of the Securities and Exchange Commission, and of the Commodity Futures Trading Commission.