Prediction Market Losses Rise Among Borrowers
A new U.S. survey conducted by BadCredit.org found that 79% of prediction-market users lost money over the past year, while 51% used borrowed funds to place bets. The online survey covered 1,000 U.S. adults and found that 15% had used a platform such as Kalshi, Polymarket, or PredictIt.
Among self-reported users, 79% said they had lost money in prediction markets during the past year. More than one-quarter (27%) reported losses above $500, including 9% who lost more than $1,000. Only 21% said they had not lost money during the period.
Borrowing Amplifies Losses
Losses were more common among people who financed positions with debt. The study showed that 51% of users had funded bets through a credit card, personal loan, or another form of borrowing. Of that group, 88% reported losing money, compared with 69% of users who did not borrow.
Consumer finance expert Erica Sandberg warned that debt adds repayment costs to an already uncertain outcome. Borrowers may owe interest after losing the original amount, increasing the total cost beyond the contract’s value. “Although tempting, borrowing money to place a bet is a universally bad idea,” Sandberg said.
Sandberg noted that credit cards and personal loans are meant to finance purchases that borrowers can repay, rather than speculative contracts whose value depends on the result of a future event. She advised participants to use only cash they can afford to lose without affecting bills or creating debt.
The study measured whether respondents experienced losses during the previous year, but it did not publish platform-level account records or calculate net returns from verified transaction histories. Its results therefore represent participants’ own reports rather than audited trading data.
Income Needs Are Drawing Users to Prediction Markets
Financial motives outranked entertainment when respondents explained why they began using prediction markets. The survey found that 44% wanted to earn extra income, while another 9% were struggling financially and needed an additional source of money. Combined, 53% entered for an income-related reason.
- Entertainment or curiosity: 27%
- Social-media content: 10%
- Recommendations from friends or relatives: 7%
- Conventional investing felt inaccessible: 3%
Across all surveyed adults, 30% believed prediction markets could realistically improve their financial situation. Men expressed that belief more often than women, at 37% versus 25%. Usage also showed a gender difference: 24% of men had tried a prediction-market platform, compared with 9% of women. BadCredit.org did not provide account-level data to determine whether bet sizes, contract choices, or returns differed by gender.
The income findings come as prediction markets offer contracts tied to elections, economic releases, cryptocurrency prices, sports, and other events. Participants generally buy contracts priced between $0 and $1, with the value moving according to the market’s estimated probability before settlement.
Profits Are Concentrated Among a Few Accounts
Separate transaction research has found that profits can be concentrated among a small number of accounts. In April, crypto.news reported on 1.72 million Polymarket accounts and about $13.76 billion in volume from 2023 through 2025.
Researchers from London Business School and Yale classified 3.14% of the accounts as skilled winners. Skilled traders and market makers, who together represented less than 3.5% of accounts, captured more than 30% of gains, while 67% of accounts categorized as unlucky or unskilled losers absorbed the platform’s total losses.
Prediction Market Volume Has Reached Record Levels
Consumer losses have drawn attention during a sharp rise in platform activity. Kalshi, Polymarket, and Polymarket US generated a combined $50.59 billion in July trading volume, according to data published on Aug. 3.
- The monthly total increased 7.8% from a revised $46.95 billion in June.
- Kalshi accounted for $37.7 billion, or about 74.5% of the combined figure.
- Polymarket US grew 54% to $5 billion.
- Polymarket’s international venue recorded $7.9 billion, down 26% from June.
- Combined activity across its U.S. and international operations reached $12.9 billion.
The figures represent taker notional volume, not customer deposits, platform revenue, or trader losses. Because one contract can change hands several times before settlement, the same capital may contribute to volume repeatedly.
World Cup contracts supplied a large share of summer activity. Chainalysis estimated that about 400,000 wallets generated $5.7 billion during the five-week tournament and that World Cup markets accounted for roughly 63% of prediction-market activity over that period.
Open interest across Kalshi and the two Polymarket venues fell from around $2 billion near the start of July to about $1.2 billion by month-end as tournament positions closed or settled. The decline occurred even as monthly turnover reached a record.
US Regulators Are Examining Customer Protection
Prediction markets in the United States sit between federal derivatives oversight and state gambling rules. Kalshi operates as a Commodity Futures Trading Commission-designated contract market, while QCX, which operates Polymarket US, also appears on the CFTC’s list of designated markets.
Federal registration has not ended disputes over sports contracts. Several states maintain that products tied to games resemble conventional wagers and require local gambling licenses, while the platforms argue that the Commodity Exchange Act places their event contracts under federal supervision.
In July, the U.S. House Agriculture Committee scheduled a hearing focused on customer protection and market integrity as gaming groups pressed Congress to restrict sports-based contracts. Representatives of the American Gaming Association and Indian Gaming Association argued that some prediction products perform the same economic function as sports bets.
CFTC officials have also told regulated platforms to avoid presenting contracts through American-style gambling odds, which use formats such as +150 or -200. The agency reminded operators that event contracts remain subject to derivatives laws and that marketing, listings, and solicitations cannot use deceptive practices.
State litigation continues alongside federal scrutiny. Courts in different jurisdictions have reached conflicting early decisions on whether commodities law prevents states from applying gambling rules, leaving access and product availability dependent partly on where a user lives.
Survey Methodology and Limitations
BadCredit.org conducted its survey through an online panel and used raw, unweighted responses. Questions about borrowing, losses, and motivations went only to respondents who said they had used a prediction market. The organization calculated a margin of error of about ±3.1 percentage points for the full sample and approximately ±8 percentage points for findings drawn from the user subgroup.
