According to U.S. News & World reports, prediction market revenues from leading platforms Kalshi and Polymarket totaled approximately $25 billion in April. However, financial expert Burton G. Malkiel argues that index funds remain the superior investment strategy, citing data showing over 10- and 20-year periods, index investing produces higher returns than more than 90% of actively managed portfolios by professional investors. Malkiel demonstrates this through theoretical calculations showing a hypothetical investor who started with $500 in January 1978 and added $100 monthly, resulting in a final value of roughly ₹18.4 crore as of January 2026.
As reported by Wall Street Journal studies, more than 70% of 1.6 million surveyed bettors on Polymarket had lost more money than they made. According to U.S. News & World surveys, more than a quarter of prediction market gamblers were betting more than $500 monthly, with most losing money. The unfavorable betting odds are particularly evident in prediction markets where individuals guess on events like political outcomes or military actions, where even government insiders can profit significantly from inside information. Recent developments show that nearly half of content creators who earned money (48%) made less than $15,000 in 2023, while just 13% earned more than $100,000, per data from NeoReach.
According to Malkiel's analysis, the U.S. stock market has returned approximately 10% annually over the past century, with trading costs as low as a penny per share or sometimes even less. By contrast, betting profits typically go to platforms rather than participants, with even correct predictions resulting in net losses due to unfavorable odds structures. The expert notes that while stock markets operate like gambling casinos, the odds favor individual investors over time. Recent spoiler incidents demonstrate this gap, with fans who glanced at odds for Survivor 50 on prediction markets like Kalshi or Polymarket before the season began saw overwhelming odds (80%+) for a certain contestant, who ended up winning the $2 million prize.
As reported by Malkiel, a quarter of respondents in The Wall Street Journal survey said they have missed bill payments due to gambling, with others losing their life savings. The expert emphasizes that a multitude of young people today are spending $100 monthly on activities likely to produce persistent losses while the country faces a retirement crisis. He calculates that ₹8,000 lost gambling today could be worth ₹3.6 lakh 40 years from now if invested in a Roth IRA, highlighting the opportunity cost of gambling over long-term investing. The financial challenges facing content creators further illustrate this point, with creators struggling with unpredictable monthly paychecks, higher taxes due to self-employment, and constant anxiety at the prospect of their income streams drying up.
According to Malkiel's analysis, soaring gambling addiction rates represent a public-health crisis, with countless Gen-Z gamblers, mostly young men, struggling with isolation and suicidal thoughts. The expert argues that considering both the pain of loss and the enormous future income forfeited by gambling could give those addicted to betting some second thoughts, representing a more effective approach to turning losers into winners than traditional financial education. Recent data from the 2026 Axios Harris Poll 100 reputation rankings shows that Americans now trust prediction markets and similar sportsbooks or trading platforms more than some of the country's best-known companies, with Polymarket notching a higher rating (#45) than dozens of major US companies including Disney, Verizon, Ford, Target, Uber, and Bank of America.
