Prediction markets have hoovered up billions in wagers on everything from elections to military strikes, raising questions about where truth-seeking ends and gambling begins.
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Earlier this month, a military correspondent filed a routine dispatch about a missile strike in the Middle East. Nobody was hurt. He moved on to the next story.
Then, according to his published account, the threats started. Users of the prediction market Polymarket had wagered millions on that day’s events.
The journalist’s report that a missile had landed, rather than been intercepted, meant certain bettors stood to lose heavily.
As the Guardian and the Washington Post have since reported, what followed was escalating pressure to change the story: polite emails gave way to social media campaigns, then WhatsApp messages reportedly threatening his family. Polymarket itself condemned the harassment, reportedly banned involved accounts, and said it would share their information with authorities. Police are said to be investigating.
The journalist says he refused to alter his reporting.
But weighing the details of this case, I kept returning to a more basic question: what does it say about us that we have built a multi-billion dollar infrastructure to incentivise something as elementary as telling the truth?
Polymarket, valued at roughly USD 9 billion and backed by investors including a venture capital firm connected to Donald Trump Jr., styles itself as an epistemic tool: a more honest barometer of sentiment than polls or pundits.
Put money on the line, its proponents argue, and people will reveal what they really think.
The trouble is that the platform’s recent track record tells a different story. According to Snopes, six newly created accounts collectively won $1.2 million from wagers placed hours before US-led military strikes in the Middle East in late February.
A Fortune investigation documented a fresh account netting over $400,000 from bets placed just before the capture of Venezuelan President Nicolás Maduro. US senators have proposed legislation to bar government officials from these platforms.
Israeli authorities have charged individuals for using classified intelligence to place bets. Dutch regulators have ordered Polymarket’s local affiliate to halt operations.
It is worth noting that not everyone raising alarms does so from a position of disinterested concern.
Competing platforms like Kalshi stand to benefit from Polymarket’s reputational troubles.
Lawmakers proposing bans are not immune to political incentive. But the volume and consistency of the evidence is difficult to wave away.
As I’ve previously noted in this column, South Africa’s online behaviour already reveals a society deeply preoccupied with gambling.
According to the National Gambling Board, gross gambling revenue surged to R59.3 billion in the 2023/24 financial year, with betting alone growing over 50 per cent. This is hardly a country that needs further encouragement.
South Africa’s National Gambling Act of 2004 recognises only four legal modes: casinos, bingo, limited payout machines, and wagering through licensed bookmakers.
Platforms like Polymarket, accessible online without geo-blocking, don’t appear to fit neatly into any of these categories. But the question for South African regulators may not be whether new legislation is needed. It may simply be whether existing laws already apply.
If a platform allows South Africans to stake money on future events for profit, does that constitute gambling under current law? I guess if it walks like a duck…
All of which places me, someone wih a deep personal distate for gambling on moral grounds who is equally wary of restricting personal freedoms, in an awkward position.
I recently shared my scepticism about prediction markets in an online exchange. I’ve struggled, I said, to see them as anything other than sophisticated casinos dressed up as epistemic tools. It is hard not to see “the crowd” drifting into “the mob.” We know how dangerous the mob is, how easily the crowd can be manipulated—and now, how quickly the crowd can become the mob.
Someone pushed back: so you don’t think it’s the government’s job to protect society from the consequences of people’s worst impulses?
In the first, fundamental instance? No. Discernment is required so we don’t swing to either extreme: doing nothing on one end, and governments attempting to quash even the mere possibility of dysfunction on the other. Free will is an inconvenient sacred trust, one that ought not to be infringed upon carelessly in the name of watertight social peace and order.
There is something worth pausing on here.
The strongest defence of prediction markets is that they make people put money behind their convictions, and in doing so, surface truth more efficiently than traditional institutions. Think about what that concedes, though.
We have engineered an elaborate financial architecture not to create anything new, but to coax out of people something that ought to come freely: honesty. And the best case for it is that it helps markets run efficiently.
What a brittle, transactional notion of truth.
None of this means prediction markets should operate in a vacuum, nor that banning them outright is the answer.
The starting point is less dramatic than either camp might have it: apply the laws we already have, honestly and consistently, and see what remains.
Oversimplification is the enemy. We must grapple.
Andile Masuku is co-founder and executive producer at African Tech Roundup. He serves as executive editor of Future in the Humanities (FITH), powered by the SA–UK Chair in the Digital Humanities at Wits University. Connect and engage with Andile on X (@MasukuAndile) and via LinkedIn.
Andile Masuku is co-founder and executive producer at African Tech Roundup. He serves as executive editor of Future in the Humanities (FITH), powered by the SA–UK Chair in the Digital Humanities at Wits University. Connect and engage with Andile on X (@MasukuAndile) and via LinkedIn.
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