Computer screen with stocks and symbols, and a bullseye target with arrow by merhanhaval22 via Pixabay.
Ann Skeet is senior director of leadership ethics at the Markkula Center for Applied Ethics, Santa Clara University. Views are her own.
Popular media has had plenty to say about the ethics of prediction markets. Concerns have been raised about public health and gambling addictions; conflicts of interest with media companies; whether the markets should be regulated as sports gambling at the state level or event contracts at the federal level; the role of Donald Trump, Jr. as an investor in Polymarket and a paid advisor to Kalshi; and the palpable risks of insider trading and market manipulation.
Some have argued that inside information is, in fact, a key ingredient of the value of prediction markets, which serve, according to those making this argument, as critical aggregators of information disparately held. Polymarket has advanced the idea that a compilation of such insider information serves as a public good that will enable the masses to get information more quickly. And Professor Robin Hanson, a pioneer in prediction markets believes they consistently outperform expert forecasts and committees. He developed the concept of “idea futures,” markets designed not just for elections but scientific and policy questions as a means for improving information flow in society.
Hanson was a supporter of efforts by of the United States Defense Advanced Research Projects Agency (DARPA) to develop a Policy Analysis Market, part of the FutureMAP project (Futures Markets Applied to Prediction) first launched in May 2001. The market was originally created to allow the trading of futures contracts based on possible political developments in the Middle East. It would have allowed investors to bet, amongst other things, on specific events like terrorist attacks or assassinations.
In an article titled, “Using Prediction Markets to Enhance U.S. Intelligence Capabilities,” appearing in a journal published by the CIA, the program was supported as an experiment for seeing whether market-generated predictions could improve upon conventional approaches to forecasting. The author argued that prediction markets could “substantially contribute” to the U.S. Intelligence community’s intelligence work and cited several studies that upheld the belief that markets can perform intelligence and policy analysis functions, beliefs that echo Polymarket’s claims that such markets serve a public good.
But the FutureMAP program lost the key support of congressional leaders from both parties. In the congressional record from 2003, exchanges between senators reveal that, at the time, these leaders were aghast to learn that the Department of Defense had created some sort of “investment speculation in the possibility of assassination and terrorism.” One senator asks, “…would it not stand to reason that once this investment is made and the market moved in the direction of assassinating a given leader, indeed, that would be the ultimate outcome?” The senators’ discussion moved on to the reality that if these kinds of occurrences in the Middle East can be bet on, nothing prevents the market from drifting to betting on those types of occurrences in other parts of the world, including the United States. They ultimately decided they were so uncomfortable with this idea of “trading in death” that the program should be suspended. And it was.
The philosophical debate that runs through current coverage of prediction markets takes up this issue: are there events such as deaths, military strikes, and political outcomes that simply should not be tradeable? We have arrived at the moment where immoral acts can be the basis of winning a bet. Or, in the beliefs of this current administration, not a bet, but an “event contract.” We have, seemingly, lost the ability to define the boundaries of immorality.
Kalshi runs adds with the tag line, “The First National Legal Sports Betting Platform,” which sure sounds like gambling. Ninety percent of the trades are placed on sports, and by declaring these event contracts rather than bets, the platforms avoid state taxes and skirt minimum age requirements. But, set aside, if you can, the states’ rights question about whether or not states should have a say over whether these bets can be placed within their state lines and if they do, in fact, constitute gambling.
Focus instead on what we are betting on and ask yourself how our norms have shifted in the 23 years since the FutureMAP program was shuttered. Kalshi also runs ads with the slogan, “The world’s gone mad. Trade it.” This suggests they fundamentally understand that some of these bets eat away at society’s norms. But, only recently have our congressional leaders re-focused on the idea that trading on the end of someone’s life or putting military personnel in harm’s way is unsavory. (Some members of congress have actually been suspended from the markets for insider trading, a new low in the behavior of elected officials.) Two different bills were introduced in March 2026 in the House of Representatives and the Senate to curtail betting on war, terrorism, assassination, gaming, and illegal activity. These are restrictions the Consumer Futures Trading Commission (CFTC) has had the right to prohibit since the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 but is currently failing to limit. The CFTC is taking its cue from the current political administration, not congress.
And that administration has reshaped policies and decision making into transactions. The president has his own meme coin, his own social media platform, and has even announced his intention to open his own prediction market.
We should not be surprised, then, that the tolerance for and interest in such unscrupulous revenue-generating enterprises is far greater now that it was in the early 2000s. From early 2024 to late 2025, the number of total predication market transactions grew from 240,000 to 43 million. This covers the period of the time the CFTC removed a limitation originally proposed during the Biden administration to restrict the markets from trading on sports and political outcomes.
Erosion of ethical norms reshapes the public square, both what happens in it and how it happens. At this moment, we have an ecosystem that has moved beyond simple curiosity to monetizing daily life—and death. We run the risk of losing sight of the terrible deeds being wagered on in a way that desensitizes us to other people’s suffering. And, so the cycle is complete: our expectations of how people in leadership positions behave has changed and so, too, might our own ability to fully grasp the serious implications of world events.
Those who have excused the current president’s ethical lapses as simply a businessman doing business have failed to understand how those lapses trickle down to how we experience civil society. For now, it is simply a market that is always open.