The Biggest Business in America Is Growing by Betting on Your Stupidity

Gambling is officially mainstream in America, as evidenced not only by how many ads there were for gambling platforms during the Super Bowl but just how common it has become to bet on the outcomes of everything. If you're not paying attention, it might seem like this is nothing new. After all, Fantasy Football betting has been around (and advertised) for years. The difference is, so called "prediction markets" like Kalshi or Polymarket are letting people bet on everything from who the surprise musicians during the Bad Bunny Super Bowl halftime show would be to the direction of economic markets.

In traditional sports books, you're betting on specific aspects of a game like who scores the first touchdown or who will win and by what score. Despite some conspiracy theories about game fixing, when you bet on the game you're betting against the sports book (like DraftKings or FanDuels). Prediction markets are different because you're betting against other people. Hopefully dumber people.

Take, for example, the bet about the "surprise" halftime show guests. There were likely hundreds of people (from backup dancers to AV techs to stadium security guards) who already knew Lady Gaga and Ricky Martin would be performing. They are insiders and as Bloomberg reported this week, most prediction markets have bets placed by people with knowledge like that. They are essentially betting on stupid amateurs making bets against them, which they have no hope of winning ... and they are collecting.

For now, this is a wild new and unregulated market which means that for a period of time there are smart bettors (known as "sharps") getting rich by preying on clueless gamblers by making well-informed bets. It's hard to blame them. Technically, they aren't doing anything illegal. It's not even unethical, really. They're just acting on information they have and making a buck at the expense of idiots. Thankfully, the fix is easy. Just don't be the idiot betting against them.