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The Hidden House: Prediction Markets and How They’re Shaping Society

July 22, 2026

Prediction markets offering contracts on virtually every topic—from sports and politics to weather and current events—are one of the fastest-growing industries in the United States. Their spreading popularity raises key concerns: Who wins and loses in these markets? How is their operation shaping our society? And what rules do we need to manage them? 

In a new four-part series, The Hidden House: Prediction Markets and How They’re Shaping Society, we’re exploring all of these questions and more.

A grid-patterned room background with bold text: Prediction Markets and How Theyre Shaping Society. Roosevelt Institute logo at top. Bright green and pink graphics in corners.
A dark tiled room with overlaid text about prediction markets and federal rules. Neon images of gambling websites, a dome, and words WHO WINS WHO LOSES are also present. Roosevelt Institute logo is at the bottom left.

How the Federal Rules for Prediction Markets Fall Short of State-Level Gambling Laws

By Brad Lipton

In this analysis, we compare the rules that apply to prediction markets to those that apply to traditional gambling.

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A dark tiled room with the title The Hidden House: Prediction Markets Across Sports, Media, and Finance: Institutional Entrenchment and the Risk of Path Dependence overlaid, plus abstract images of charts and a building.

Prediction Markets Across Sports, Media, and Finance: Institutional Entrenchment and the Risk of Path Dependence

By Shahrzad Shams

Our analysis shows how rapidly embedded these markets are becoming throughout key institutions such as the media, finance, and sports, highlighting the threat of path dependence—the idea that decisions made early on in the trajectory of an institution can make changing course later on harder to achieve—and the consequent urgency of regulation.

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A digital collage with neon images and text overlay reads: How Prediction Markets Are Shaping Real-World Events and Eroding Public Trust by The Hidden House. A partial globe and White House press sign are visible.

How Prediction Markets Are Shaping Real-World Events and Eroding Public Trust

By Brad Lipton and Toyosi Odusola

Prediction markets could affect all of us, even if you’ve never logged into Kalshi or Polymarket. In this analysis, we look beyond the consumers who participate in prediction markets to the effects these markets are having on our society more broadly.

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Text on a dark, grid-patterned background reads: Since Kalshis Launch, Ordinary Users Have Lost Half a Billion Dollars. Repeated magenta text says, WHO LOSES, overlaid by bold green text, WHO WINS.

Since Kalshi’s Launch, Ordinary Users Have Lost Half a Billion Dollars

By Brad Lipton and Toyosi Odusola

We crunched the numbers: Professionals capture the bulk of the profits on prediction markets. Our analysis explains how ordinary participants in prediction markets systematically lose money to the most sophisticated traders, who use distinct methods to capture the vast majority of gains.

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