61% of Americans Say Prediction Markets Are Gambling

• That’s nearly 8x the amount that view event contracts as investing
• 41% use prediction markets to make money
• Young men are nearly twice as likely to participate in sports betting and prediction markets as the general public

Prediction markets are attempting to position themselves as next-generation financial services or financial technology (fintech) companies, but Americans view the industry as another form of betting.

A new Ipsos poll conducted in conjunction with the American Institute for Boys and Men (AIBM) says 61% of those queried “view purchasing event contracts on prediction markets as closer to gambling than investing.” Just 8% of respondents said they consider event contracts as comparable to investing.

Among those who have heard of prediction markets, most Americans (91%) and young men (88%) view purchasing event contracts on prediction markets as financially risky, on par with investing in cryptocurrency and placing a sports bet,” according to the poll.

The comparisons to cryptocurrency arrive as some prediction markets are luring unwitting retail traders with event contracts tied to digital asset prices that expire in just five or 15 minutes, often leading to poor outcomes because those traders don’t have the technology to compete with professionals.

Prediction Market Familiarity Low…For Now

For some bettors and active traders, it may feel as though prediction markets are ubiquitous, and there’s no denying some companies in the space frequently command headlines, but the AIBM/Ipsos poll confirms that yes/no exchanges are significantly less well-known than their sportsbook counterparts.

“Even among men ages 18–24, familiarity with prediction markets is still below one-third (29%), though notably higher than the general public,” according to the poll.

Interestingly, prediction market familiarity doesn’t differ among residents of states where sports betting is legal and those living in states where that form of wagering isn’t prohibited. Other surveys indicate prediction market response rates are elevated in states that don’t permit sports wagering, but many bettors in those states say they’ll convert to traditional sports betting when their states approve it.

Division on Prediction Market Regulation

The AIBM/Ipsos poll confirms there’s division among Americans regarding the regulation of prediction markets. Fifty-nine percent of respondents said it would be a good idea to regulate prediction markets in a comparable fashion to gambling entities, while 52% said event contract exchanges should be regulated similarly to financial services firms. Thirty-seven percent said the industry warrants a fresh set of guidelines, while a quarter said it should be barred outright.

There’s also little confidence in the ability of prediction markets to prevent insider trading — an increasingly hot-button issue and one that’s drawing political scrutiny.

“Relatedly, just 9% of respondents—and 27% of prediction market users—say they are confident that prediction markets could prevent individuals with non-public information from unfairly profiting on the platforms (13% of all respondents were confident in online sports betting platforms, and 30% were confident in the stock market),” according to an AIBM/Ipsos survey.