Following the federal government’s wide-armed embrace of the tech, professional gamblers are flooding into prediction markets like Kalshi and Polymarket.
It’s not hard to see why: in January alone, trading volume on Kalshi almost hit $10 billion, $8.5 billion of which was tied to sports, according to new reporting by Bloomberg. That same month, Kalshi saw three million new downloads.
The waters, in other words, are teeming with prey — and the sharks are moving in.
No longer content to ply their trade on the predatory betting apps of yore — the FanDuels, DraftKings and BetMGMs of the app world — professional gamblers have discovered a lucrative new playground in the wildly unregulated land of prediction markets.
“It really feels like everything’s prediction markets, prediction markets, prediction markets,” Rufus Peabody, a professional gambler with 15 years of experience told Bloomberg. “Maybe not for the average recreational bettor, but certainly in the sharp community.”
In gambling parlance, “sharps” are the pros: the full-time bettors who win more often than they lose. And for these gamblers, prediction markets represent a whole new ecosystem of marks, like you, who have far less information and expertise to devote to making well-informed bets than they do.
As Bloomberg notes, traditional sports books take the other side of every wager they collect. Prediction markets, however, pit bettors against each other, resembling something closer to Wall Street than to seedy betting parlors. This fundamental change in structure makes prediction markets a goldmine for intelligent, well-resourced sharps.
“Sharp bettors are looking for every place they can where they have an advantage,” Peabody told Bloomberg. “Right now there’s a lot of alpha to be had on the prediction markets,” he said, referring to the betting term for competitive advantage.
On top of small operations like the one Peabody runs, amateur gamblers are increasingly going up against actual financial firms like Susquehanna International Group and Jump Trading, which are groups capable of betting tens of millions of dollars every week.
All of this is to say: before you place that prop bet on the Super Bowl this weekend, you might want to think about who could be on the other end of the line.
More on prediction markets: Polymarket CEO Known for Yelling at His Employees, Attending Meetings Shirtless
