The Media’s Embrace of Prediction Markets Could Be a Devil’s Bargain |
The Media’s Embrace of Prediction Markets Could Be a Devil’s Bargain
New relationships between media organizations and Kalshi and Polymarket could raise serious questions about institutional trustworthiness.
As prediction markets rise in popularity and notoriety, several news outlets have recently engaged in partnerships with the most prominent of these companies, raising questions about how and why media organizations would want to become entangled with an industry essentially predicated on gambling. Depending on who you ask, these relationships could be ultimately benign—or they could become yet another domino in the cascading decline in the public trust of the media.
Prediction markets allow participants to bet on the specific outcomes of real-world events. The two largest players in this industry are Kalshi and Polymarket. In recent months, Kalshi has struck deals with such outlets as CNBC, CNN, and Fox News, among others, while Polymarket has established partnerships with Dow Jones and Substack.
There are a few reasons news organizations might want to engage in these partnerships, including the possibility of financial benefits. In theory, these relationships are akin to those between news organizations and traditional advertisers. That means the relationship would be subject to the traditional barriers that separate the business side of a media outlet from its editorial side. In this way, the inclusion of prediction market data in news coverage does not mean that the outlet would diminish its coverage of that industry or treat it uncritically, in the same way that a newsletter sponsored by Aetna wouldn’t necessarily go easy on pharmaceutical companies.
“For as long as there’s been advertising in the news, we understand that there’s this firewall between editorial and advertising. And if that breaks down, then there’s a lack of trust in the journalism that’s being done,” said Dustin Gouker, the author of a newsletter on prediction markets. But what’s different about the partnerships between Kalshi and Polymarket and news outlets, continued Gouker, is that this data may be directly inserted into the news, without a clear indication to readers that the information is sponsored.
Meanwhile, the benefit for prediction markets is pretty clear: It raises their profile among an audience who might not otherwise be aware of them. According to one recent poll commissioned by the investment firm Paradigm, 51 percent of voters said they have not heard, seen, or read something about prediction markets in the past year. Given that prediction market use is still low among the larger population, the promotion of these companies on news........