A man shows a digitally altered image of ousted Venezuelan President Nicolas Maduro, in Lima, Peru, on Tuesday.ERNESTO BENAVIDES/AFP/Getty Images

Vass Bednar is the managing director of the think tank The Canadian SHIELD Institute and co-author of The Big Fix.

As people reacted to the Trump administration’s power grab in Venezuela, it was revealed that someone managed to make about US$430,000 on the crypto-betting platform Polymarket after they placed a bet on President Nicolás Maduro’s capture, clearly capitalizing on insider information.

These kind of prediction markets allow individuals to bet on specific outcomes using financial incentives. They are operated by firms such as Kalshi and Polymarket and collapse hedging, forecasting and gambling into one platform. They blur the worst of all worlds: the social legitimacy of “markets,” the behavioural risks of gambling and the plausibly-deniable regulatory posture of “we’re just a platform.”

In the United States, many of these products are structured as standardized derivatives, “event contracts” that are traded on electronic platforms and settled in cash, with the regulator-of-record debate playing out between financial and gambling frameworks.

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Last year, Kalshi’s CEO Tarek Mansour

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