Think you can win on prediction markets? Here's why you're more likely to lose
New research from Yale and the London Business School indicates that the vast majority of users on prediction markets lose money, with only a small fraction of 'skilled traders' generating consistent profits. As these platforms expand into Canada, experts warn that casual users are at high risk of financial loss.
Why it matters
The rise of prediction markets as a form of retail investment raises concerns about financial literacy and the potential for gambling-like behavior in unregulated or semi-regulated spaces.
Prediction markets like Polymarket and Kalshi let users wager on the likelihood of real-world events — known as buying and selling contracts — which, in Canada, will be limited to events tied to economic indicators, financial markets and climate trends. For example, current contracts on Polymarket include, "Will there be a Bank of Canada rate hike in 2026?" and "Will any month of 2026 be the hottest on record?"
The article presents academic findings and expert warnings regarding financial risk without taking a side on the legality of the platforms.
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