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In this episode of Galaxy Brain, Charlie Warzel explores the burgeoning industry of prediction markets. These platforms let people wager on everything from elections and award shows to the most trivial internet ephemera, framing bets as tradable “shares” that rise and fall like stocks. With billions in weekly trading volume, massive new funding rounds, and even a CNN partnership with the prediction-betting platform, Kalshi, prediction markets are quickly moving from niche curiosity to mainstream-media fixture—openly touting ambitions to financialize everything.
Warzel is joined by writer Max Read, who argues that prediction markets sit at the intersection of gambling, finance, and a broader “suckerification” economy aimed at young men. Together they unpack whether the markets actually reflect the “wisdom of crowds” or whether they’re little more than a meta-game of vibes, ideology, and misvalued dumb money. The pair explore the culture of these platforms and offer a diagnosis of the attention economy: When it’s hard to sell anything directly, it’s easier to sell derivatives of everything. Prediction markets may promise clarity, Warzel and Read suggest, but what they really offer is another way to feel excitement in a world that feels rigged.
The following is a transcript of the episode:
Max Read: When I say a “suckerification crisis,” I don’t simply mean, Oh, you know, they’re getting bilked out of their money, though I think that’s part of it. I think there’s a whole kind of both commercial and political kind of apparatus that is working really hard to separate young guys from their money.
Charlie Warzel: I am Charlie Warzel, and this is Galaxy Brain. A few weeks ago on this podcast, the journalist Pablo Torre told me this.
Pablo Torre: It feels like, you know, we’re living at a time in which lots of young people were promised things they were not delivered. Perhaps because of the generations that continued to wield power in our government, economy, et cetera, the Boomers—and the way to, like, Chutes and Ladders your way to the American dream is gambling on shit. And in that casino premise, I think you just see again a through line across all these sectors of American life now. Sports being one that has so naturally taken to it. Because, my gosh, here’s an unlimited menu. I mean, literally.
Warzel: Today we’re going to explore another part of that unlimited menu of gambling in the casino-ification of the American economy: prediction markets. Chances are you’ve been hearing a lot about prediction markets lately. At their core, prediction markets are online spaces where people can place wagers on the outcome of events.
They share similarities with sports books except, unlike a traditional bed at a casino, your wager is a futures contract—the value of which fluctuates based on the market value of the outcome of any given event. Right now, people use the markets to bet on sports, events like the Oscars, whether Elon Musk will tweet a specific number of times in a given month, or about the outcome of an election.
The top platforms now for prediction markets collectively report several billion dollars’ worth of weekly trading volume. Kalshi, one of the biggest prediction markets in this space, announced this month that it raised a billion dollars from many of Silicon Valley’s biggest venture-capital firms.
Recently, CNN announced it was partnering with Kalshi to integrate the company’s prediction-market data in the news coverage. The company’s CEO, Tarek Mansour, has big ambitions. At a conference in October, he said this about Kalshi’s future:
Tarek Mansour: The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion.
Warzel: “Financialize everything.”
That’s essentially the quiet part out loud. That is the blueprint for the actual casinoification of the world, brought to you by one of the more ascendant companies that’s moving everything toward gambling. So what’s really going on here? How do prediction markets work? Is there some truth to what boosters allege: that people putting their money where their mouths are is actually a good way to tap into the wisdom of crowds?
Or is this just a dystopian development? An example of companies preying on a society with a burgeoning gambling addiction? Today I am joined by Max Read, author of the Great Substack Read Max. Read covers culture and power on the internet and has this really intuitive understanding of platforms and people.
Recently he wrote a great piece titled “Prediction Markets and the Suckerification Crisis.” Max and I talk about where all this is going and why everyone is gambling and no one is happy. Now, my conversation with Max Read.
Warzel: Max Read, welcome to Galaxy Brain.
Read: Thanks for having me, Charlie.
Warzel: Yeah. So we’re going to talk about prediction markets. Hopefully come up with some grand theory as to why they are ascendant and why everything feels a little bit broken. But I want to just first—for the normies out there who aren’t, you know, using them.
How would you describe them? How are they different from straight-up gambling or a sports book?
Read: Yeah, well, the first time I wrote about them, I described them as sports books that allowed you to place wagers on non-sports events. But I think the extra sort of bit that’s important to understand about them—because at the end of the day, that is what they are, and it’s the way a lot of people use them. And I should note, by the way, that when I say they’re not: They’re sports books that allow you to place bets on non-sporting events. Many of them are actually also sports books. Kalshi in particular allows you to place wagers on games.
But what they do is really emphasize the wager as a security that you can purchase and sell the way you would a share on the stock market, say. So if you believed, say, that there would be a Democratic sweep across New Jersey, Virginia, and New York City back in November, you could have bought shares. Or you could have bet on that outcome for, you know, what, like 30—like, they’ll do it as prices, right? You bet, you wager 30 cents for the return of a dollar, right? So you could buy the shares at 30 cents. You buy 10 shares at 30 cents; you get $10 back. If that comes off.
Now, I mentioned 30 cents, say, because a couple weeks—I’m not sure if that’s the exact price—but a couple weeks before this election, it was kind of unclear what Democrats’ chances were going to be in any of these elections. There’s a lot of polls coming out saying that Mikie Sherrill in New Jersey was running dangerously sort of close in the race against … I can’t even remember the name of her opponent at this point.
But, you know, it was a fairly low probability according to the betters on the app. Right? But as the returns start to come in on Tuesday night—and it becomes clear that actually the chances that this is going to be a sweep across all these elections get higher—all of a sudden the price of a given wager rises. Or the price of a given share, so to speak.
So at 30 cents—suddenly it’s 40 cents, suddenly it’s 60 cents. The way you would think about that if you were just talking gambling odds is, all of a sudden, you’re getting less return on your wager, basically. Your odds are getting significantly easier.
And, you could have, say—let me give a slightly different example of election. So recently in Tennessee, this woman, Aftyn Behn, was running for a congressional seat. And, she was absolutely not the favorite. It was a “Trump plus 30” congressional district or whatever, and you could buy shares for her victory at like, you know, 20 cents, something like that, the week before the election. The night of the election, as returns start coming in, she’s looking actually kind of good for it. The early returns are quite good for her. And I watched as the price of her shares climbed up. I’m not going to say whether or not I had any horse in this race, any money on this. But I was watching it closely, let’s just say.
And there was a point where if you had bought shares at 30—and again, who knows who I’m talking about here—but if you had bought shares at 30, you could have sold them for a 100 percent profit. Sold them at 60 cents. Only for those shares to come crashing down as the results continue coming over the night, and it becomes clear it’s not happening.
So—sorry, this is a sort of complicated explanation—but I think it’s useful to understand how you use it. Right? That when you go on these sites, what you’re doing is: You’re doing this kind of thing that’s kind of a hybrid. Like stock-market day-trading activity and a betting activity. And I do think it’s worth saying, as much as they emphasize the sort of security, quality of these wagers.
You can do this at a sports book too, right? That odds will change at a sports book depending on who’s taking which side of the bet, and you can cash out. Most sports books will allow you to cash out various times, you know, after you’ve placed your wager. And if the odds of the wager have changed in between the period where you placed your wager and you’re cashing out, you could make a small profit just from cashing out, right?
If you wager a team is going to win, and then you could cash out with five minutes to go and they’re up by 20 points, you’re not going to get as much as you would if you saw the whole thing out. But you can cash out at a fairly high profit. So in that sense, you know, it’s sort of another way of looking at, or another way of thinking about, gambling that emphasizes the sort of up-and-down nature of odds. And I think that’s how most people kind of approach it when they’re on the site placing these wagers—they’re thinking about it like betting. But I think it’s also important to understand why [these sites] have become so ubiquitous in media is that they are exciting to a lot of economists and libertarians. especially libertarian economists. It’s that they offer a kind of semi-accurate—accurate depending on the liquidity of the market, accurate depending on the size of the market—accurate picture of what you might think of as the conventional wisdom. Right? Because there’s all these people collectively saying how much [they’re] placing their own odds, so to speak, on a given outcome.
Wagering their own actual money, so they have skin in the game. So nobody’s doing this just for propaganda purposes, or whatever. You can say, Conventional wisdom has the chances of this event happening at 50 percent, 30 percent, whatever. Now, these markets are still fairly small, and many of them are not very liquid at all.
So it is not like there’s millions of people betting a couple bucks at a time to make them, you know, as sort of accurate as possible. You’ll have a couple whales who are placing large wagers, which makes them interesting in what they tell you. Because it’s not saying, necessarily, the conventional wisdom according to the kind of person who places a bet on this kind of a thing.
But that’s the other side of it. The nonuser side, the media side, the philosophical side of this is: Prediction markets allow us to start to look at the future in this way that allows us to set probabilities about things.
Warzel: I’m curious what you make of the “wisdom of crowds” bit, because this is the part of me that stops and feels a little insane sometimes with this. Because I think about, like, this is essentially a meta-game, right? Where you have this system that produces outcomes and incentives for certain outcomes that arise in it, and you wrap that system in an apparatus that is also concerned with influencing those outcomes.
It’s this second-order thing like you have with poker—where good poker players can technically predict the outcome of hands, but that is also influencing the outcomes of the games. It just feels to me like what you’re doing is: Prediction markets aren’t what people think will happen. It’s what people think other people think will happen, right? So it feels to me it’s confusing.
Read: I do think there’s a use for that. You could come up with reasons. And from a financial sort of market perspective, one way of thinking about it is that these are effectively tools. Instruments for hedging, right?
That you have a sense of—you think something’s going to happen, but you also want to place some wagers on the side in case it doesn’t happen to limit your losses. And for that, you don’t need it to be wholly accurate, right? You just need it to sort of approximate a given outcome that allows you to make money off of that.
I think there’s sort of two ways to go with what you’re saying. One is that, until recently, prediction markets have largely been a sort of theoretical idea, right? I mean, we could talk about the stock market—or a sports book, for that matter—as a prediction market. But this sort of all-encompassing marketplace to make wagers on.
I mean, recently there were wagers on the Time magazine “Person of the Year” cover, all the Oscars, all the award-season stuff. You can wager on who’s going to get nominated and who’s going to win. We’ve talked about elections already. There’s even, often, marketplaces for words getting mentioned by prominent figures in—what’s the word I’m looking for—in speeches or in, you know, earnings calls. If you believe really strongly in the idea of the wisdom of crowds, it’s very exciting.
But the theoretical model of the prediction market is, as I was sort of emphasizing before, is one that everybody is participating in. The market is fully liquid. Everybody has a stake in it. Everybody is placing wagers there. And these markets are fairly far from that, right? On Election Night, there tends to be enough money, and enough people, to sort of approximate what we’ve been talking about as the conventional wisdom about who’s going to win and who’s going to lose.
But that’s not always the case, and certainly not the case for stuff like these culture categories that I’m talking about. I wanted to ask—without you having to divulge whether you are, or are not, actively participating in these markets—what’s the culture like on these? I think it mirrors some of the culture on X/Twitter in the Musk era.
But when you go either to try to place some wagers, or for reporting purposes,what’s the culture like?
Read: So, I can talk about the culture in the comment sections—which I wouldn’t want to suggest is wholly reflective of the culture of these places in general.
And I think there is a wide range. There is smart money. There are sharks out there who are running programs and bots to identify. Especially on an election night, you’ll get guys who are pulling results all doing this automated, basically HFD—like high-frequency traders pulling results from The New York Times or Decision Desk or whoever. And, like, immediately placing orders on shares to take advantage of that. Like, you don’t have to do it in the milliseconds the way you do on Wall Street, but you can do it if you just do it in a couple seconds. We’ll still make it advantageous.
And you have people who are quite good—for example, the Time magazine cover leaked before it was announced. And a bunch of people made a tidy little profit, because it took a while for the market to catch up. So I say that just to say that there are smart people. Just as a to be sure thing before I get into the comments—which are really stupid. I mean, there’s just a lot of stupid people there. And there’s a funny mix of just really obviously stupid people—you know, Free Republic–commenter type, X, like bottom-of-the-barrel, Trumpist X types. And then there’s stupid, just guys who have sort of wandered in. Every wager, if you scroll far enough, you’ll find a guy who took the stupid side of the wager because he didn’t read the terms until after he’d put his $50 down.
He is like, Oh, I didn’t realize that I was actually betting, you know, against this. I thought I was betting for it. Oh, well, now I’m out 50 bucks. The tone reminds me a lot of—I think the closest thing I can think of online, or the two closest things, are the: If you play fantasy football in Yahoo, every player has their own little comment section. And you can pull it up as you’re deciding who’s to start and who to bench.
And it’s just filled with people just clinging to the most desperate of threads. You know, citing articles they read somewhere. Nobody’s linking to anything. Everyone’s like, Oh, I heard he is going to play. Oh, I heard he is injured. Oh, I heard he’s, you know, he’s not going to be the first QB.
He’s not going to get any catches. He is not going to get any throws this game. Whatever it is. And the comments on the bets kind of remind me of this on all the markets. It’s somebody being like, Oh, you know, there’s one market that’s which member of Trump’s Cabinet is going to leave first.
And everyone’s like, Well, okay, well here’s this thing I read about [Pete] Hegseth. And somebody else will be like, Well, I read this about Pam Bondi. And people doing their theories. It’s a message board. It’s not the dumbest place I’ve ever read, but it’s of a basic kind of politics message-board stupidity.
It’s just that there’s all this money going on in the background. All of which is to say, when I say it’s similar to the fantasy-football chats is: It’s very male. Obviously it’s very young. Obviously, I mean—I think most of the guys are sort of in their 20s. It’s sort of confident, but Ill-informed in the way you would expect a lot of guys who to gamble in their 20s basically are.
Warzel: There’s also—and I don’t mean this in a pearl-clutching way—but it’s a little reactionary. Right? Because part of what I see in the elevator pitch from some of the founders of this—it’s trying to court people who have some skepticism about the way that institutions behave, right? Kalshi’s co-founder, Tarek Mansour, I think is how you say his name. He’s really positioned this as the “wisdom of crowds,” because regular institutions have failed us, right? Because there’s this plethora of information out there, because reporters aren’t actually very good at telling, or getting, the story the way it is—come here. Not only is this a helpful tool, but that seems to recruit, just generally, people who a little bit more edgelord-y, or whatever. Yeah. Is that accurate to you?
Read: I think so. I mean, I think—certainly, not to sort of underline this point—but I do think it’s worth thinking about the prediction markets in two phases.
There’s, especially, the ones around politics. There’s the long phase before the election, whatever election is being bet on, happens. Which, I think, there is a—I don’t want to put a number on it, but I think that the markets tend to lean right? They just tend to overestimate Republicans. They tend to—not by a significant amount, not by the amount that you can make a ton of money off of unless you’re gambling a lot—but generally they tend to give Republicans better odds and Democrats worse odds. That’s phase one. And then, phase two is closer to the actual election. And that’s, in my experience, at least, when the smart money starts to roll in. And people come through just to pick up—basically, they take the transition from “the market’s tilting Republican” to reality setting in, and they make a quick profit off of that.
And then, by the end of the night, we know who won, and the markets are settled. They’re mostly settled. So I think that: Yes, the culture, in that sense, tilts right. I think that there’s also sort of two aspects to why that is. The first is exactly as you’re saying: that there is a deep and longstanding philosophical affinity between predictions markets, the wisdom of crowds, so to speak.
The idea that markets, in general, can calculate things better than institutions or humans can. That dates back to [Friedrich] Hayek and [Ludwig von] Mises. And this is sort of foundational to, you might say, neoliberalism in some broad sense. But also to a lot of the way that Silicon Valley has thought about the world since the ’90s.
Right. You know, there’s this idea that we don’t want top-down people in charge. We want this sort of collective, anarchic mass of humanity working together. And a market or a quasi-market format will pull these together. So I think there is this kind of highfalutin, let’s say, philosophical background here that probably pushes the prediction markets—the people who use them and certainly the people who build them—to the right. To the kind of libertarian, hard-libertarian, market-worshiping right. But there also is a particular sort of base, reactionary nest to a lot of what goes on there, that I think is more tied in with—to some extent takes its cues from—the sort of intellectual draws that I’ve just been talking about. But is more tied into one being young and male. And gambling—young men like to gamble; young men tend to be more right wing.
So I think that’s just sort of a basic demographic and sociological fact of 2025. They’re also pulling in a lot of people from X, which is just significantly more right wing than it was five years ago. And, as I was saying, they also are—without wanting to be too smug about it—they’re trying to pull in, through their marketing campaigns, pull in a lot of dumb money. To make it attractive for smart money to come in.
And they do that by advertising to the biases of the reactionaries on X, basically. So, I decided to write about this because, around the time of the November elections when Zohran Mamdani was running high in New York City, but as is often the case, there’s a lot of people in New York who hated him. Who were sort of, Well, I don’t think he’s going to win.
You know, I think people there [were], as you were saying, The mainstream media is ignoring all my neighbors that hate him. All my neighbors are going to vote against him. And Kalshi started running. And Polymarket, too, started running all of these. They own these, um. They run these sort of newswire accounts, that are depending on both the official accounts. But also they have their own news accounts that they don’t link to the betting sites, really. They just do these blanket, one-line, almost like a Bloomberg-terminal news thing that tends to be very misleading. Very right wing.
You know, in one case Kalshi tweeted—sometimes they’ll tweet about the prediction markets. And they’ll be like, Zohran Mamdani’s position is tumbling. And that kind of thing is obviously going to bring in … you know, you could do that with liberals. I don’t wanna pretend that liberals in America are so much better at picking out misinformation and scams and whatever else. But it’s very clear who they want to appeal to on Twitter. And it’s low-social-trust gamblers, basically.
Warzel: Yeah. And also, just even beyond the political part of it. Some of these accounts that are run by these prediction markets—like Kalshi, Polymarket—are just trolling, right? There’s this one image of 49ers running back Christian McCaffrey with the caption “Loves receiving balls,” right?
And it was just this big sort of trade, or “on the disabled list”–style, graphic. But again, as you said, they don’t link to it. But it’s almost just kind of like, We’re having fun on here, too. Why don’t you come have fun on our place, and, you know, take advantage of this?
But, you talk about this dumb money. And you described it, in this great Substack post that we’ll link to, as the part of the male “suckerification crisis.” And can you elaborate a little more on that? I think that’s sort of your corollary to the male loneliness crisis they’re in. But what are you saying here?
Read: I feel like one of the big stories on the internet—and in society at large—over the last five years or so has been the extent to which young men have fallen under the spell, or the sway, of a variety of different kinds of scammers, hucksters, fraudsters. When I say a “suckerification crisis,” I don’t simply mean, Oh, you know, they’re getting bilked out of their money. Though I think that’s part of it. I think there’s a whole kind of—both commercial and political—apparatus that is working really hard to separate young guys from their money.
And I think that there’s something about, I don’t have a grand … you know, this is more of a corkboard-and-red-yarn theory than an equation, right?
Warzel: We love that.
Read: But I see these connections. I see these sort of basic dynamics play out in straight old-fashioned sports gambling, which has sort of taken over sports media. That was legalized a few years ago and now kind of dominates the way we talk about sports in the country. At least, in the media that has written about sports and filmed about sports. I see it in prediction markets as well. Talking about this, sort of, Kalshi and Polymarket Twitter feeds that we’re talking about. You know, the sense that This is gambling kind of creeping into even more layers of life, layers of social life.
I see it in the kind of manosphere-influencer guys. These sort of perennial subjects, objects of moral panic. But, you know—the main sort of dynamic I see there is not necessarily even kind of ideological, radicalization on the part of somebody like Andrew Tate. But the way that they are selling a particular story and a particular product to a bunch of young men that kind of cultivates them as suckers, that turns them into suckers.
And I think that Trumpist politics—by which I mean both the Republican Party under Donald Trump, but also all kinds of right-wing, reactionary politics—emerge out of the same sort of soup. You know. This highly emotive insistence that—as you sort of put it earlier—Institutions are failing you, but we’ve got the cure. We’ve got the ticket; you can participate in this movement. You can show everybody that you’re smarter than everybody else. Here’s the secret to making money. Here’s the secret to, you know, winning in politics. Here’s the secret to getting girls. Whatever it is. It’s funny to me how much you can sort of see that same dynamic across what should, theoretically, be these quite different kinds of spheres. But seem to, in fact, kind of be converging on this one sort of business model, more or less.
You know, just to provide some historical perspective—Rick Perlstein, the historian, has a really wonderful essay in The Baffler from maybe 10 or more years ago that I think about all the time in terms of this. I think it’s called “The Long Con.” And it’s about the origins of the conservative movement in the 1950s and the extent to which the conservative movement has always been deeply tangled up with, basically, snake-oil mailing lists.
That a huge part of what powers the conservative movement is access to mailing lists of low social trust. Reactionary voters who are willing to buy what you’re selling if you speak the right language, more or less. And, as I was saying before, I think Twitter feels sort of like a really sophisticated version of that.
And I think that this whole complex of businesses are finding new ways to sort of exploit that particular dynamic. And, to some extent, I think this is a sort of layered process, right? That you go on Twitter—it’s a social media site. It’s, you know, highly volatile. You’re constantly feeling like everybody else is getting more views than you.
You’re constantly sort of feeling you’re in this strange space that you don’t necessarily understand. You know, you’re surrounded by people who are expressing that same strange feeling. It feels a lot like being in the economy, too, doesn’t it? And isn’t politics also this strange, volatile space?
Surely there’s a way we can all make a little extra money off of it. We’re constantly in competition. It’s not a hard-and-fast theory. It’s this set of affective triggers, right? These sort of—this vibe that’s out there that seems to be quite inescapable. In particular for, you know, recent college graduates. Kids in college, even in high school,
Warzel: Right. And there’s this way that it’s this reinforcing system, right? If you do fall into those, into that mindset, you enter into a place that sort of embraces the chaos, embraces the precarity therein, right? And then feeling all that gives you. The only possible way out, right?
The only possible latch onto a kind of, you know, new version of the American Dream. Which is just like, I buy this memecoin low, I sell high. Right? I get in this place here, and it’s—but that usually doesn’t work out well for most people, right? A lot of the dumb money. And then you get back in this cycle of precarity resentment.
Okay, now we have the antidote to that. And the cycle just repeats over and over again.
Read: One thing I would add, that I didn’t really write about in this piece—but that has been something on my mind for a long time, because I feel it too—is a sort of increasing sense in American society that everybody else is getting one over on you and/or the system.
And that in fact, if you let everybody else get one over on you, you are weak, and you have made a mistake. You know, you are a sucker. When, in fact, I think in many ways it’s sort of the reverse. That it’s like, if you’re constantly trying—if you’re the one who’s constantly trying to get one over—you probably are a sucker yourself.
And, you know, I think there’s—I mean, the root cause here, I would say, is sort of society-wide breakdown of trust in institutions. You know, in the sense that institutions are in it for themselves, and they are, you know, corrupt. And giving handouts to their people and not to you.
Again, this is also this sort of vibe that seeps out and powers a lot of the kind of activity around predictions markets. But also around a bunch of these other businesses and figures.
Warzel: I wanna test out a theory on all this that’s maybe another side of it. Or maybe it’s just this in a different skin, but which is, very broadly, this idea that it’s exceedingly hard in a mature attention economy to sell something, right?
And it is because of all the competition for attention. And it’s much easier to sell a derivative of that thing. I read this post a couple weeks ago that was talking about movie marketing, and how it’s kind of just gone haywire. And this idea that stars are doing things that aren’t like a traditional junket, where they’re talking about the film with a hundred different people. But they’re going on a hundred different podcasts or, you know, video shows or whatever.
And basically doing viral skits, right? You can kind of start at Hot Ones. But then you can trace this to Jennifer Lawrence and her co-star Robert Pattinson doing lie-detector tests, right? A lot of celebrities doing lie-detector tests for Vanity Fair or whatever. And it’s good content. People watch it. People are interested in it. It’s good for the timeline. But it historically is not selling these movies, right? Because they’re not talking about the film. They’re talking about themselves in the hope that they’re going to garner enough attention to sell a film.
Right? And, I think of that idea of a derivative of something. I think about it, very obviously, with sports gambling, right? Leagues are interested in having this, because it does draw attention to the games, right? Adam Silver, the NBA’s commissioner, wrote this op-ed 10 years ago or so, kind of advocating to legalize sports gambling.
And there’s this idea that it will draw in interest and attention to this event. But it’s interest and attention essentially to, you know, a game within a game. Right? People are interested in hitting the over; they’re interested in, you know, how many free throws so-and-so gets. Or, you know, misses. Or whatever, right?
And I’m curious if you feel this too? That—we see it with elections, right? It doesn’t matter so much about the outcome as much as it is getting the edge. And this idea of financialization of everything. Just creating derivatives of everything to the point where it’s almost impossible to sell a thing.
Read: Yeah. I mean, I think that this is part of the attraction of the prediction market over the regular sports book, too. I guess it’s not just derivatives; it’s securitization. And that you create this object that you can sell and resell at whatever.
You know, I don’t want to drive the metaphor off a cliff or whatever. But one of the interesting things about those viral videos of, say, Pattinson and Jennifer Lawrence doing the lie-detector test, as you say—probably not very useful for marketing the movie. But that video is now useful to Vanity Fair, or whoever it was that filmed it. And will be useful to them for 10 years, because those are going to be famous people that people will wanna see for 10 years.
Lord knows, there’s no time limit for anything on the internet. You now have this thing that just kind of exists in the world. And I think that there’s a real difficulty to find ways to have those derivatives, to maintain their relationship to the bigger project that’s supposed to be pushing forward. The other thing, I would say, that sports thing—what you were saying about sports makes me think is that part of this is about media in general. Right? That we’re increasingly difficult to figure out how to pay for the media that exists, and that we think of presumably as sort of integral to democracy. To our liberal democratic system. And sports arguably runs a little bit ahead of political media, news media, in terms of business models and whatever else. And one of the big reasons that Adam Silver has been an advocate for legalizing gambling—and one of the reasons why all of the media companies, ESPN chief among them, have so enthusiastically embraced sports betting—is that we sort of have reached peak sports.
We’re a little bit over the hill in peak sports. Basketball is a very good example, because—you know, Mark Cuban was talking about this just last year—nobody thinks the next few TV deals are going to be anywhere near as lucrative as the last few TV deals are. Where the question is: Who is making money and how are they making money?
And that’s not just the question for the team owners, who will always make money from the stadium, right? And from the actual games themselves. But how is ESPN going to make money? And the answer, right now, seems to be gambling. We’re going to take gambling sponsorships; we’re going to talk about gambling all the time.
So when we talk about, like Kalshi and Polymarket. You know, why is CNN so enthusiastic about bringing them on? I mean, they already are, in fact, partnering with Kalshi to, I think—or maybe with Polymarket—to produce odds for them on Election Night. And presumably elsewhere during the political season.
And so I think there’s the other part of it, in addition to the kind of structural. The way we think about marketing and attention is to break things off into these little pieces that can be bought and sold. In the last 10 years, it’s that we are facing a crisis for how we pay for these things. And gambling is a traditionally fairly lucrative industry to be in. And, you know, that’s a way that CNN could take itself.
Warzel: You don’t want Cousin Sal to moderate Meet the Press going forward. I feel like that’s a great idea. The partnership is between Kalshi and CNN, and I think that, you’re absolutely right about the “paying for it” part of it. Which is obviously the most important part.
I also think that there is this attentional quality that injects a little bit of—I’m trying to think about this. You know, it feels so dystopian having CNN’s Harry Enten, the polling guy, is going to be the one who’s going to be doing the big board and looking through the Kalshi odds, what they’ve said.
And it feels a little dystopian to have that partnership. But also, it injects, I think—for them trying to rationalize it in some way—some excitement into something. That, when you said we’ve reached peak sports a while back, we’ve reached peak politics too.
We are well beyond peak politics, where everyone is just sort of ground down by, you know, how this works. But also kind of strangely, terminally addicted to it at the same time. You can’t quit it, but there’s nothing in it. And this is sort of—whatever derivative, a securitization. It’s some element that I think also injects … people joke about horse-race coverage. And it’s like, no: We’re actually making a horse race now.
Read: The problem with horse-race coverage was that we didn’t have the horse race yet.
Warzel: Our mutual friend and fellow tech writer John Herrman wrote a thing for the Neiman Lab’s year-end predictions here for 2026—that the media will become addicted to gambling, follow the path of sports media.
It’s very smart. Do you feel like this is just going to get worse? Where do you see this all moving? Is it just increasingly lawless, like we’re just going to, you know, fall victim to all this? Do you think this is a kind of a fad? Do you think this is maybe something that actually is the injection of capital that these places need? How do you sort of project it going forward?
Read: I am not necessarily as pessimistic. I think that the forces are arrayed in favor of the prediction market becoming a sort of dominant means by which we interpret and understand the world around us.
There’s a lot of money behind that—and there’s a lot of powerful philosophical and political ideas that want to see something like this, you know, take a larger role in society. And the truth is, in addition to … I don’t even mean to make it sound that sinister. Like, from a banker’s point of view, a stock trader’s point of view, having all these extra hedging instruments is useful. From the point of view of CNN on Election Night, setting aside this sort of question of how much gambling is going to dominate CNN, the prediction markets give us something to talk about that is not that different in terms of its relationship to reality—from polls, say.
So all this stuff is the money, the philosophy, the use. All that stuff is lined up in a way that gives prediction markets, I think, a big sort of runway to find themselves. To become more and more prominent. And to intermediate more areas of life. That being said, we’ve seen, since 2022—when, I think, sports gambling was legalized in New York—we’ve seen how much sports gambling has taken over sports media. How much sports betting has sort of become this ubiquitous thing in coverage. But my impression—and I think this bears out in most of the polling that’s been done recently—so people actually hate this. Even the young men who are supposed to be the customers don’t really like it very much.
And I think that same quality is going to be true of prediction markets. I think there’s a very particular—this is just baseless theorization right here; this is my own version of astrology—but I think there’s a certain kind of person whose brain works in this particular, let’s say Bayesian way. Where they are constantly thinking about things in terms of odds. Where they are calculating in their own heads, you know, arbitrage opportunities and what kinds of bets they’re willing to, you know. They’re doing Kelly criterion bets and whatever calculations in their heads.
And I think for those people, these things are incredibly exciting. I think those people are also really heavily concentrated in Silicon Valley and Wall Street, basically. Those are the places you go if that’s the kind of brain you have. I think a lot of the rest of us find it … I mean, I could speak for myself alone, but I know I’m not alone. That kind of way of being in the world—way of thinking about the world—is exhausting. You’re not really thinking about the game. You’re thinking about the over; you’re thinking about the props that you’ve put together.
You’re thinking about the parlay across the three different games. I think that prediction markets being inserted everywhere else has a very similar kind of quality to it. I wonder if there’s a happy medium? I think with sports betting, what many people sort of now these days believe is that there should not be apps for it.
It shouldn’t really be legal. There should be a guy that if you have the social wherewithal to find, you can place a bet with, right? But it shouldn’t be the kind of thing where they just roll out the red carpet, and there’s a lubricated path to losing all of your money.
And I’m pretty sympathetic to that. I don’t know if that makes me an old man.
Warzel: I think what you’re saying is: Friction is a good thing, right? Friction is helpful here. And a lot of these betting apps … I actually can’t speak to Kalshi or Polymarket, but like the the DraftKings, FanDuel—they’re literally sending push notifications. Of like, This is about to happen. You know, whatever it is.
It’s not even neutral, in the sense that it’s easily accessible. It’s like the bookie is sitting on your couch, you know? Asking you if you’d like to get in on this. Right? So you have that element; you have the idea that gambling itself in all things—whether it’s on elections, whether it’s on whatever—gambling is not a static thing, right? Every different type. There’s so many different types of gambling, of ways to bet, that can give you slightly better odds. Or that are, you know, based off of skill instead of blind luck. And the idea that the closer you get to the slot machine, right? Just pull and, you know, a couple of things have to line up—that’s the worst part of gambling. And that’s what we are moving toward; this tech-enabled stuff tends to resemble that more than it resembles, you know, betting on who’s going to win in a golf match, with your friends or whatever. And then I think you’re right about the exhaustion of it all.
And it reminds me of the nature of these companies, right? This focus and need on scaling. A lot of these companies—like Kalshi just raised a billion dollars earlier in December from some of the major tech venture capitalists. They’re obviously going to need to scale. Their CEO said now, infamously, the goal is to financialize every single difference of opinion in the world. Which, as you put, is patently the most exhausting thing you could imagine.
No disagreement goes unmonetized is like—just end it all now. I think, unlike you, I do feel it’s a little sinister. Listening to you talk about the relationship of the risk, the volatility, you know, the gambling, the sort of reactionary poking and prodding and trolling on X to get you in the funnel, to put you into this precarious situation.
All of that, to me, actually feels it is bad. And that feels dominant to me, over “This is a really great way to get a bird’s-eye view of a situation.”
Read: I probably am being too kind. I do think it is sinister. And I think that it’s bad in an absolute sense. But I am, also—I feel like it’s good to be conscious of the uses that it has. And the kinds of forces that are arrayed in its favor. And that it’s not a cash grab, and it’s not a kind of, necessarily, a pure philosophical dispute—that there are serious institutions for whom this represents a windfall or a new method of doing what they do.
I wonder a little bit. Let me preface this by saying this, as a sort of depressing thought that I’m not necessarily endorsing. But, you know, one reason I think that sports gambling has taken off so wildly—and one reason I think even stuff like fantasy football, which is in some ways quite similar to gambling, but obviously also very different in important ways—is the extent to which sports as a pastime, or as an entertainment, represent a kind of … I’ll take baseball for an example.
Say that baseball is kind of a solved game. You have a pretty good sense at the very beginning of the season. You know people are very good at projecting who’s going to win, how many wins there’re going to be. What you’re waiting for is injuries. And then, the playoffs.
It’s not luck, but it’s basically luck. I say that, you know—it’s probably the greatest World Series of my lifetime, this past year. But one thing that I think that gambling allows us to do in in a world—in, like, the NBA, when a third of regular-season games, most of the stars just flat out aren’t playing. Which I know that the NBA hates, but is also exactly what you need to do, because that’s a problem that has now been solved by resting people.
What you find yourself wanting to get: the sense of volatility—the sense of unexpected delight and whatever else gambling becomes—the way you get out of sports. That what feels harder and harder to get as more and more money gets applied to, like, figuring out the secrets to winning each one of these.
And I’m not sure what the way to apply that is as a metaphor to the rest of the world out there. But I think that part of what the attraction here, too, is taking things that have been optimized to hell. Like, whatever it is. The things that no longer give you the same kind of burst of enjoyment because you know what to expect from them, at all times.
And the gambling—you know, the prediction market, the gambling, the wagers. They give you that little extra burst of dopamine, energy, enjoyment, excitement. Because all of a sudden you’re attaching some money to something that isn’t the necessarily even the main point of the game. And I think, to me, that’s depressing. Because I’m sympathetic to it. Right. Though I’m sympathetic to that desire to try and find the same kind of enjoyment. But also because that’s the thing that, I think, hooks people—more than the sort of sense that, Oh, I can find the edge by doing my calculations in my head. And every dispute is going to be financialized, and we’re going to figure that out.
It’s more like: I just wanna take a little risk somewhere. Like, a fairly safe risk. Just to give myself … just to feel something, somewhere. Just to feel something.
Warzel: The thing that makes me think about with sports—especially in baseball, where we’re about to go into, a year from now, these major labor disputes with the unions—is this inequality, right? There is this fundamental inequality in baseball between the haves and the have-nots. And the big-market teams and the Cincinnati Reds. Or like, you know, what have you. And in that, you do have that situation often in a fanbase of Okay, well, if we make the playoffs, we’re going to get, you know, absolutely destroyed in the first round. And that’s a good year. And “enjoy the ride,” right? But it’s getting something else there. And then when I try to think—does that apply broadly out to politics?
Of course, maybe not exactly, right? It’s not a total inequality thing. But it is this sort of feeling like the system isn’t going to move, right? Like it’s sclerotic in this way. Like you’re not going to get a candidate that’s just going to come out of nowhere, unless you have, you know, these instances like Mamdani.
Read: I mean, look at how much energy, I mean, even Kamala Harris’s emergence—in 18 hours as the Democratic nominee, after [Joe] Biden [dropped out], had that burst of energy. Because it was such an unexpected historical event. Even if she was, you know, not the most exciting candidate to young people in the world, or whatever. She was a sort of—exactly who you would’ve “expect the unexpectedness” about. It gave that extra bit of energy.
Warzel: I think that that is such a good way to frame all of this in a world that’s feeling a little bit locked, right? Where everything seems a little locked, this is injecting a kind of chaos that allows people to feel.
Read: I think that’s real. Well, the other thing—and I would say two things on top of that. One is: I think—just to reconnect some of the stuff we were talking about before—I think it is relatively similar to some of the appeal of social networks, which have a volatility to them. And I think that one of the reasons that Twitter is less—and Facebook too, are less and less, and Instagram even—become less and less interesting to people is probably because they become sort of solved games. And, you know, what does well in the algorithm. What does well. It’s much harder to have that pop of the thing that you get really early on a social network—always like, I’ve never seen something like this before. This is so weird. This kind of person, you could still sort of find it there. But those that like volatility, it’s there in a certain limited way. But not in the same way. The other thing, I would say, is that this feeling we’re talking about—I think what’s at stake is a sense that there’s very little to surprise us anymore.
And this is, again, a sort of a vibe more than it is a fact. But there is this vibe of, like, Everything’s optimized to hell. Everybody, for the most part, acts really cautious in their given settings, the domains in which they’re playing. It’s hard to find surprise. Gambling at least gives us some level of, you know—allows us to feel something, as we put it.
But what prediction markets effectively do, over the long term, is even eliminate that from gambling. Because what you’re doing—once the market is big enough, once enough people are betting—all of a sudden all the surprises are kind of gone. Except for weather events, right?
It’s the last thing that you could bet on: where there’s some possibly there won’t be rain, despite the 90 percent–chance forecast the next day. And I think it’s self-defeating. I suppose. I don’t like … that’s a science-fiction story more than it is something that we really have to worry about at this point.
But I think that ultimately the point of the prediction market is to reassert the primacy of locked-in predictions. Even if what makes it interesting right now is the enjoyment of risk and novelty and surprise.
Warzel: I love the idea that eventually the prediction market, it eats its own young at the end of it. I think that’s a great place to leave it. Max Read, thank you so much for coming on Galaxy Brain.
Read: It was absolutely my pleasure. Thanks for this great conversation.
Warzel: That’s it for us here. Thank you again to my guest, Max Read. If you liked what you saw here, new episodes of Galaxy Brain drop every Friday. You can subscribe to The Atlantic’s YouTube channel, or on Apple or Spotify or wherever you get your podcasts. And if you enjoyed this, remember: You can support our work and the work of all the journalists at The Atlantic by subscribing to the publication TheAtlantic.com/Listener.
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