Prediction Markets Are Reshaping the News
▼ Summary
– Substack has partnered with betting platform Polymarket, integrating its prediction market data and paying creators to use it, which blurs the line between news and speculation.
– The article argues that news, by definition, is a record of past events, not predictions, and criticizes the conflation of betting markets with journalism.
– It explains that pseudo-events (planned occurrences like press conferences) often dominate news coverage, creating a landscape where prediction markets can be misleadingly presented as news.
– Prediction markets are problematic because they can involve illegal insider information and systematically profit from less-informed participants, harming the public interest.
– The author contends that news organizations undermine their core mission of serving the public by partnering with these markets, effectively endorsing a form of gambling over accountable journalism.
The growing integration of prediction markets into news platforms represents a fundamental shift in how information is presented and consumed. Substack’s recent partnership with the betting platform Polymarket, which includes native tools for sharing market data and a program paying creators to use it, exemplifies this trend. Proponents like Robinhood CEO Vlad Tenev argue these markets represent “the next generation of the news,” suggesting that forecasting events holds more economic value than reporting on them. This perspective, however, conflates speculation with journalism and risks eroding the core function of news media.
At its heart, news is a record of what has occurred. From ancient Rome’s Acta Diurna to the first European business newsletters, the purpose has consistently been to document past events. While modern outlets cover planned “pseudo-events” like product launches or political speeches, the journalism itself reports on something that has already taken place, even if just moments ago. By definition, you cannot know “the news before it happens.” Prediction markets, in contrast, are fundamentally in the business of gambling on future outcomes. The dangerous blending of these two concepts began within political coverage, where unreliable polls created a vacuum. Markets offering odds on elections were presented as a more confident alternative, and their data began seeping into news stories.
Advocates further claim these markets harness valuable “insider information,” a notion Polymarket’s CEO has called “cool” despite its illegality. The mechanics often leave retail traders vulnerable; only a small minority of participants consistently profit, while a large number systematically lose money to better-informed counterparts. When news organizations partner with or feature these platforms, they effectively endorse a system where their audience can be exploited by insiders. This serves as free advertising for the prediction markets while undermining the news outlet’s own role. It commodifies information and directs audiences toward competitors who can pay for tips, a clear conflict with journalism’s traditional public interest mandate.
That mandate, to hold power accountable and reflect reality, is why many enter the field. Investigative work has uncovered major frauds and political scandals that regulators missed. Journalists are also expected to correct their errors. Prediction markets operate on a different incentive structure: they profit from transaction fees and volume, largely indifferent to whether a contract’s outcome reflects truth. Their primary interest is financial, not informational. Embedding these gambling mechanisms within newsrooms risks legitimizing them as a superior form of “news,” a cynical marketing ploy that may further blur the line for audiences between orchestrated media spectacles and actual events.
The embrace of this model by legacy and new media alike raises troubling questions. Is it a desperate revenue play, or a genuine confusion bred from a media landscape saturated with pseudo-events? This push risks eroding trust in trained, accountable journalists who specialize in documenting our world. There is a real danger that audiences will come to prefer the speculative “wisdom” of anonymous crowds over reported facts. Ultimately, news organizations that facilitate this shift are not evolving journalism; they are abandoning its foundational principles for a gamble.
(Source: The Verge)
