Brian Kahn writes:

On June 11, Kalshi released a buzzy ad featuring noted New York Knicks fan Timothée Chalamet. It was a zeitgeist-capturing moment for prediction markets, akin to the 2022 Super Bowl, when seemingly every commercial featured a celebrity shilling crypto.

Yet when I brought Chalamet’s spot up with attendees at Manifest, a recent festival for prediction markets, I was mostly met with blank stares. These conference goers—a mix of academics, startup founders, job seekers, and players in the markets—hadn’t even heard about it. They were too busy thinking about the bigger picture and the risks facing markets.

Their confusion was the perfect encapsulation of a battle that I observed again and again that weekend: The way forecasting philosophers see the markets (tools for the greater good) is very different from how the vast majority of the world sees them (a way to bet on sports).

“We were all waiting for so long to be in the world we’re in now,” Dan Schwarz, the cofounder and chief executive officer of FutureSearch, an artificial intelligence research and prediction startup, tells me. But the platforms have run into problems, from insider trading to sports contracts that, Schwarz worries, are fueling addiction. To outweigh these harms, “prediction markets would have to deliver a lot more value than they are now.”

The prognosticators, it turns out, are concerned that the very thing that’s made prediction markets a global phenomenon could be their undoing. [Continue reading…]