Science Journal Urges Research Community To Confront Prediction Markets’ Political and Public Health Risks 

When a US federal court ruled in 2024 to allow commercial prediction markets to offer event-based political contracts, it marked the beginning of a “stark” shift, according to a recently published Science Journal Policy Forum. 

As authors Nizan Geslevich Packin and Sharon Rabinovitz recount, until that point, economists and data scientists had championed academic and institutional prediction markets as “elegant instruments of collective intelligence.” 

But while academic and institutional efforts have maintained “research-oriented forecasting purposes,” today’s broader prediction market landscape includes “gamified, large-scale digital trading platforms.” These commercial operations, which enable global “continuous, real-time participation,” are optimized for engagement rather than active truth-seeking, they argue. 

Despite this, they say contemporary discourse primarily refers to commercial platforms rather than their academic counterparts. Meanwhile, commercial advocates often “claim scientific credibility while flouting the very principles and evidence on which that credibility depends,” according to the authors.

Here’s Packin and Rabinovitz:

Though PMs may not have already produced documented population-level harms equivalent to gambling, their structural features and rapid institutionalization warrant precautionary scrutiny. Addictive design, vulnerable users, and permissive regulatory environments are a well-established formula for population-level harm.” 

Researchers, they add, bear responsibility to help “distinguish controlled, ethical research from commercial exploitation.”

“Otherwise, silence from the scientific community could help legitimize prediction market systems that seek to appropriate science’s credibility while violating its principles.”

Markets Pose ‘Underappreciated’ Threats to Political Integrity

In the article, the authors, who have ties to various institutions, including City University of New York (Packin) and the University of Haifa, Israel (both), pinpoint three areas of concern tied to the structural features of commercial prediction markets and their rapid institutionalization.

• Democratic manipulation
• Gambling-like design
• Public health concerns 

In the first case, they argue prediction markets “pose underappreciated threats to democratic integrity,” including electoral manipulation and insider trading.

Thin liquidity (low trading volume and few participants) means “even small trades can substantially shift prices and manufacture the appearance of consensus,” they say.  This vulnerability, they add, influences political expectations, “turning electoral ‘forecasts’ into instruments of influence rather than collective judgment.”

As a result, “concentrated actors can cheaply shift probabilities.” Potentially, they say this could shape “voter perceptions, expectations, campaign donations, and media coverage in self-reinforcing cycles.”

At the same time, financial platforms and mainstream media are displaying real-time prediction odds, including markets on election probabilities, geopolitical escalation, or armed conflict. Offering these odds alongside standard economic indicators lends them an appearance of objectivity rather than identifying them as possibly manipulable signals of speculative probabilities, they argue.

They also highlight the possibility of insider trading, money laundering, counter-terrorism, and manufactured market risks.

When arson, market manipulation, or geopolitical provocation becomes profitable, PMs cease to function as price discovery tools and become instruments of manipulation, distorting rather than reflecting reality.”

Predictions Platforms Mimic Gambling, Reduce Friction

Growing evidence, the authors explain, connects trading platforms to addictive behaviors and increased problem gambling rates among high-risk and day traders.

Yet, while mainstream retail trading apps have largely dialed back gamified features amid public criticism and regulatory interest, prediction markets have not.

Prediction markets, they write, “exhibit many structural and functional similarities to online gambling.”

At the behavioral level, platforms deploy dark patterns (deceptive design elements) and nudges (prompts exploiting cognitive biases) to drive engagement and impulsive trading. Platforms like Polymarket, Futuur, and Manifold exhibit distinct characteristics mirroring high-intensity gambling features: autoplay functions, countdown timers, celebratory visual feedback, leaderboards, streak-based bonuses, loot-box–style token rewards, and algorithmically timed prompts. Variable-ratio reinforcement through unpredictable celebratory animations and token rewards exploits the same psychological mechanisms as highly addictive slot machines.” 

These designs, they add, “turn forecasting into continuous play, and instant loss-chasing. Users trade not only money or data but also the fleeting sensation of foresight.”

Kalshi’s sports-dominated trading volume only underscores the shift from forecasting to entertainment betting, the authors state.

Traditional casinos, they note, come with inherent frictions, such as travel requirements, age verification, banking delays, and visible spend. Meanwhile, online prediction markets remove these hurdles while introducing new risks that are “amplified by push notifications, pop-ups, and streak bonuses that reward continuous participation.”

The authors also call out the industry’s habit of “terminological washing,” which involves using terms like “forecasting” instead of “betting.” This practice allows participants to perceive themselves as analysts or engaged citizens rather than gamblers.  This distortion, they argue, “distinguishes PMs from traditional gambling, where stigma, however flawed, can trigger self-reflection.”

Markets Hold Implications for Public Health

This “legitimization as forecasting tools,” they argue, may have wider implications for public health.

They write: 

Prediction markets self-framing as investment or civic participation suppresses stigma-driven self-restraint, disproportionately affecting youth, financially inexperienced users, and economically marginalized groups, for whom engagement recasts financial stakes as civic engagement or identity expression, offering illusory democratic influence.” 

Regulatory ambiguity, cultural normalization, and a dense marketing ecosystem act together, they add.  This interplay sets the stage for harm. 

“Social validation loops, financial influencers, and algorithmic campaigns normalize continuous engagement and generate fear of missing out, herd dynamics, and competitive pressure. Media integration embeds wagering directly into information-seeking and social behavior.”

They note that the “prevention paradox” holds that “most population-level harm” occurs among those below clinical thresholds. In many cases, those affected are either ineligible for help or unlikely to seek it. 

Here, the authors remind the reader of what’s at stake if we wait to address the public health implications.

The lag between tobacco popularization and scientific consensus on its harms enabled millions of preventable deaths. The delay between social media proliferation and recognition of its health consequences may have left generations as unwitting experimental subjects. We face a similar moment. Many PM features are shared with trading, gaming, gambling, social media platforms, and various apps. However, prediction markets sit at a distinctive intersection: They intensify techniques pioneered by those industries, apply them to socially and politically salient content, and wrap them in the epistemic authority of ‘forecasting.’This convergence of features, rather than any single element, distinguishes PM-related risks and warrants dedicated public health attention.” 

Research, they argue, should prioritize long-term study of the behavioral impact and addiction trajectories of prediction market users.

“Even if only 2 to 3% of users develop behavioral disorders, widespread dysfunction across millions of occasional users could generate public health costs rivaling gambling’s documented burden.”

Window To Act Closing, Researchers Have Responsibility To Speak Up

This public health risk, they argue, “flourishes through systematic regulatory failure.” And prediction markets function as “regulatory entrepreneurs.” 

In the US, this strategy exploits jurisdictional fragmentation: Gambling is state-regulated, whereas financial contracts tied to future outcomes fall under the Commodity Futures Trading Commission (CFTC). By characterizing contracts as financial instruments, platforms claim federal preemption, evading state gambling and consumer-protection laws.”

This arbitrage, they explain, has caused legal chaos. 

At the same time, they argue that prediction markets’ social legitimacy comes mainly from the appropriation of scientific credibility. Once validated through rigorous scholarship, the “wisdom of crowds… now provides rhetorical cover for commercial platforms bearing little resemblance to research contexts.”

The scientific community, they add, must set boundaries between “legitimate experimental contexts and commercial exploitation.”

Scientific silence grants legitimacy to systems exploiting science’s reputation while violating its principles. A public health approach reframes prediction markets’ risks as predictable outcomes of environmental design, analogous to tobacco control’s success in treating smoking as population-level exposure rather than individual vice.”

Having helped create these markets, they argue the scientific community is responsible for “articulating their limits and grounding future oversight in transparent, prospective, evidence-based research.”

Wrapping up, the authors float several policy interventions to address prediction platforms’ design, market transparency, and regulatory architecture. Suggestions include mitigating addictive design features, increasing transparency, establishing independent oversight, and replacing self-regulation with rule-based oversight.

 Prediction markets, they conclude, stand at a crossroads. And the time for action is short.

Ethically designed, they could enhance decision-making; as currently deployed, they risk behavioral and democratic harms. The window for precautionary action is closing: Each week of billion-dollar PM activity, integrated into core information infrastructure without oversight comparable to that of regulated gambling, prolongs a large uncontrolled experiment on users.”