Finance experts didn’t see it coming, but prediction market apps like Kalshi and Polymarket are soaring in popularity in 2026. A Pew Research study showed that global trading volume on these apps has more than quadrupled between September 2025 and April 2026, jumping from $5 billion to $24 billion.
“What stands out to me is how many people are using these platforms,” said Erica Sandberg, consumer finance expert at BadCredit.org, which recently completed a survey on prediction market users. “They’re incredibly popular. And it doesn’t matter if people are losing or winning. They keep playing.”
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Prediction market apps allow users to place wagers on outcomes in sports (where legal), politics, and even pop culture events or the weather. The growth of these apps brings an increase in the financial risks associated. BadCredit.org found that 79% of prediction-market users lost money in the past year. More than one quarter (27%) lost more than $500.
Borrowing Money, Borrowing Trouble
Even more alarming, 51% of users surveyed said they used a credit card, personal loan, or other borrowed money to pay for their bets.
“That’s a lot of people,” Sandberg said. “That’s just not how it should be done. If you’re going to use these platforms, do it with spare cash, money you can afford to lose. Ten dollars here and there, if it gives you a little thrill, that’s totally fine.”
She used the example of betting an extra $50 you have that isn’t going toward groceries, bills, or debt. And go in with the healthy knowledge that you could lose that money.
“There is a strong potential to lose that cash,” Sandberg said.
Of the 51% of users who borrowed money to place bets, 88% lost, indicating another reason not to accrue debt to fund your prediction market habit. Not only could you lose the money, but you may have to pay interest on the money borrowed, placing you in an even deeper financial hole.
The Appeal of Prediction Markets
Part of the appeal – and the danger – of prediction markets is how easy they are to learn and use compared to other forms of gambling.
“It’s very easy to set up an account. It’s easy to place a bet. It’s easy to view the results. It’s on your phone. You don’t have to go anywhere,” Sandberg said.
The prediction markets also capitalize on people having strong opinions and a desire to put their money behind those opinions. “It makes you feel as if you have enough information to make an educated and safe bet. People have strong feelings about these things in the prediction market apps,” Sandberg said.
People also tend to focus on their wins, making these apps seem more enticing as a means of earning extra cash than they really are.
“Psychologically, we tend to remember our wins over our losses,” Sandberg explained. “And when we do win, we tend to tell other people. You get wrapped up in the wins, versus acknowledging the losses and that can be really damaging. You can also hear about other people who are doing well with these apps and wonder why you’re not.”
Why Do People Use Prediction Markets?
People turn to prediction markets for a variety of reasons. Alarmingly, in this economy, 44% are using them to make extra income, while 9% said they were struggling financially and needed another income stream. Just over one-quarter (27%) said they joined for entertainment or out of curiosity. Three percent said that traditional investing felt inaccessible. Sandberg emphasized the difference between traditional investing and day trading or “stock flipping,” which is more akin to gambling because of the risks involved.
“Investing means for the future, with incremental, slow, eventual growth. Investing shouldn’t give you that same feeling of excitement you get with gambling,” she said.
Investment firms like Vanguard allow you to invest in low-cost index funds starting with as little as $1, making the barrier to entry very low. Of course, you can still use prediction markets for fun, but don’t bet on funding your retirement with them.
“It’s not a job,” Sandberg stressed. “If you want to make some money, do those things that are guaranteed or at least, like investing, have a long history of showing positive returns in the long-term.”
Prediction Market Use by Age
Based on the survey, those in the millennial and Gen Z age brackets may be most at risk for financial loss losing prediction market apps. Nearly one-in-five Gen Z (39%) and nearly one-quarter (24%) of millennials used prediction markets, compared to 11% of Gen X and only 1% of Boomers. However, a smaller sample size of 50+ participants may have skewed these results. Even more revealing: More than 40% of both Gen Z and millennials believed prediction markets could realistically improve their financial situation.
Recognizing a Problem
Gambling can become an issue at any age. It helps to know the signs so you can recognize them in yourself or your loved ones, especially adult children who may be struggling financially and most at risk of turning to prediction markets as a possible solution.
“You don’t have to be a therapist to recognize the signs inside yourself,” Sandberg said. “Your heart races. You start to sweat. You become a little bit obsessive, constantly checking your phone and neglecting other activities. It can become an overwhelming feeling where you can’t get away from it, despite it having a negative impact.”
Watch for signs in your loved ones such as:
- Increasing credit card balances
- Collections calls
- Asking to borrow money without a good reason
- Trouble sleeping or waking
“There are so many signs you can be attuned to when it has gone from fun to something else entirely,” Sandberg said.
It may be time for a heart-to-heart talk with your loved one or even professional intervention, depending on how your loved ones respond to your observations and questions.
Final Thoughts
Ultimately, gambling, like many other vices, is part of our culture and not going away. It can become worse during times of economic turmoil. Prediction markets just represent the latest form of betting.
“The opportunities are always out there,” Sandberg said. “I was walking down the streets in downtown San Francisco the other day and I stopped for a moment to watch a traditional dice game. Gambling… has been with us forever.”
She continued, “Most people can keep it together. But you should recognize the signs when someone, whether that’s yourself or a loved one, is overdoing it.”
