TORONTO – Prediction markets are experiencing a surge in popularity, processing billions of dollars in daily trades, according to a CBC News broadcast. These platforms allow users to trade on the outcomes of events ranging from sports and politics to the weather and even war.

Users interviewed by CBC News reported significant gains, with one American user stating they made approximately $200,000 in the past year. However, losses are also common, with another user reporting losing several thousand dollars. Experts are raising concerns about the addictive nature of these markets and their potential for real-world harm.

“I would classify this as another form of a gambling product,” said Andrew Kim, a licensed clinical psychologist and addiction researcher, during the broadcast. He noted the structural similarities between prediction markets and traditional gambling.

Major companies, including the NHL, Major League Baseball, Pro Soccer, and CNN, have partnered with prediction market platforms like Calci and Polymarket. The two major platforms processed $17 billion U.S. dollars in trades in January alone.

Concerns about potential manipulation have also surfaced. A Polymarket account, “MAGA My Man,” reportedly made $515,000 on a single trade related to the Iran strike just 71 minutes before the news became public. Both Kalshi and Polymarket have since banned insider trading.

In Canada, short-term binary options, similar to those offered on prediction markets, are largely prohibited under a 2017 ruling. However, users can circumvent these restrictions using VPNs. Fintech company Wealthsimple recently received approval to operate a limited prediction market in Canada, with restrictions on contracts related to elections, political events, unlawful activities, and those under 30 days.

Werner Antweiler, a researcher at UBC, cautioned that large bets on these platforms could influence market prices and potentially sway the outcome of events, opening the door to influence peddling and manipulation.

Regulatory pressure is mounting. U.S. lawmakers have introduced a bill to ban sports event contracts and casino-style games on prediction markets, and Arizona’s attorney general has filed criminal charges against Kalshi for operating an illegal gambling business. Polymarket has announced increased efforts to crack down on insider trading, and Calci is preemptively blocking sports figures and politicians.