Wanna bet?

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  By Guest Blogger Doug Rowat

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Bad Bunny aside, last week’s Super Bowl was a dud. I should have heeded the prediction-market betting, which early on pegged the Seahawks as a massive favourite, and switched to the Olympics.

But a Seahawks win wasn’t the only thing that the prediction sites were allowing me to put my money on. They were also allowing wagers on everything from whether the US would attack Iran during the game to whether Patriots wide receiver Stefon Diggs would propose to singer Cardi B after it was over (alas, they broke up instead).

But the number (and specificity) of these possible bets reflect the skyrocketing popularity of real-world prediction markets. Prediction markets now let ordinary people bet on the outcome of an ever-growing variety of future events. It could be who will win the most gold medals at this year’s Winter Olympics (Norway’s the favourite) or even whether Trump will pardon Ghislaine Maxwell by year-end (a 10% chance).

The two biggest players in the prediction-market space are Polymarket and Kalshi, with each attracting billions in online betting annually and themselves having valuations estimated in the billions. Polymarket last year helped Shayne Coplan become one of the youngest self-made billionaires ever at age 27. Some analysts predict (no pun intended) that the prediction industry overall will reach a more than US$95 billion valuation by 2035, growing annually at a nearly 47% clip (https://certuity.com/insights/prediction-markets/).

And evidence is mounting that the implied predictions these sites are making based on the collective wagering may have forecasting power, particularly in the political space. While traditional polling focuses on asking individuals who they intend to vote for, they seldom ask who individuals think will win. Forbes nicely sums up the switch that occurs when prediction markets are utilized:

In surveys, people posture. In public, they perform. On social platforms, they signal identity. But in a prediction market, incentives reverse: accuracy is rewarded, noise is punished, and wishful thinking becomes expensive.

This dynamic creates a discipline rarely seen in public life. Research from the University of Pennsylvania and the Iowa Electronic Markets shows that prediction markets often outperform expert forecasters because they aggregate dispersed information without ideology, public pressure, or narrative inertia.

Basically, nothing generates clearer thinking than real money being put at risk. In addition to the research cited by Forbes, analysis from Vanderbilt University has reached similar conclusions.

Vanderbilt, for example, noted that Polymarket “was superior to polling in predicting the outcome of the 2024 presidential election, particularly in swing states.” And more recently, the prediction sites were much quicker than the pollsters to realize that Zohran Mamdani had a better chance of securing the Democratic New York City mayoral nomination than Andrew Cuomo.

Prediction markets, of course, also allow for betting on stock market results and this further raises the question of whether crowd-sourced insights are useful for investors. Does the prediction markets’ ability to absorb information faster than, say, traditional analysts allow these markets to generate more accurate forecasts? An analyst might wait weeks for the release of the latest US inflation data, for example, but the prediction markets might have gleaned perspective on this data much sooner.

The prediction markets are also still relatively shallow, so big, anomalous wagers can noticeably tilt the odds. Such anomalies might reveal insider information, for example, and indeed there was an investigation conducted last year into the usual betting activity on Polymarket related to the winner of the Nobel Peace Prize. These anomalous signals could prove useful for investors, though as the prediction markets grow, or potentially become more regulated, such signals could become less reliable.

However, political forecasting aside, more information’s still needed to determine how reliably prediction sites actually anticipate final results on a broader scale. Polymarket, for example, has only been around for five years, so there’s simply not enough history to determine its accuracy. Further, some of the possible bets offered on these sites are so fantastical that we’ll never truly know if ‘the crowd’ lends any insight. Last year, for example, betting against the return of Jesus Christ turned out to be profitable, but does this have any bearing on the odds this year? Of course not.

Maybe this year?

Source: Bloomberg

Prediction markets may eventually evolve into reliable forecasting tools, but they’re in their infancy, and whether they reflect the wisdom (or the madness) of the crowd is still an open question.

That being said, below are the current Polymarket odds of the Canadian men’s hockey team winning Olympic gold.

Team Canada: gold medal favourites

SOURCE: Polymarket

Who am I to argue with Polymarket labelling Canada the favourite? Jesus might not yet have landed back on Earth, but McJesus has landed in Milan.

LFG Canada.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

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About the picture: “We went for a walk in Butchart Gardens yesterday and Ziggy took advantage of a handy water source from the bronze boar there,” writes Llyod. “Some coolish days in Victoria this winter but nary a snowflake.  Lots of places for sale here but please put out the notice that “Victoria sucks – tell your friends”. Keep up the diligent work – the continued wisdom of a balanced, diversified portfolio continues to be prudent. 

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/14/wanna-bet/