Prediction markets have a fake news problem
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Prediction markets have emerged as an unlikely engine of viral misinformation, pumping out false, misleading and context-free claims to millions of people on social media.
Why it matters: Once a niche corner of crypto and gambling cultures, these platforms have rapidly become a central force in how politics, media and global crises are understood in real time.
- Kalshi and Polymarket, the two dominant prediction markets, have pushed deep into the mainstream, striking a vast web of media, sports and influencer partnerships as their valuations have soared.
- The problem: Their social media accounts face few of the rules or norms that govern journalism, even as their posts can spread faster — and reach farther — than verified reporting.
That's particularly true of Polymarket, which was barred in the U.S. until last year.
How it works: Kalshi and Polymarket represent a new generation of digitally native companies, shaped far more by the culture of X and crypto than by traditional media and finance.
- That online fluency has helped fuel explosive growth: Both platforms now handle billions of dollars in weekly trading volume and are fixtures of X's "For You" algorithm.
- But it's also pulled them toward engagement bait — content designed to spark outrage, tribal reactions or rapid sharing, even when facts are thin or context is missing.
Zoom in: That engagement-first approach is increasingly at odds with how prediction markets present themselves — as responsible, regulated platforms that claim to cut through the noise.
- That tension was on display this month when Polymarket falsely attributed a "JUST IN" quote to Jeff Bezos — prompting a rare public denial from the Amazon founder on X.
- Polymarket, which has ties to Trumpworld, has repeatedly targeted MAGA adversaries — including New York City Mayor Zohran Mamdani and Rep. Ilhan Omar (D-Minn.) — with false, misleading or trollish claims.
Amid the chaos over immigration raids in Minneapolis, Polymarket's X account claimed President Trump had deported so many people from Minnesota that the state was projected to lose a congressional seat after the next Census.
- Polymarket later deleted the misleading post — seemingly based on a Substack headline from a conservative commentator — but not before it had been amplified by the Department of Homeland Security.
Zoom out: Both prediction markets have pushed unverified claims about global crises — a particularly sensitive arena, given the controversy over potential insider trading tied to the U.S. capture of Nicolás Maduro.
- In one case, Polymarket claimed Iran's regime had "lost control" of Tehran during a nationwide communications blackout, when independent reporting on the protests was virtually impossible.
- During the frenzy over Trump's Greenland threats, Kalshi falsely suggested the U.S. and Denmark were in "technical talks" to buy the island. Denmark clarified that the talks concerned Arctic security, and Kalshi deleted the post.
What they're saying: "We believe in data as a strong complement to the news. Sometimes (rarely) when moving fast, we rely on sources that aren't accurate," Kalshi spokesperson Elisabeth Diana told Axios.
- There is a stark difference between getting, say, three posts wrong in the hundreds we put out vs. blatantly and chaotically making up news for 'fun' and engagement," she added.
- Polymarket did not respond to a request for comment.
Between the lines: Kalshi is regulated by the Commodity Futures Trading Commission, while Polymarket's most active exchange operates outside U.S. oversight — a distinction Kalshi has stressed as it pursues greater legitimacy.
- Even so, critics note that regulation of trading activity does not address how prediction markets function as viral "news" sources online.
- Both platforms have worsened the problem by handing out "affiliate badges" to X influencers — including fake "sports insiders" who spread false or satirical news under the veneer of credibility.
- "Badges are like bumper stickers or team logos — accounts show brand affinity, but they're not acting on our behalf. As a policy, we revoke badges that promote hate speech or misinformation," Diana told Axios.
The bottom line: Prediction markets promise clarity in a world of fragmentation and AI slop. But when they try to act as authoritative "news" sources, the noise only gets louder.
