More Perfect Union Investigation Exposes Prediction Markets Polymarket and Kalshi

A Partnership Pitch That Turned Into an Exposé

American media outlet More Perfect Union (MPU) has released a video investigation into prediction market platforms Polymarket and Kalshi. The piece was sparked by Polymarket's proposal to integrate its odds into MPU's reporting. Instead of accepting the partnership, the newsroom chose to scrutinize the platform's business model and the public claims of its CEO, Shayne Coplan.

The journalists' central conclusion: prediction platforms exploit Americans' economic anxiety under the guise of "democratizing finance."

Prediction Accuracy Falls Short of Claims

MPU cited research from Vanderbilt University examining the 2024 U.S. elections. According to the study, Polymarket's prediction accuracy was just 67%, while Kalshi came in at 78%. The older platform PredictIt significantly outperformed both, achieving 93% accuracy.

The journalists noted that Coplan had appeared on 60 Minutes, describing prediction markets as "the most accurate tool that humanity has at this point."

The investigation also highlighted a U.S. jobs report from February. Prediction market participants forecast a gain of 60,000 jobs, but the actual figure diverged by 150,000 — casting doubt on the so-called "wisdom of crowds" that these platforms claim to harness.

Why This Matters

Prediction markets have become a prominent phenomenon at the intersection of crypto and traditional finance. Both Polymarket and Kalshi position themselves as reliable information sources, claiming to complement or even surpass traditional polls and media. The MPU investigation challenges this narrative with academic data and input from sitting lawmakers. Should regulators reconsider their approach to these platforms, the impact could ripple across the entire prediction market sector, including crypto-native projects built on similar models.

Insider Trading: A Feature, Not a Bug?

Economist Robin Hanson, widely regarded as one of the intellectual architects of modern prediction markets, stated in the MPU video that insiders on these platforms are the norm rather than the exception.

Senator Chris Murphy told MPU that prediction markets tied to government decisions are inherently unfair. He argued that all bets on government actions are rigged because someone within the government knows the outcome. Murphy maintains that contracts where thousands of people already know the result should not be traded at all.

In March, both Kalshi and Polymarket announced new measures to combat insider trading. However, experts interviewed by MPU expressed skepticism that the platforms can effectively monitor tens of thousands of potential insiders across all market types — ranging from video game releases to Spotify streaming statistics.

Profit Concentration: 0.04% of Traders Take 70%

According to data cited in the investigation, a mere 0.04% of traders capture approximately 70% of all profits on prediction markets. A report from Citizens Bank found that customers of these platforms lose more money in their first three months of trading than users of traditional sportsbooks.

Dustin Gouker, a journalist and author of The Closing Line newsletter covering the U.S. gambling industry, revealed that 85–90% of Kalshi's volume comes from sports betting, while at Polymarket the figure is around 40%. Gouker characterized the activity as gambling regardless of how the platforms brand themselves.

Regulatory Gaps and Lobbying Power

Federal oversight through the Commodity Futures Trading Commission (CFTC) exempts prediction platforms from state-level taxes and player protection requirements. By contrast, sportsbooks in New York face a 51% tax rate and are required to implement responsible gambling tools.

This regulatory asymmetry has already triggered legal battles. Kalshi has been sued by more than a dozen states seeking to classify its operations as unlicensed gambling. Despite this, the CFTC has maintained the platforms' current regulatory status. Both Polymarket and Kalshi count Donald Trump Jr. as a strategic advisor.

The MPU investigation also flagged a free grocery store that Polymarket opened in New York in February. Journalists visited the location during filming and described the initiative as a marketing ploy designed to draw Americans toward a gambling platform.