You may have registered to vote, but have you filed your bets?

There’s a new wave of fintech start-ups—Polymarket, Kalshi, PredictIt—that want to turn betting on the outcome of an election or a war as easy as ordering Thai food. And if the 2024 campaign cycle is an accurate indicator, a potential bull market bonanza awaits.

With the spread of sports gambling apps, it seems like almost anything can be turned into a prop bet. On the industry-leading Polymarket, the prediction market where more than $1 billion has been bet on the outcome of the November presidential election, there are dozens of Donald Trump–related gambles to choose from. More than $2.2 million has been bet on whether Trump will go to prison for his hush-money conviction before the November election. (He won’t.) About $52,000 was wagered on whether Trump would say “Loomer” at a rally in North Carolina. (He didn’t.) It gets pretty obscure pretty fast, but the odds are there if you want to take them.

If you are not a gambler or someone with a purely quantitative view of the world, this prospect of an internet overflowing with real-time bets of varying odds and import may seem rather grim. Because, while some of this stuff is just plain silly—you can bet if Trump will say “Loomer” at his next rally—politics is sometimes about irreconcilable disagreements and material struggle. The stuff of life. Now it’s a terrain to be mined for smartphone gamblers. If nothing is free from the cold logic of the market, can some things at least be free from the rigged conditions of the casino?

The answer may come down to regulators, who have questioned the legality of offering Vegas-style odds connected to real-world events. Earlier this month, a US District judge ruled that Kalshi could sell to US customers—which might have opened up the wider market to Polymarket and to anyone else wanting to gamify political life. Gamblers, crypto speculators, day traders, political junkies, and the fintech industry rejoiced at the Kalshi ruling. Here was a potentially huge revenue source for companies offering Americans novel ways to bet on the outcomes of anything from the Oscars to a hurricane. But on September 12, a federal appeals court put a hold on the Kalshi ruling, pausing the political gambling dream for now. Americans will have to wait a bit longer before they can legally bet on political events.

In the meantime, prediction markets and events betting are on the verge of becoming cultural fixtures, at least for people for whom politics is a sport. Polymarket odds are now reported alongside more established opinion polls as supposedly reliable indicators of public sentiment. In August, Bloomberg started including Polymarket odds in its terminal service as a tool for political analysis. This is all to say that betting markets have been able to capitalize on the press’s obsession with the political horse race and widen the public’s appetite for wagers of all kinds, presenting themselves as an innovative tool to measure the electorate’s pulse.

Event-betting markets can be fascinating, intellectual exercises and have produced a rich body of economic scholarship, though not all markets are built alike. They can be sharp-elbowed, offshore gambling dens, or nonprofit experiments that model event outcomes. Some are run by academics, like the Iowa Electronics Markets, which has operated as an educational initiative for 25 years. Others, such as the Good Judgment Project, occupy the role of something like an informational consultancy.

Economists have studied prediction markets as a potential manifestation of the so-called wisdom of crowds, wringing collective insight from masses of free market actors. The George Mason University economist Robin Hanson has conceived of a form of government—called “futarchy”—that relies in part on data from prediction markets to inform policies. Indeed, in pockets of academia, corporate consulting, and, of course, Silicon Valley, prediction has become something approaching a science, building on an almost mystical vision that any earthly phenomenon might be quantified and accurately forecast.

At the same time, prediction markets pose a host of legal, economic, and moral concerns. Like former Cincinnati Reds manager Pete Rose betting on baseball, betting on an event tied to one’s work or personal interests can easily cross ethical lines. Writer and polling expert Nate Silver—who recently published a book about risk and the ways gambling has pervaded the culture (largely for the better, in his view)—took a job this year with Polymarket. Silver’s polling analysis may not directly move voters, but they do inform news coverage, and they may in turn affect movement in odds or betting activity on Polymarket, which itself is funded by right-wing venture capitalists such as Naval Ravikant and Balaji Srinivasan, along with similar-minded VC firms like Founders Fund, whose cofounder, Peter Thiel, supports Trump. (Silver did not respond to a request for comment.)

Seen that way, Polymarket becomes a strange, almost quantum entanglement of political interests and market forces—and a reminder that, in practice, we don’t know much about how these betting markets operate. They could provide ample new possibilities for fraud, market manipulation, or somehow ensure that a bet resolves in one’s favor. The bankrupt crypto exchange FTX, for instance, ran a 2020-election-predictions market, which now imprisoned fraudster Sam Bankman-Fried described as a “surprisingly strong” onboarding funnel for new customers (whom he could later fleece).

It begs the question: Do betting companies gamble in their own markets as so many crypto exchanges, like FTX, have been caught doing? Are bad actors capable of manipulating betting odds or Polymarket’s automated market maker? I asked a couple of blockchain analysts if they knew of any studies of Polymarket or crypto-powered events-betting markets and came up empty.

There are more principled reasons for why we might not want to turn over some parts of life to the brutal volatility of gambling. After all, there’s a sense in which event-prediction markets can feel like trading in people’s lives.

In 2001, the Defense Advanced Research Projects Agency, under John Poindexter’s Information Awareness Office, sponsored the development of something called the Policy Analysis Market, which has been described as a futures market for trading in geopolitical risk. When its existence was publicly revealed in 2003, Democratic politicians denounced it as a market for betting on terrorism. Senator Tom Daschle called it “an incentive actually to commit acts of terrorism.”

“Trading on corn futures is real different than trading on terrorism and atrocity futures,” said Senator Ron Wyden at the time. “One is morally fine and represents free enterprise, and the other one is morally over the line.”

The program was canceled. But people involved with it, like Robin Hanson, have since insisted on its potential utility. “We planned to forecast military and political instability around the world, how U.S. policies would affect such instability, and how such instability would influence U.S. and global aggregates of interest, such as growth rates or oil prices,” Hanson later wrote. He argued that Democratic senators wanted to score points against the George W. Bush administration, while a sensationalist media had misrepresented what PAM was about. “Why did decision-makers feel that a research agency such as DARPA should not conduct research to see whether speculative markets might be useful in government intelligence?” Hanson asked.

Some in the military and intelligence establishment agreed. “Prediction markets can substantially contribute to US Intelligence Community strategic and tactical intelligence work,” wrote Puong Fei Yeh, an intelligence consultant, in an article lamenting PAM’s demise that appeared in Studies in Intelligence, a journal published by the CIA.

History gives us reason to worry, as Wyden and Daschle did, that some on the extreme political fringe would use betting markets to sow chaos. In the early 1990s, Jim Bell, a far-right libertarian writer active on cypherpunk mailing lists, wrote a series of essays outlining what he termed “assassination politics.” Cobbling together recent ideas about encryption, digital cash, and decentralization, Bell proposed a system where people could be awarded prizes for correctly “predicting” the deaths of people who appeared on “a list of violators of rights, usually either government employees, officeholders, or appointees.”

In practice, Bell wrote, this would amount to placing bounties on corrupt public figures, who would then be killed by assassins who could anonymously collect the bounties through the magic of encrypted digital money. In Bell’s bizarre interpretation of the law, this was all legal. It was even utopian, ensuring that politicians maintained good behavior—according to Bell’s rigorously narrow ideological standards. “No longer would we be electing people who will turn around and tax us to death, regulate us to death, or for that matter send hired thugs to kill us when we oppose their wishes,” wrote Bell, who later went to jail for tax evasion and was also convicted of stalking a federal agent. He even thought that this market could be turned on foreign leaders, rendering them peaceful and compliant.

Today, we might call Bell’s proposal a market for stochastic terrorism. Fortunately, his design hasn’t been enacted yet, but the social and political dynamics he invoked—the ultra-cynical faithlessness in democratic politics; the “won’t someone rid me of this troublesome priest?” will to violence—can now be found on social media, where nihilistic mobs, sometimes stoked by politicians and CEOs, call for the deaths of public figures every day. (On Manifold, a prediction market with ties to the effective altruism movement, you can bet on whether there will be a third assassination attempt on Trump.)

Bell’s essay endures as a troubling radical-chic artifact of an earlier era when digital money and a fundamentalist faith in markets made some cypherpunks think a revolution was at hand. The new prediction markets are more civilized enterprises, allowing users to bet on the outcome of violence, without ostensibly encouraging it. But their promoters—many of whom evince an ideological attachment to cryptocurrency and its promise of libertarian emancipation from the messiness of politics—share a similar faith in markets as expert modelers and predictors of human behavior. And the god-like desire to predict the world, from DARPA-funded research labs to Jim Bell’s lawless assassination politics to the news-driven gambles of Polymarket, remains the same.