Vices and addiction can be a sensitive topic, particularly where college students are concerned. Despite our newfound responsibilities, it’s important to remember that at our core, we’re still young, underdeveloped, impressionable people living in an age of turmoil. What if there were companies attempting to take advantage of our youth? What if they were using the fact that we’re so prone to these addictions against us and bending the law to suit their needs?
There are.
Lying in wait in online app stores are prediction market apps trying to get our entire generation hooked on gambling the same way we’re addicted to our phones, continuously extracting money from society’s most vulnerable. Platforms that go beyond ordinary sports betting. Platforms like Kalshi.
Kalshi, Polymarket and other prediction market platforms have grown immensely popular in the last year, with Kalshi boasting over three million downloads in the United States in January alone.
Since their launch, apps like these have become a mainstay at college campuses and I’ve scarcely been to an event or gathering at the University of Massachusetts without a group of students huddled around a prediction graph. I use the term gambling because, to too many observers, including myself, Kalshi and apps like it facilitate exactly that, despite statements by CEO Tarek Mansour to the contrary. A closer look at how these apps work and who is using them calls Mansour’s statement into question and reveals their exploitative intentions.
I’m not advocating for the pitfall that is legislating gambling as a whole, but the apps are a unique case where the people facilitating it are clearly overstepping their bounds. The crux of this issue is twofold.
One aspect is the lengths Kalshi and Polymarket staff go to make gambling accessible. By using the app, one will have instant access to markets everywhere, able to mount ludicrous sums of money on parlays they have little chance of winning with the tap of a few buttons.
But the dopamine rush achieved by succeeding only once with such little effort is strong; it ensnares users, compelling them to continue gambling, slowly digging themselves into a pit they can’t crawl out of. Unlike a casino, it’s not a place. It’s with its users wherever they go. People using the app gamble at home, on the bus, at work, or before they go to bed. Imagine losing ten dollars upon checking your phone every morning. Situations much more dire than that have become a reality for some. It’s exactly what one would expect from an industry that profits from addiction.
Yet, it’s not its addictive nature that presents the greatest risk, but the way these apps leverage vast resources toward an aggressive marketing campaign to younger audiences. Observers note that trading volume reflects strategies that target younger demographics, specifically college students, a strategy that harkens back to the immensely successful JUUL ads that hooked Generation Z on vaping.
Even before I began attending UMass, Kalshi had found its way onto the phones of my peers thanks to its promotion on social media. Peers who I knew for a fact didn’t have the money for daily sports betting. When high school ended and I began spending time with different people over the summer but betting apps would follow me everywhere I went. At times, they seemed as ubiquitous as AI apps like ChatGPT, a testament to how successful the endeavor has proven. Sure enough, as soon as I began attending UMass, the already frequent appearances of Kalshi began to proliferate more and more. Adverts are also beginning to appear on our televisions, introducing the apps to students trying to relax in dormitory lounges, for example. When people our age are struggling to stay afloat financially, pushing an app that lets you gamble anywhere is irresponsible at best, and straight-up predatory at worst.
It’s already begun to take its toll. Over 70% of Polymarket’s users report losses while a mere 0.04% net the same percentage of profit, according to recent statements by blockchain analyst DeFi Oasis. Another bombshell dropped by Jordan Bender at Citizens CFG suggests the bottom 25% of users lose 28 cents on the dollar on prediction markets– compared to the 11 cents lost gambling traditionally.
Thus far, all instances of proposed legal action have fallen through. Prediction markets circumvent state gambling bans via a technicality: they’re simply a marketplace for legitimate products. A two-week ban on Kalshi in the state of Nevada was the closest we’ve come to legislating these markets and any good that could have been done has surely withered away by now.
So, what is there to do? Are we meant to do nothing while gambling addiction grabs our peers in its vice? I don’t quite know where this will go, but if I were a betting man, I’d say nowhere good.
Luke Rakowsky can be reached at [email protected].
