BUSINESS

CFTC blocks state bans as prediction markets bleed users

Saturday, May 9, 2026 · from 2 podcasts

A Venezuelan sergeant made $400k betting on Maduro’s capture, exposing systematic insider trading.
The CFTC is suing states to protect its jurisdiction, while resisting full platform oversight.
Over 70% of Polymarket users lose money; sharks take 67% of profits.

Prediction markets are failing their democratic premise. The numbers are brutal: over 70% of Polymarket users lose money, while 0.1% of accounts capture 67% of profits. On Kalshi, there are nearly three losers for every winner. These aren't gambling platforms; they're extraction engines.

The rot is insider trading. Analysis of Polymarket found bets on military actions had a 52% win rate, compared to 14% for the platform overall. A Venezuelan army sergeant allegedly pocketed $400,000 betting on the capture of President Nicolas Maduro. French weather sensors showed suspicious temperature spikes coinciding with betting surges.

"Betrayal is the new alpha. Market integrity is crumbling as 'information advantages' look increasingly like federal crimes."
- Kevin Roose, Hard Fork

On Breaking Points, Saagar Enjeti argues the platforms function exactly like casinos. Professional traders use algorithms to poach arbitrage from amateurs treating political events like sports parlays. The sharks eat the small fish before the event concludes.

Regulators are fighting over the carcass. The CFTC is suing states that try to ban prediction markets, claiming exclusive regulatory jurisdiction. Yet it simultaneously resists imposing full oversight, creating a regulatory vacuum. Brazil has blocked 27 sites, including Kalshi and Polymarket, following similar bans in France and Hungary.

"Without a 'big bad regulator' like the SEC to surveil these platforms, they will remain casinos for insiders rather than tools for truth."
- Casey Newton, Hard Fork

The house always wins. It’s just a very small house.

Regulation Markets

CFTC Kalshi Polymarket France

Source Intelligence

- Deep dive into what was said in the episodes

Hard Fork

Casey Newton

Can the U.S. Rein in Prediction Markets? + Joanna Stern on Her Year of A.I. Experiments + Our Producer Goes to Attention School • May 8

An army sergeant involved in capturing Venezuela's President Maduro allegedly made over $400,000 betting on prediction markets about Maduro's removal.
Analysis of over 400,000 prediction markets on PolyMarket found long-shot military bets had a 52% win rate, far above the platform's average 14% win rate, suggesting widespread insider information.
On PolyMarket, more than 70% of users lose money. At Kalshi, there are 2.9 unprofitable users for every profitable one, according to Wall Street Journal reporting.
The CFTC is suing states that try to ban prediction markets, claiming exclusive regulatory jurisdiction, while simultaneously resisting full regulation of the platforms.
Brazil has blocked 27 prediction market sites including Kalshi and PolyMarket for illegal gambling, following similar bans in France and Hungary.

Also from this episode: (6)

AI & Tech (4)

Joanna Stern argues AI wearables like the Humane AI Pin and Meta glasses show surprising progress toward persistent, on-body AI assistants, despite broader skepticism about humanoid robots.
Stern found AI tools like Pearl AI used in dentistry often recommend unnecessary, expensive treatments like deep cleanings, revealing a systemic problem of AI-driven upselling in healthcare.
Bloomberg research shows men are 22% more likely than women to be heavy AI users at work, while 61% of women expect AI to do more harm than good in their lives.
Stern used AI for editing and fact-checking her book but relied on a human editor for structural feedback, arguing AI lacked the ability to assess long-form narrative coherence.

Culture (1)

The Struthers School of Radical Attention runs exercises like paired speaking/listening and exhaustive environmental observation to retrain perception, framing non-commodified attention as a political act against big tech.

Psychology (1)

The school's 'radical imagination' seminar involved participants creating and inhabiting alternate personas to challenge internal constraints, with one attendee reviving her childhood persona 'Princess Lollipop' to cultivate playfulness.

Markets Regulation Agents Society Media

Breaking Points with Krystal and Saagar

5/5/26: Polymarket Exec Caught On Hot Mic, Fox Praises Eric Trump Corruption, MTG Says MAGA Is Dead • May 5

A Wall Street Journal analysis shows prediction market profits are concentrated: 0.1% of Polymarket accounts captured 67% of profits, netting nearly half a billion dollars.
Most users on prediction markets lose money. A CalSHI spokesperson said there are 2.9 unprofitable users for every profitable one. Sports betting has a roughly 5% account profit rate.
Prediction markets are ripe for insider trading. Analysis of Polymarket found long-shot bets on military actions have a 52% win rate, compared to 14% for all markets, indicating specialized knowledge.

Also from this episode: (5)

Politics (5)

Isaac Salf argues Trump's corruption is unprecedented, citing a crypto scheme where Trump sold a valueless meme coin and solicited White House dinners from top buyers, including foreign dignitaries.
Salf describes a pardon industry where Trump's associates take money to secure pardons. He notes the bulk of Trump's wealth now comes from crypto investments enabling this graft.
The Trump family uses its properties for graft. Isaac Salf notes eight foreign governments hosted events at Trump properties in his first year back, and the G20 summit will be at his Miami hotel.
Marjorie Taylor Greene claims Trump told her not to release Epstein files, saying his friends would get hurt. She says Trump later sent her texts blaming her for potential harm to her son.
Saagar argues Greene's defection is part of a larger backlash, akin to left-wing figures drifting right before 2024, creating a perception of MAGA losing its stalwarts.

Corruption Markets Elections Middle East

Source Intelligence

- Deep dive into what was said in the episodes

Hard Fork

Casey Newton

Can the U.S. Rein in Prediction Markets? + Joanna Stern on Her Year of A.I. Experiments + Our Producer Goes to Attention School • May 8

An army sergeant involved in capturing Venezuela's President Maduro allegedly made over $400,000 betting on prediction markets about Maduro's removal.
Analysis of over 400,000 prediction markets on PolyMarket found long-shot military bets had a 52% win rate, far above the platform's average 14% win rate, suggesting widespread insider information.
On PolyMarket, more than 70% of users lose money. At Kalshi, there are 2.9 unprofitable users for every profitable one, according to Wall Street Journal reporting.
The CFTC is suing states that try to ban prediction markets, claiming exclusive regulatory jurisdiction, while simultaneously resisting full regulation of the platforms.
Brazil has blocked 27 prediction market sites including Kalshi and PolyMarket for illegal gambling, following similar bans in France and Hungary.

Also from this episode: (6)

AI & Tech (4)

Joanna Stern argues AI wearables like the Humane AI Pin and Meta glasses show surprising progress toward persistent, on-body AI assistants, despite broader skepticism about humanoid robots.
Stern found AI tools like Pearl AI used in dentistry often recommend unnecessary, expensive treatments like deep cleanings, revealing a systemic problem of AI-driven upselling in healthcare.
Bloomberg research shows men are 22% more likely than women to be heavy AI users at work, while 61% of women expect AI to do more harm than good in their lives.
Stern used AI for editing and fact-checking her book but relied on a human editor for structural feedback, arguing AI lacked the ability to assess long-form narrative coherence.

Culture (1)

The Struthers School of Radical Attention runs exercises like paired speaking/listening and exhaustive environmental observation to retrain perception, framing non-commodified attention as a political act against big tech.

Psychology (1)

The school's 'radical imagination' seminar involved participants creating and inhabiting alternate personas to challenge internal constraints, with one attendee reviving her childhood persona 'Princess Lollipop' to cultivate playfulness.

Markets Regulation Agents Society Media

Breaking Points with Krystal and Saagar

5/5/26: Polymarket Exec Caught On Hot Mic, Fox Praises Eric Trump Corruption, MTG Says MAGA Is Dead • May 5

A Wall Street Journal analysis shows prediction market profits are concentrated: 0.1% of Polymarket accounts captured 67% of profits, netting nearly half a billion dollars.
Most users on prediction markets lose money. A CalSHI spokesperson said there are 2.9 unprofitable users for every profitable one. Sports betting has a roughly 5% account profit rate.
Prediction markets are ripe for insider trading. Analysis of Polymarket found long-shot bets on military actions have a 52% win rate, compared to 14% for all markets, indicating specialized knowledge.

Also from this episode: (5)

Politics (5)

Isaac Salf argues Trump's corruption is unprecedented, citing a crypto scheme where Trump sold a valueless meme coin and solicited White House dinners from top buyers, including foreign dignitaries.
Salf describes a pardon industry where Trump's associates take money to secure pardons. He notes the bulk of Trump's wealth now comes from crypto investments enabling this graft.
The Trump family uses its properties for graft. Isaac Salf notes eight foreign governments hosted events at Trump properties in his first year back, and the G20 summit will be at his Miami hotel.
Marjorie Taylor Greene claims Trump told her not to release Epstein files, saying his friends would get hurt. She says Trump later sent her texts blaming her for potential harm to her son.
Saagar argues Greene's defection is part of a larger backlash, akin to left-wing figures drifting right before 2024, creating a perception of MAGA losing its stalwarts.

Corruption Markets Elections Middle East

CFTC blocks state bans as prediction markets bleed users

Source Intelligence

Related Stories

CFTC blocks state bans as prediction markets bleed users

Source Intelligence

Related Stories