David Marcus writes in Fox News that prediction markets are democratizing inside information — now anyone can be an insider trader, and there’s something troubling about that. He’s right that the markets are a problem, but he’s got the problem backwards. The scandal isn’t that ordinary people might finally get to play the game the insiders have played since markets were invented. The scandal is that we’ve built an economy where betting on events has become a more reliable path to solvency than participating in events, and the people who will profit most from that are the same people who profit from every casino. The house always wins because the house writes the rules, and the house is already writing these.
Consider the Senate’s own action on this matter. As Marcus mentions in passing — in the chyron under a video, the editorial equivalent of a stagehand fixing a flat — the Senate just voted to ban its members and aides from betting on prediction markets. The Senate did this because the Senate knows that the people closest to the information are the ones most likely to abuse it. Marcus treats this as background noise for his larger worry about reality-show spoilers. It is the story. The people who write the laws have acknowledged that the laws they write make them the biggest inside traders in the room, and they took the smallest possible step to address it. Everything else in the column is misdirection.
The regular guy who knows who won Big Brother before it airs is not the threat. He is the mark. He is the liquidity the platforms need to attract the real money — the trading firms with the algorithms, the data brokers with the behavioral profiles, the insiders whose information was never about reality-show spoilers. Marcus mentions the soldier who bet on the timing of military action in Venezuela. That is a real case, and it is a problem. But it is a problem of access to state secrets, not a problem of prediction markets. The soldier who sells information to a bookie is the same soldier who sells information to a foreign intelligence service. The market is the symptom; the classified briefing is the disease.
Marcus gestures at the real scandal and then walks past it. He mentions “members of Congress who go to Washington worth thousands and leave worth tens of millions.” That is the ballgame. That is the class he has correctly identified and then declined to name: the people whose entire professional existence is a prediction market — but a prediction market where they get to write the legislation that moves the line. They don’t need Kalshi. They have committee assignments. They have the calendar. They have the regulatory calendar, the appropriations markup, the conference report that gets filed at 2 a.m. and voted on at 10. The congressional insider-trading problem is not new or subtle; it is old and documented — the STOCK Act of 2012, which was supposed to stop it, was gutted almost immediately — the 2013 STOCK Act Amendments dismantled the online database that would have made enforcement transparent. The soldier in Venezuela is a security problem. The senator on the Armed Services Committee is a structural feature.
What Marcus has done here is the thing respectable opinion always does when a new extraction surface appears: he’s expressed a generalized worry about the little guy getting in on the action while conspicuously failing to name the class that already owns the action. The National Review has been running versions of this column for as long as there has been an economy to fret about. Something new comes along — Indian casinos, online poker, crypto exchanges, prediction markets — and the conservative pundit’s first instinct is to warn that the rabble will cheat. The second instinct, the one that never makes it to print, is to make sure nothing interferes with the people who already are.
The mechanism here is structural and it is old. Every time a new financial surface appears — legal gambling, prediction markets, cryptocurrency — the same pattern runs: a brief window of genuine novelty during which ordinary people can profit, followed by professionalization, capture, and extraction. The platforms — Kalshi, Polymarket, the others — are not neutrally connecting bettors. They are taking a vigorish on every trade, building behavioral profiles on every user, and positioning themselves to be the infrastructure the real money rents. The pattern is enshittification (Doctorow), and it runs on schedule: first the platform is good to its users, then it abuses its users to make things better for its business customers, then it abuses those business customers to claw back all the value for shareholders, then it dies. The people Marcus is worried about — the Big Brother insider, the reporter with a scoop — are the users in stage one. The people who will own the platform’s data and write the regulations that keep competitors out are the business customers in stage two. The people who will be left holding worthless positions when the bezzle collapses are the users again, in stage three. Identity of the marks changes; identity of the house never does.
If the conservative complaint about prediction markets is that they make everyone an insider trader, the conservative answer ought to be that the people who already are insider traders — the ones with the gavels, the subpoena power, and the access to the Federal Register — should be prevented from trading at all. You want to worry about inside information? Ban members of Congress from trading individual stocks, full stop. Ban them from betting on prediction markets, which is what the Senate just voted to do for its own members and aides. Marcus’s column, filed in the same week, treats that vote as a footnote to a larger worry about the masses getting too clever. The Senate voting to restrict itself is the story; everything else is the distraction.
The prediction market is a new vessel; what’s being poured into it is the same old rot. I have watched this since the day-trading boom of the 1990s, when the same column appeared — “ordinary people with home computers are becoming day traders, and this is dangerous” — while the real traders were wiring the capital-gains tax cut through Congress. I watched it during the crypto boom, when respectable opinion worried that teenagers were buying Dogecoin while the real money was building the unregulated banking system that would eventually collapse into the same old fraud-indictment-and-settlement pattern. The Securities and Exchange Commission’s model of settling enforcement actions with a fine and a “neither admits nor denies” press release is a licensing fee for future misconduct, not a deterrent, and that is not a compliment to the SEC. The CFTC fined Polymarket $1.2 million in 2024 for operating an unregistered derivatives exchange. The platform had handled over $4 billion in wagers. A million-dollar fine on a billion-dollar book is not a deterrent; it is a cost of doing business.
Marcus writes from West Virginia, a state that has been strip-mined, pumped, and extracted by outside capital for a century and a half, and he does not mention that the infrastructure behind every new prediction-market platform runs on the same model: the servers in the data centers in the counties that gave away tax abatements to get the data centers; the fiber-optic lines laid across land taken by easement; the underpaid contract workers keeping the cooling systems running; the venture capital funding the whole thing, which will demand its return whether the platform is useful or predatory or both. The house wins because the house owns the property on which the casino is built and the political machinery that keeps the casino’s tax rate low, and the house has been running this game since the first company town.
The danger is not that the world becomes a set of math problems. The double-entry system that has underwritten commerce since the fifteenth century has been that. The danger is that the math problems are always written by people whose capital never meets the person it costs, whose wealth is protected by the corporate form and the bankruptcy code and the carried-interest loophole and every other piece of legal machinery that ensures the people making the bets never lose more than the management fee they’ve already charged. The ordinary bettor who puts his rent money on a prediction market is gambling. The trading desk that moves millions of dollars through a prediction market while hedging its positions on a dozen other platforms is doing risk management. The former is called “irresponsible.” The latter is called “sophisticated.” The difference is capital, not character.
Marcus ends with a call to personal responsibility: the bettor must decide for himself whether placing the wager is fair. That is the conservative move I have watched since Nixon — the same move the cigarette companies made when they told smokers to exercise personal responsibility over their lung health while the companies were hiding the research that proved the product was lethal. Personal responsibility is what you preach to the mark while you remove every structural constraint that would keep the mark from being fleeced. The Senate banned its own members from betting on prediction markets because members of the Senate know that structural restraints are the only ones that work. For everyone else, Marcus offers conscience.
I won’t pretend to be surprised. The same column was filed about legal sports betting, and the same column will be filed about whatever comes after prediction markets, and the same class of people will gravely warn about the dangers of ordinary people getting in on the action while the action itself proceeds exactly as it always has: the house writes the rules, the house takes its cut, and the man in West Virginia who thinks he knows something about Big Brother turns out to have known exactly enough to enrich the platform, the market-maker, and the trading desk in Greenwich that was running the same bet with an algorithmic model that cost more than his house. Again.