Most prediction market traders lose money—Gen Z and millennials are betting anyway

Gen Z and Millennials are much more likely to enter prediction markets than their elders, but there is also a high chance that many of them will not be able to make money from the platforms.

Almost a third of Gen Zers (32%) and almost a quarter of Millennials (24%) say they are currently considering or considering investing their money in prediction markets or sports betting. Northwestern Mutual study It was found in January.

That compares with just 17% of all U.S. adults and much smaller shares of Gen Xers and baby boomers. The survey grouped prediction markets and sports betting together, asking whether nearly 4,400 U.S. respondents were involved in various financial activities. He did not mention specific prediction markets.

According to an April report by investment firm Bernstein, prediction markets in the United States have boomed in the last few years; Trade volumes are expected to nearly quadruple in 2026 compared to the previous year and reach $1 trillion in 2030. Polymarket and Kalshi dominate U.S. forecast markets with combined trading volume of $60 billion so far in 2026, Bernstein reported.

Meanwhile, most traders on prediction market platform Polymarket are losing money by April Bloomberg analysis Business data compiled by data firm Dune. Analysts found that more than 100,000 accounts on Polymarket lost at least $1,000; That’s more than double the number of accounts making that much money.

Researchers from French and Canadian business schools found similarly About 69% of accounts have lost money on Polymarket since 2022, according to an article published in March. Researchers also found that 77% of earnings went to the top 1% of users on the platform.

Polymarket did not respond to CNBC Make It’s request for comment.

More than 70% of traders on Kalshi have been unprofitable in the last six months, according to data the company shared with CNBC Make It. The company confirmed it has millions of monthly users but declined to share further information about how much users are losing in contracts on the platform.

Many prediction market investors may join platforms due to financial stress. Northwestern Mutual says that among those interested in prediction markets, sports betting, crypto, options or meme stocks, 80% of Gen Zers and 75% of Millennials say it’s because they feel they’re falling behind financially and think these platforms can help them achieve their financial goals more than traditional methods.

“There’s a growing sense of nihilism, financial nihilism, that the traditional rules of money are being broken,” says Haley Sacks, host of the Financial Tea podcast and an online follower of Ms. Dow Jones.Future Rich Person“

“Housing is unaffordable, inflation is eating into your paycheck, and I think people think the slow and steady approach is maybe a scam,” he says.

Sacks and other financial experts often recommend time-tested wealth-building strategies, such as investing. Investing in the stock market through low-cost index funds and making consistent contributions to retirement accounts such as a 401(k) or individual retirement account. But these strategies take time.

News about individuals earn large amounts of money On the other hand, prediction markets can make it easier for anyone to get rich quick. Oscar winners or tomorrow’s weatherSacks says.

Sacks says some users see prediction markets and crypto as “a faster path to wealth than traditional savings.” “They want a shortcut because the traditional path seems closed.”

Many younger Americans still believe that traditional paths to wealth exist, such as owning a home and investing in the stock market, but are more skeptical that they can achieve the same success as older generations for good reason. A. World Economic Forum report As of March, he cited Gen Z’s high student debt and fixed wages, along with rising housing costs, as key drivers of the generation’s financial nihilism.

Prediction markets may seem more approachable to some users because they offer a variety of categories, from election results to pop culture news.

“They almost make you feel like all those hours you spent doomscrolling on TikTok or keeping up with celebrity dramas were actually market research,” says Sacks. “It almost confirms the idea that you know something that the experts don’t know, and [you can] They turn fandom or news addiction into a lucrative profession or present it as a lucrative profession.”

It is worth noting that there are allegations of people unfairly using insider information to profit from the platforms. Polymarket and Kalshi say there are rules prohibit insider trading. And regulators continue to scrutinize prediction markets to ensure that only fair and legal activities are permitted.

Sacks doesn’t go so far as to recommend avoiding prediction markets altogether, but he cautions against placing significant assets in them and says money invested there should not be viewed as investments expected to grow.

“When you say prediction market [wagering] “It’s an investment, you’ve already lost it,” he says. “Look at the money you put into the prediction markets as an entertainment mission, as money to spend on going to the movies or out to dinner… you don’t expect to get that money back with interest. You’re paying for the experience.”

“These high-risk assets can be fun to play around with, but that’s why we recommend spending only ‘fun money’ on them,” John Roberts, chief field officer at Northwestern Mutual, said in a press release. “Don’t allocate more than you can afford to lose entirely, and focus your planning on strategies proven to help people build and maintain wealth over the long term.”

Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investment.

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