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

Gen Z and millennials are far more likely to get into prediction markets than their elders, but there’s a good chance many aren’t making money on the platforms. 

Nearly a third of Gen Zers (32%) and almost a quarter (24%) of millennials say they are currently or considering putting their money into prediction markets or sports betting, a Northwestern Mutual study found in January.

That’s compared 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 when asking if the nearly 4,400 U.S. respondents were involved in various financial activities. It did not mention specific prediction markets.

Prediction markets have exploded in the U.S. in the last couple of years, with trading volumes expected to nearly quadruple in 2026 from the previous year and hit $1 trillion by 2030, according to an April report from investment firm Bernstein. Polymarket and Kalshi dominate the U.S. prediction markets with a combined trading volume of $60 billion so far in 2026, Bernstein reports.

Meanwhile, most traders on prediction market platform Polymarket lose money, according to an April Bloomberg analysis of trade data compiled by data firm Dune. Over 100,000 accounts have lost at least $1,000 on Polymarket, the analysts found, more than double the number of accounts that have won as much money.

Researchers from French and Canadian business schools similarly found that since 2022, roughly 69% of accounts have lost money on Polymarket, according to a paper published in March. Additionally, 77% of the gains have gone to the top 1% of users on the platform, the researchers found.

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

Over 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 on how much users lose on contracts on its platform.

Many prediction market traders could be joining the platforms due to financial stress. Northwestern Mutual found 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 financially behind and think these platforms can help them reach their financial goals more than traditional methods.

“There is a growing sense of nihilism, of financial nihilism, that the traditional rules of money are broken,” says Haley Sacks, who goes by Mrs. Dow Jones online, host of the Financial Tea podcast and author of “Future Rich Person.”

“Housing is unaffordable, inflation is eating your paycheck, and I think that people just feel like the slow and steady approach is maybe like a scam,” she says.

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

News about individuals making huge sums of money on prediction markets, on the other hand, can make it seem easy for anyone to get rich quickly by picking Oscar winners or tomorrow’s weather, Sacks says.

Some users see prediction markets and crypto as “a faster path to wealth than traditional savings,” Sacks says. “They want a shortcut because the traditional road looks blocked.”

Many young Americans still believe that traditional pathways to wealth like homeownership and investing in the stock market exist, but they’re more skeptical that they can have the same success as older generations, and with reasonable cause. A World Economic Forum report from March cited Gen Z’s high student debt and stagnating wages paired with rising home costs as primary drivers for the generation’s financial nihilism.

Because prediction markets offer a variety of categories, from election outcomes to pop culture news, they can seem more approachable to some users.

“They almost make you feel like all your hours spent doomscrolling TikTok or tracking celebrity drama are actually market research,” Sacks says. “It almost validates the idea that you know something that experts don’t and [you can] turn being a fan or being a news junkie into a lucrative — or they present it as lucrative — profession.”

It’s worth noting that there have been allegations of individuals wrongfully using insider knowledge to profit on the platforms. Polymarket and Kalshi say they have rules in place to prohibit insider trading. And regulators continue to scrutinize prediction markets to ensure only fair and legal activity is permitted.

Sacks doesn’t go so far as to recommend avoiding prediction markets altogether, but she does warn against putting serious assets into them and says not to view any money wagered there as investments that are expected to grow.

“The moment that you call prediction market [wagering] an investment, you’ve already lost,” she says. “Look at the money that you put into the prediction markets as an entertainment task, as money as you would spend going to the movies, or going out to dinner…you’re not expecting to get that money back with interest. You’re paying for the experience.”

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

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

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