How Can Prediction Markets Offer Wagers Where the Outcome is Known?

Today I noticed that the Kalshi prediction market website was taking “predictions” on some Oscar winners like Best Picture. I always thought that casinos and online gambling websites wouldn’t do that, because there's a person or people at that accounting firm that will know who the winner is before the awards show. That person or people could make a “prediction,” since it seems to be legal in California right now.

Yes, prediction markets seem to have an insider-trading problem, though the markets themselves and some analysts and experts question whether or not insider trading is a problem at all.

This issue erupted a few weeks ago when an anonymous first-time bettor on Polymarket placed bets totaling around $33,000 that Nicolás Maduro, presidente de Venezuela, would "be out of office" by January 31. The bulk of these wagers were placed mere hours before the surprise nighttime raid by U.S. Special Forces, fueling allegations of insider trading -- especially when the payouts came to $436,000 after the market settled, according to various reports.

So who might've made the play? Someone deep inside the administration and privy to the planning of the raid? A paratrooper getting ready to fly to Caracas? The wife of one of the helicopter pilots? Before the raid, the probability of Maduro being removed was considered very low (around 6.5%), making the big bet on the "yes" appear highly informed -- and the "no" hopelessly behind the curve.

An article on InGame.com titled "Coin Flips That Already Landed" discussed this situation in some depth. It starts with a prediction markets trend that, taken to its logical conclusion, will make bets available on just about anything.

"Besides gambling on foreign leaders getting the boot, you can also bet on what MrBeast will say in his next video. Or who might host 'Saturday Night Live' this season. Or what words officials of American Airlines will utter during their next earnings call. Or when xAI will release Grok 4.2. Or will Apple release a Macbook with cellular connectivity before 2027. And on and on and on and on and on with markets where someone, somewhere knows the answer. Or when hundreds of people do."

The piece goes on to say that insider trading "is the whole point" of prediction markets, which not only allow, but encourage it to happen. How long can it last until the "retail people" (i.e., the outsiders, the suckers) wise up to the fact that the game is rigged? We'll discuss that in tomorrow's QoD.

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Comments

asaidi Feb-04-2026

They're advertising it.

The Kalshi website has a new commercial where they say you can "trade on" the "awards ceremony".  https://www.youtube.com/shorts/Fjjbg19VvIA

John Hearn Feb-04-2026

I ain't got time for that

On the solid advice of the good folks here, I limit my sports betting to several minimum ($11) wagers Las Vegas sports books when in town. I get a good bet at a good value, although there is still risk given recent quasi-points-shaving incidents in both college and pro sports. Still, it's a hella sight better than sucker bets on whether Taylor Swift will ask me to cook breakfast for her and such.

That Don Guy Feb-04-2026

Can't you bet on Oscars in Vegas?

There was a time when a Nevada book needed permission from the Gaming Control Board to be allowed to take bets on non-sporting events, but they got rid of this restriction years ago, with one exception: they cannot take bets on elections.
I don't think there is much risk of "insider trading" involving the Oscars, as if there was even the slightest indication of this, PriceWaterhouseCoopers would be out on its ear the following year.

Actually, there was a time when the winners were announced in advance, sort of; up through the early 1940s, newspapers would be told the winners in advance so they could print them in the next day's morning newspapers, with a promise that they would not print them until the day after the ceremony, but when one paper released them in advance, the Academy changed to the current "only the accountants know until the winner is announced at the ceremony" system.

VegasVic Feb-04-2026

Kalshi

The prediction markets are a good alternative if you don't have a sports book near you or you can't bet remotely.  Key point, I would recommend sports only, not the other garbage.  In my state all sports wagering has to be done in person at the casino, not remotely.  It's only about 10 miles for me but I use Kalshi when I don't want to make the trip or want to make some last minute bets.  It works well.  

It should be noted that FanDuel and Draft Kings now also do prediction markets in addition to their sports betting.  So does Robinhood (they use Kalshi behind the scenes). 

Personally I never bet more than $10 on a game.  And almost always football.  I don't want to spoil my engagement of football by worrying about winning or losing money.  So a few bucks just to make it a little more fun.  Basketball and especially baseball are too random.

John Dulley Feb-04-2026

Great question

Great question of the day and responses. I’m a big sports guy but NEVER bet on games, it’s just to difficult to win at. I do like to listen to some gambling podcasts tho as they can give some good insight to what’s happening, but I didn’t realize FanDuel and draft kings were doing the prediction market crap.

Question of the Day - 04 February 2026

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