The Big Bet

“In The Big Bet, Michael Auerbach explores the past, present, and future of the prediction market.... This is a dazzling and entertaining book.... But it is also an urgent warning about what we might gamble away if we become a society that wagers on everything.” —Patrick Radden Keefe, author of Empire of Pain For many, Trump’s 2024 victory over Kamala Harris was a shock. He won the popular vote. He won decisively. But for those following political prediction markets like Kalshi and Polymarket, this outcome was entirely expected. In recent years, prediction markets have become more accurate than mainstream polls, catapulting them from a niche curiosity to a mainstream source for political intelligence, as well as massive profits. The Big Bet traces how prediction markets developed, how they are changing our world, and what they mean for the future of democratic self-governance. Political betting has existed since the Middle Ages, when citizens and even prelates would wager on the outcome of papal conclaves. What's new is the scale, the speed, and the stakes. Modern, blockchain-based prediction markets are multibillion-dollar businesses with minimal regulation. Do they promote healthy democratic engagement, or do they commodify politics, distort public opinion, and erode trust in governmental institutions? What happens when those tasked with safeguarding democracy possess financial stakes in its volatility? Drawing on deep expertise across finance, policy, and history, Auerbach argues that political prediction markets are not an anomaly. They are the logical endpoint of a society that has applied market capitalism to every aspect of life, including its own governance.