Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the rise of prediction markets and how do they work?
Hi, I'm Rima Grace, and welcome to This is Uncomfortable. This month, you've got millions of people gambling on March Madness, placing wagers on which basketball team will take the national title. A lot of folks, they're betting on apps like FanDuel or DraftKings. But this year, we're also seeing more people placing their sports bets on something called prediction markets.
These are places on the internet where, yeah, you can bet on sports, but also you can bet on anything. Elections, cultural events, natural disasters. On websites like Kalshi and Polymarket, you can find people wagering on everything from who will be the next supreme leader of Iran to which contestant will win the reality game show Survivor.
Prediction markets are soaring in popularity, but right now they're also facing some renewed criticism.
There are multiple markets covering the war in Ukraine and Iran, and there's also multiple bets on nuclear detonation. Imagine betting on what White House Press Secretary Carolyn Leavitt will say in her next briefing. Or betting on how many cases of measles there will be this year.
This might actually be the easiest way to make money in 2026. Howshe is a predatory app.
Billions of dollars are traded on them every week. And now CNN and CNBC have struck deals to incorporate Kalshi prediction markets into coverage.
There's a lot to dig into when it comes to prediction markets. They operate in this kind of legal gray area. They're not subject to gambling regulations, which a lot of states aren't thrilled about. Just last week, Arizona filed criminal charges against Kalshi, arguing that it's an illegal gambling operation.
But today I want to know, with the rise of these platforms and the rise of sports betting, what happens when you can place a wager on practically anything? What does that do to our brains, our bank accounts, and how we relate to one another? To get into it, I'm talking with two people who've thought a lot about this. I'm chatting with Hannah Horvath, who's a financial planner and money expert.
Hannah has a sub stack about the psychology of money and how our minds influence our financial decisions. Hey, Hannah. Hi, super happy to be here. And I'm also joined by Tim Fong, who's a clinical professor of psychiatry at UCLA and co-director of the UCLA Gambling Studies Program. Hey, Tim.
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Chapter 2: How is gambling becoming normalized in everyday life?
skirts and avoids gambling regulation and that's prediction markets and i think that's super super interesting to me because it really is a symbol of what's happening in a culture very quickly yeah can you all give me a sense of like what is one of the wildest markets that y'all have seen will jesus return in 2027 that's the one that always comes to mind too
I checked it this morning, actually. There's a 5% chance.
Oh, wow. I think it was 3%. You know, we laugh about it because it seems so, so asinine. And I think one of the things that I'm most concerned about is Will there be a time that we can create our own prediction market contracts and put them out there? In other words, will Rima get her own national radio show? Will Jane break up with John before Valentine's Day?
There's no reason to suspect we can't make our own prediction markets in our own lives. Will my son get straight A's this semester?
Yeah. Just for folks who don't know, right now, staff members are creating the markets, right? And then anyone can, I think anyone can propose what they're betting on specifically, but then the staff is still deciding what moves forward. And so you're saying we might get to a place where folks can just make their own markets themselves?
Yeah.
Absolutely. Yeah. And look what happened to Cardi B and the Super Bowl contract. I know.
I've been thinking about that.
Will Cardi B perform? Then there was debate of defining perform, just standing there or actually singing. And then who gets to decide? And I think part of the... The concern about this new economy, economic tool, if you want to call it that, there's no judge – there's just judge, jury, executioner from the company itself. It's not regulated by states that regulate traditional forms of gambling.
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Chapter 3: What are the psychological impacts of gambling on individuals?
the, you know, the barrier to enter is super low. I mean, a lot of these platforms, these sports books will like give you your first $100 free. And the reason why they do that is because they know that you're more likely to lose that $100. So it's within their incentive to do it. So you lower the barrier so much, you add in that kind of social factor.
Also, you know, young people are going online, they're seeing people online claiming to make hundreds of thousands of dollars doing it, which, you know, first of all, you have no idea if these people actually made that money or not. But of course, your brain starts to think, well, you know, if they can do it, why can't I?
There is this element where I think a lot of people feel very disenfranchised and they feel like, you know, They felt like they did everything right. They went to college. They're graduating into a job market that is not very friendly to, you know, new college grads right now. And they're feeling like, well, like, what can I do to get ahead?
I feel like the kind of quote unquote American dream is sort of breaking down. Like, how could I possibly succeed? you know, buy a home, be able to afford having a family. And then they're also going online and seeing people that are claiming to make all this money doing these alternative paths to wealth. It feels more normal or less like what traditional gambling would look like.
Right. It's a lot more normalized in our culture. I mean, I don't know about y'all, but I find myself even falling into that trap, even if it's just for a few seconds when I'm scrolling through social media and I see videos or news reports of people making tens of thousands of dollars. You're like, oh, is this plausible? You know, is this a nontraditional path to making money?
I imagine a lot of your patients say that, Tim, too. Like they see it maybe as a side hustle. As a job.
As a job. Why would I want to work in a minimum wage job for 10 hours to make $150 that's taxed at 30%? And when I could sit here in my jammies and put down a $200 wager on the next pitch. And we're also living in a world where online credit is just way, way too easy. When I was 19, I couldn't get a loan. I didn't have a credit card. I had my dad's ATM, and he was watching that thing like a hawk.
If I walked into a bank as a cop, college student and said, I want a $5,000 loan with no collateral, there's no way. Now I have patients getting $500,000 credit, predatory loans in a matter of minutes online. You don't have a gambling problem if you don't have money. But when you have access to money in very fast ways, that's what you get here. Yeah, I completely agree.
And this actually reminds me of, you know, there's a difference between money you earn, money you inherit, and money you find in the street. You have a different relationship to it depending on how you got it. And even earning it, different ways you earn money, you'll have a different relationship to it. You know, I have a friend who plays poker in those underground games in New York.
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Chapter 4: How do prediction markets affect our perception of risk?
You can't drug test for it. You can't measure it.
Yeah, and also I imagine a lot of people don't even know or can recognize that what they're doing is a problem, right?
Absolutely, and they say, oh, you, Rima, have a gambling disorder. No, I don't. I have a money management problem, or I have a luck problem, or I got screwed by the refs, or the NBA's rigged and I would have won, or I had a foolproof money-making gambling strategy, but it just didn't work this time because, you know, the wind was a little bit off in the football game, you know, things like that.
So that's just denial, which is one of the symptoms of all addictions. But it's the one addictive disorder where it's really ironic is that you can win legitimately large sums of money in the course of your addiction. And that creates challenges. So I had a patient a couple months ago. She texted me from the casino. She's like, Dr. Fama, I just won $40,000. My gambling addiction is cured.
And I'm like, oh my God, that's actually the worst thing because it just fuels in her brain. Imagine all the dopamine, the adrenaline, all that neurochemical changes that happen.
Yeah. Hannah, when people struggle with impulsive financial behaviors, what do you usually tell them? Like what actually helps people pause before acting on that impulse?
Yeah.
Yeah, so a lot of people are struggling with their money. That's not entirely their fault. There's a lot of forces at play that can influence their behavior. So just being aware of that. But also a lot of people's financial behaviors are done on autopilot and are very emotionally driven.
And a lot of people are just not aware that they're spending the money they're spending or doing what they're doing with their money. So just bringing more conscious thought into that. The other thing I'll say too is like, it's gonna be really hard to rely on willpower alone doing this kind of stuff. So I'm a big fan of like designing your environment.
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Chapter 5: What role does loneliness play in gambling behavior?
Yeah.
I even think too, like, I think the two salient examples, like the Maduro, you know, someone who benefited on the capture of Maduro. And, you know, there was someone who bet on, like, Google search trends that they likely had insider access to and I think made, like, close to a million dollars, something around there.
And I think a lot about everything Tim said, but I also think when we get to this place, if it's not considered insider trading, who stands to benefit? And it's those people that have that insider information, which are more likely to be affluent, more likely to have access to those spaces. So the broader population will just kind of continue to lose out.
And I think this contributes to like the wider kind of economic environment that we're currently in of like vast wealth inequality, A lot of people feeling really disenfranchised in the current economy and just feeling, you know, nihilistic about their financial futures. And I think that's what often leads them to gamble.
Yeah, that makes a lot of sense. So before we wrap the conversation, kind of a big question, but what do we do about this? What should we do about this broader shift towards everything seemingly turning into a wager? Like, what are the solutions here or the structural changes that you all would like to see?
So number one, I think it starts with the people that regulate gambling. So that's the governments needing to do better. I mean, to have better laws and better rules in place and better enforcement. I think it also starts very simply with the operators that make these apps, ask questions for themselves to say, can we sleep at night?
Knowing that we are generating an app that for some, but not all, Some, but not all, create long-lasting debt and misery and emotional pain and, in some cases, suicidality. I like to see more responsibilities paid for by the gambling operators to say, you know, we're not going to push these things down your throat to say you're going to get all these spectacular wealth.
Yeah. How about you, Hannah? What do you think?
I will start by saying I really believe that community is the antidote to a lot of these things. You know, you can, yes, I do think that advocating for certain policies, advocating for more ethical products, I think are all important things, but that's obviously gets you only so far. I do think that, you know, and Tim had talked about this at the beginning of the conversation of how a lot of this
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