Who's Winning In Prediction Markets? (And Why Gen Z Is Losing)

Gabriel Perez ran the teleprompter for Donald Trump. For years, that meant scrolling text across a screen while the most-watched man in the country talked. This year it also meant, allegedly, placing bets on Kalshi's "mention markets," where users wager on the specific words a public figure will say during a speech. Perez had access to Trump's prepared remarks before anyone in the crowd did. Kalshi's surveillance systems flagged unusual activity on his accounts. The company referred the trades to the Commodity Futures Trading Commission, and Perez is now negotiating a settlement over roughly $90,000 in profits that have since been frozen. He no longer works in the federal government.

Perez’s case is not a one-off. A Polymarket user made $400,000 betting on the capture of former Venezuelan leader Nicolás Maduro. A Google engineer was charged in May for making $1.2 million by trading on confidential search-trend data. Former congressman George Santos was accused of hyping a Kalshi market by claiming he'd attend Trump's State of the Union, then profiting by betting "no" once he skipped it.

In March, the White House's management office sent staff a memo warning them against trading on Kalshi and Polymarket using nonpublic information and calling it a criminal offense. Federal prosecutors have brought two insider trading cases tied to prediction markets this year. More than 40 lawmakers wrote to the CFTC and the Office of Government Ethics asking for guidance. The U.S. Senate unanimously passed a rule in April, barring senators from trading on prediction markets. The move followed Kalshi's April 22 disclosure that it had suspended and fined a Senate candidate and two House candidates for insider trading on their own campaign races.

Who's actually at the table?

The youngest adults in the country are betting money that most of them don't get back. A Northwestern Mutual study found close to a third of Gen Zers and about a quarter of millennials are either already putting money into prediction markets or sports betting, or considering it. That compares with only 17% of all U.S. adults, and a much smaller share still among Gen Xers and boomers.

The losses are steep and well-documented. A Bloomberg analysis of Polymarket trade data found more than 100,000 accounts down at least $1,000, more than double the number of accounts that came out ahead. A separate academic study of Polymarket found that since 2022, roughly 69% of accounts have lost money, with 77% of all gains flowing to the top 1% of users. According to Kalshi's own numbers, its unprofitable-trader rate stands above 70% over the last six months as of May 2026.

People are walking into a game most of them will lose, so why do they keep playing?

Northwestern Mutual asked people drawn to prediction markets, sports betting, crypto, options, and meme stocks why they're doing it. Most said they feel financially behind - 80% of Gen Zers and 75% of millennials - and believe these platforms can close that gap faster than anything traditional will. Financial commentator Haley Sacks, aka "Mrs. Dow Jones," called it "financial nihilism," the growing sense that the old rules of money don't actually work anymore. Housing costs feel unreachable, inflation keeps outrunning paychecks, and the traditional advice - buy index funds, contribute to a 401(k), and be patient - starts to look more like the rules of a game that nobody plays anymore. 

The belief that those paths will work for them the way they worked for the generation before them has eroded. Sacks calls it a shortcut for people who've decided the traditional road looks blocked, and that belief gap is exactly where a platform promising fast, visible upside finds its opening.

Not just a feeling - the receipts

Every generation thinks the deck is stacked against them, and on the surface that appears to be misguided. Young households actually do have more wealth today than they did a few years ago. Between 2019 and 2022, the typical net worth for under-35 households jumped 143%. However, that jump came from stimulus checks, low interest rates, and a pandemic-era boom in home and stock prices - a three-year spike, not steady progress. And it still leaves young households sitting at $39,000 in net worth, compared to over $400,000 for households in their late 60s.

Meanwhile, the two costs that actually shape a young adult's life kept climbing. College tuition, adjusted for inflation, is thousands of dollars higher than it was in 1990. Between 1990 and 2020, the average sticker price for college rose from $7,841 to $21,558 in real terms, a $13,717, or 175%, increase over 30 years. The typical home now costs about five times the median household income, up from roughly three times in the 1990s. The price-to-income ratio for under-40 households rose from 2.9 in 2019 to 3.5 in 2024, and 70% of renters under 40 say they're renting simply because they can't afford a down payment. A short-term wealth bump didn't make college or a house any cheaper to get into. The costs of actually building a life went up, and they're still up.

The rules weren't written for us

As a Xennial, I’m old enough to remember dial-up and young enough to have graduated into the wreckage of 2008. The rulebook we inherited - how to build wealth, how to get a foothold, how patience is supposed to pay off - was written by people who played under different conditions. We're expected to play by the old rulebook, but meanwhile the game has changed.

So people go looking for a ladder, such as prediction markets and crypto, and it's not hard to understand why. When the sanctioned path stops paying out, an unsanctioned one that promises a fast, visible upside starts looking less like recklessness and more like the only door still open. But those doors are just another arena with a game that a privileged few can play.

None of this is about blaming anyone for playing. Given the impossible math, it makes complete sense that younger adults are looking for a faster way out. The game changed decades ago. The rules didn't. Anyone still measuring success by a 1989 yardstick is measuring against a world that doesn't exist anymore. Xennials and everyone younger inherited a rulebook nobody rewrote. Prediction markets and crypto aren't the fix. I don't have the fix either. But the first step is admitting the old rules are gone.

Written with AI assistance; edited and fact-checked by the author.