In January 2026, more than $1.5 billion changed hands on prediction markets over the Super Bowl alone. These platforms let people wager on almost anything, from elections to celebrity weddings, but a simple question hides beneath the hype: when someone wins, where does the money actually come from?

In their video, What Prediction Markets Don't Want You to Know, Two Cents breaks down how platforms like Polymarket and Kalshi let users buy "yes/no" contracts on future events, why these markets sit in a regulatory gray zone that has fueled suspected insider trading, and the zero-sum paradox that some believe could limit their growth.

Questions: 

• A share priced at 30 cents is said to reflect a 30% chance an event will happen. In your own words, explain how the price of a contract turns into a probability, and why that might or might not be a reliable measure of what will actually happen.
• The video describes several cases where anonymous users made huge profits just hours before major news broke, raising suspicions of insider trading. Some argue this kind of trading should be banned, while others say it should be encouraged. Which side do you find more convincing, and why?
• In the video, prediction markets are compared to poker, where one player can only win if another loses. How is that different from the way the video says traditional stock markets work, and why does that difference matter?
• The video argues that prediction markets need "losers" to keep playing in order to survive, but that those losers will eventually quit once they realize they are outmatched. Do you think this paradox will actually limit these markets, or is there a way around it? Explain your reasoning.
• The hosts close with the poker saying that if you cannot spot the sucker at the table, the sucker is you. What do you think this advice means for someone your age who is curious about trying these platforms, and would you follow it?

About the Author

Sonia Dalal

Sonia has always been passionate about instruction and improving students' learning experiences. She's come a long way since her days as a first grader, when she would "teach" music and read to her very attentive stuffed animals after school. Since then, she has taught students as a K-12 tutor, worked in several EdTech startups in the Bay Area, and completed her Ed.M in Education from the Harvard Graduate School of Education. She is passionate about bringing the high quality personal finance content and instruction she wished she'd received in school to the next generation of students and educators. When she isn't crafting lesson guides or working with teachers, Sonia loves to spend her time singing, being outdoors, and adventuring with family and friends!