Prediction markets are a relatively new phenomenon that gained rapid success with the revival of sports betting following the lift of a 25-year-old ban in the 1992 Professional and Amateur Sports Protection Act legislation.
In a 2018 lawsuit between the sitting governor of New Jersey, Phillip Murphy, and the National Collegiate Athletic Association (NCAA), the ban on sports betting was abolished. Deemed unconstitutional by the U.S. Supreme Court for disregarding the 10th Amendment, sports betting could be legalized at the state level.
After the ban’s removal, 39 states—Minnesota not among them—and Washington D.C. legalized sports betting. This legalization directly caused an increase of gambling within the United States. According to RG, from 2018 to 2025, the total amount of money wagered in sports bets increased from $1.5 billion to $165.5 billion. This rapid increase of betting was also tied with the rise of online sportsbooks.
Directly after the repeal of the ban, DraftKings created the first online and mobile sportsbook. Backed by retired National Basketball Association (NBA) player Michael Jordan, DraftKings rapidly expanded, reaching an annual revenue in 2025 of $6.05 billion. In addition to being very financially successful, the rise of online sportsbooks aided in the creation of a culture based around betting.
The rise of betting led to the normalization of wagering money on increasingly specific scenarios, a prime example being parlays. A parlay is a wager that combines multiple different bets into one, decreasing odds of winning, but increasing the reward. In 2023 alone, parlays accounted for over 70% of National Football League (NFL) and NBA bets on the sportsbook FanDuel.
“On single parlays, you can make thousands of dollars,” Douglas said.
It’s estimated that American traders made 40 billion off of prediction markets in 2025.
“The point that we’ve gotten to with the price levels [in the] United States, [or with] the value of a dollar or what people see as a value of a dollar, has made it easy to gamble that away or predict it away,” AP Economics teacher Josh Flug said. “The opportunity cost is low, and people can make a profit.”
As the normalization of online betting continued, Kalshi sued the United States Commodity Futures Trading Commission in 2024 for prohibiting them to sell event contracts, which are agreements between buyers and sellers with clear win and loss conditions, on the outcome of congressional elections happening that fall.
When the U.S. District Court for D.C. ruled in favor of Kalshi, prediction markets exploded, aimed at harnessing the “wisdom of the crowd,” a theory that a large group of people can usually predict a result with high accuracy.
However, with the rapid explosion of prediction markets also came a series of issues that had not been planned for or addressed.
Prediction markets are particularly vulnerable to insider trading, for example, which is the process where bettors who have access to information not publicly available use their knowledge to be on the right side of a bet. Insider trading is strictly regulated in the stock market, but less so for prediction markets because of their novelty.
“[Insider trading] is very obvious with either the capture of Maduro or the strikes on Iran,” senior Alvi Buzar Barua said. “Certain specific users have made incredibly specific bets on those circumstances of hundreds of thousands of dollars, and they’ve made six figures because of it, and that information obviously comes from somewhere inside the government.”
As Buzar Barua refers to, anonymous traders on Polymarket made over $1.2 million by correctly predicting strikes on Tehran two hours before they began.
“Everyone should be given a fair and equal chance at something, just like, regardless of social class, beliefs, [and] all that stuff,” senior AJ Bridgeford said. “Just give everyone a fair and equal chance.”
Others raise moral issue with the subjects on which you can bet within these markets.
“Betting a certain leader is going to die in a country seems incredibly unethical,” Buzar Barua said.
Kalshi had a $54 million market on the late Ayatollah Khamenei’s fate as Supreme Leader of Iran—would he be out before April 1 or before March 1?—which critics say was a proxy for a bet over his assassination.
Not all bets are so consequential, however. Kalshi has regular markets wagering on how long White House press conferences will last, or which “buzzwords” press secretary Karoline Leavitt will say first (options include fraud, Supreme Court, and the SAVE America Act).
“If you’re betting on, like, the president saying the word ‘winter,’ the president doesn’t get anything from it. You only get the satisfaction of him saying ‘winter,’” sophomore Akiva Olitzky said. “These words have become now literal money bags.”
Furthermore, loopholes in platforms allow many teens to bet on them despite the age limit being 18. This happens through setting up accounts with an adult’s, or a parent’s, IDs. According to a study conducted in 2024, gambling under the minimum legal age is correlated with an increased likelihood of gambling addiction in the future.
“It’s an addiction just like anything else, but it’s worse because you’re losing more and more money and you’re just keeping going because you think you’re going to win big,” Olitzky said. “They target young kids, because they’re more vulnerable… it’s an evil thing.”
“I wouldn’t [encourage kids] engaging in this at such a young age, just because, like anything else, it’s an addiction,” Flug said. “It’s something that you could lose control of. It’s something that may lead to future behavioral problems as an adult when it comes to the use of money, gambling, and prediction markets.”
As the Minnesota government works to address the loopholes within their regulations against sports betting that allow prediction markets, Greenman’s proposal of a ban looks to take a decisive stand.
“This bill defines prediction markets specifically… and then it makes it a felony to create, to host, or to advertise that kind of market [in Minnesota],” Greenman said. “It provides exceptions that preserve the current framework of what the legislature decides is legal and acceptable in the past.”
Minnesota currently has a ban on sports gambling with exceptions for institutions on tribal land and guarantees of a share of profits to organizations dedicated to addressing gambling addiction, which prediction markets use a loophole to avoid, and which the bill seeks to reapply.
It’s not certain whether the bill’s ban on prediction markets in Minnesota would be complete or not. Because of different gambling classifications under the federal Indian Gaming Regulatory Act, it’s debatable whether the operation prediction markets would be legal on indigenous reservations in Minnesota.
“There would, at least, be an ability to challenge a tribal [nation’s] ability to offer a prediction market,” Minnesota House Legislative Analyst Ben Johnson said.
For the Edina community, a ban on prediction markets would mean students losing a source of insight and mobility in the financial world.
“Gambling can increase your wealth to an extent, and then you can invest that to start a business or something,” Bridgeford said. “I know that’s why some of my peers are interested, because it’s a way up.”
Outside of revenue, prediction markets are an avenue of education for Edina community members as well.
“Well, I’m going to school for business,” Douglas said. “Prediction markets taught me about concepts like liquidity, and odds, and investment… [They’re] something the financial sector is going to have to work with going forward for sure, because there’s a lot of money in them.”
Not all consider the ban a loss for Edina, however. As an already affluent community, the use of prediction markets by residents can be a symbol of privilege and cavalierness with regards to money.
“It’s a very common culture that I see at Edina [High School], with a lot of other students like bragging about how much they’ve made gambling over the weekend,” Buzar Burua said. “As a society, [gambling] is an issue, and prediction markets are just a new avenue of that.”
While it’s uncertain whether or not the bill will pass, what is certain is that Edina will have to reckon with prediction markets in it’s community, one way or another.
“I have so many friends obsessed with gambling, sports betting, and prediction markets,” Olitzky said. “Prediction markets are one of those things that’s targeted at kids, and I’ve seen my friends get hooked.”
“[Betting in prediction markets] is okay, but you should not see it as an investment. You’re not actually investing in a market,” Flug said. “Just like anything else that is a hobby, you should have a set budget: what number are you willing to gamble and you’re okay losing.”
