The Geopolitical Odds Game

I’ve spent the last year watching prediction markets more closely than I probably should, and I’ve come away with one uncomfortable conclusion: anonymous gamblers are better at understanding geopolitics than the people we pay to understand geopolitics.

This isn’t some crypto-bro take. I was skeptical too. But after watching platforms like Polymarket and Kalshi call outcomes that left cable news pundits stammering, I’m done pretending the credentialed class has some special insight the rest of us lack.

The Power Of Collective Intelligence

Remember how the 2024 election was “too close to call”? Every major outlet ran that line for months. Pollsters hedged. Analysts equivocated. Meanwhile, on Polymarket, Trump was a clear favorite weeks out. Not a slight edge — a clear favorite.

I remember arguing with friends about this. They’d cite some new poll showing a dead heat. I’d pull up the prediction market odds. “These people have money on the line,” I’d say. “The pollsters just have reputations, and those are apparently worthless.”

A Vanderbilt study from mid-2025 confirmed what traders already knew: Polymarket significantly outperformed traditional polling. Thousands of random people with financial skin in the game beat the professional forecasting apparatus. That should bother us more than it does.

Why Ukraine Banning Polymarket

When Ukraine blocked Polymarket earlier this month, calling it a “gambling site,” the Zelenskyy government accidentally revealed how seriously they take these markets. For example, countries don’t ban odds96 and many other gambling sites like them for geopolitical reasons, they don’t see them as threats. 

The platform had been running contracts on territorial outcomes and ceasefire timing. Apparently letting the global public price those scenarios was too much. I get it—from their perspective, these markets were generating pessimistic odds that contradicted official messaging about the war. But banning the messenger doesn’t change what informed bettors actually believe. It just keeps your own citizens in the dark.

This is what governments do when they’re losing the information war. They restrict access to competing narratives. The irony is that anyone with a VPN can still see the odds.

Markets Don’t Reward Drama

The mechanism is simple and brutal: wrong predictions cost money. Pundits who confidently predicted Russian forces would take Kyiv in 72 hours faced zero professional consequences. They’re still on television, still getting invited to conferences, still writing op-eds. The trader who bet on that outcome lost his stake and, if he kept making bad calls, eventually left the market entirely.

Over time, this culling process concentrates influence among people who actually understand how the world works. There’s no equivalent mechanism for think tank analysts or intelligence officials. You can be catastrophically wrong about Iraq’s WMDs, housing market stability, inflation being “transitory” — pick your favorite institutional failure — and still collect your pension. The professional forecasting class has been wrong about essentially every major development of the past two decades, and yet we still treat their pronouncements as authoritative.

My favorite trading strategy I’ve heard came from a guy who cleans up betting against panic. “When pundits start hyperventilating about World War III,” he told me, “I bet on nothing happening.” He’s been doing this for three years and is up substantially. That tells you something about the calibration of our professional threat-assessors. They systematically overestimate dramatic outcomes because drama gets attention. Markets don’t reward drama. They reward accuracy.

What the Odds Say Now

I check the Taiwan contracts more than I’d like to admit. Traders are pricing in meaningful escalation risk, which contradicts the conventional wisdom that China won’t move until 2027 or later. That 2027 date comes from some leaked CIA assessment that’s become gospel in certain circles. Markets aren’t buying it.

In Ukraine, bettors have consistently been more pessimistic about Ukrainian victory than official Washington discourse. The gap between what the State Department says and what people with money on the line believe is wide enough to drive a truck through. Someone is wrong, and if I had to bet — well, I know where I’d put my money.

Insiders as an Unsolved Problem

Prediction markets have obvious vulnerabilities, and I’m not going to pretend otherwise. The Nobel Peace Prize scandal was a perfect example: Maria Corina Machado’s odds spiked from near-zero to over 70 percent about eleven hours before her win was announced. Someone clearly leaked. The Nobel Committee is investigating, though I’m not holding my breath for accountability from the institution that gave Henry Kissinger a peace prize.

Rep. Ritchie Torres has proposed legislation — the Public Integrity in Financial Prediction Markets Act — to bar federal employees from trading on contracts where they have non-public information. The fact that we need this law tells you everything about who actually has the information advantage in these markets. Washington insiders have been trading on privileged knowledge for years. At least now someone’s trying to address it.

But here’s what critics miss when they use insider trading to dismiss prediction markets entirely: even with that manipulation, the market incorporated the Nobel information before it became public. The odds reflected reality faster than any news outlet could report it. Imperfect information aggregation is still better than no aggregation at all. I’ll take a market that’s sometimes gamed over a pundit class that’s never held accountable.

What’s Actually Happening

There’s a permanent gap between official narratives and market-assessed reality. When that gap gets wide enough, it represents an opportunity — not just financial, but epistemic. You can learn something about the world by noticing where governments and media say one thing while bettors price in another.

I’m not claiming markets are always right. Liquidity can be thin. Crowds can be manipulated. Genuine black swans are hard to price by definition. But markets are less wrong than the institutions that have lied to us repeatedly and faced no consequences for it. That’s a low bar, and yet most of our information infrastructure fails to clear it.

The geopolitical odds game used to be a niche interest for crypto people and finance types. Now that the CFTC has approved Polymarket to operate legally in the United States, it’s going mainstream. These platforms have grown from curiosities to sophisticated financial infrastructure valued in the billions. That trajectory isn’t going to reverse.

For anyone who wants to understand what’s actually happening in the world rather than what we’re being told is happening, prediction markets are becoming essential. Not perfect — but essential. The professional forecasting class will keep manufacturing consensus and suppressing inconvenient possibilities. Markets will keep quietly revealing what informed people with money on the line actually believe.

Professional forecasters get weeded out eventually — but “eventually” can take decades, and a lot of damage happens in the meantime. The question is whether you want to wait for the institutions to admit they were wrong, or whether you’re willing to look at where the smart money is going right now.