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More than a decade ago, the anthropologist Natasha Schüll set out to describe the mindset of a certain kind of Las Vegas gambler—the type whose penchant for video poker, slots, and other solitary casino games would likely register to most people as extreme. What she found was that their pursuit wasn’t always about the money. For many of them, it was about the experience itself, which would consistently produce a strange sort of trancelike state. Drawing on her subjects’ own descriptions, Schüll called this “the zone”: a psychic frame in which “time, space, and social identity are suspended,” and risk is replaced by a temporary feeling of safety.
Many people experience something similar on today’s internet, even outside the financial realm. You might find yourself swiping on a dating app, seeking the thrill of the next match (and the next, and the next) without necessarily pursuing a real-life relationship. You might flick past a dozen Instagram Reels without really knowing why you did so. There’s a reason the concept of “endless scroll” has become a cliché. This is a tempting rubric for understanding the explosive growth of online betting too. But when I spoke with Schüll last month, she explained that for the mostly young, mostly male users of modern sportsbooks and exchanges, the pleasure of the zone is just one among many.
Online betting happens today in a few major forums. On prediction markets, users can buy contracts tied to real-world outcomes, which can then be sold and resold. Polymarket and Kalshi, recently valued at $21 billion and $22 billion respectively, are leading an industry that could see $10 trillion in annual trading volumes by 2035. Partly for regulatory reasons, these firms are adamant that the services they provide are distinct from “gambling” as it’s been traditionally understood. This is up for debate, and the classification question remains legally ambiguous in some states. (Earlier this week, The Washington Sun reported that the Federal Trade Commission has begun probing the sports-gambling industry, and that the agency’s review isn’t expected to target prediction markets.)
But conventional gambling is alive and well too. In 2018, the Supreme Court overturned a decades-old law preventing most states from authorizing sports betting, paving the way for all kinds of new corporate ventures and partnerships between the world of gambling and the world of professional sports. And it was the legalization of mobile sports betting, which happened on a state-by-state basis in the aftermath of the Court’s ruling, that really popularized the practice.
Although most of the money flowing through prediction markets is being placed on sporting events, these platforms also allow bets on a huge range of other topics. (A market on the number of X posts that Elon Musk will make this month has already seen more than $350,000 in trading volume.) And these markets are constantly introducing new offerings to expand their user base. Bettors can attempt massive, multi-leg parlays, compounding both the risk and the potential rewards. On Kalshi in particular, this feature can lead to setups with absurdly low odds. The people spending time on these apps are more likely to lose money than to make money. (That’s true of both prediction markets and sports-betting platforms.) So why do they keep coming back?
About a quarter of Gen Z investors say that they treat sports betting as a viable investment strategy, rather than a sometime habit, yet the average bet placed on these platforms is typically small. New York State reported that in 2025, the average mobile sports bet was $42. Users don’t necessarily feel compelled to bet, either. Research has shown that people who live near physical casinos are more likely to become problem gamblers, and rates of addiction have climbed in the states that legalized sports betting. But the majority of sports bettors don’t report what the National Council on Problem Gambling describes as “problematic behavior.”
For young people, the rise of mobile betting has been happening against a backdrop of elevated financial risk more broadly. The number of households that invest in stocks and bonds has increased dramatically in recent decades, in part thanks to a legislative and technical evolution. IRAs didn’t exist until 1974; today, low-fee exchange-traded funds and automated brokerage apps make it easy to invest aggressively and often. Scott Baker, a finance professor at the University of Wisconsin at Madison who studies betting, told me that because young people have grown up in an environment of normalized risk, they can sometimes “misperceive” the boundaries between healthy and unhealthy risks. Putting your money in a stock-market index fund carries the expectation of some kind of return; sports betting and prediction markets tend to be much more volatile.
The economist and author Allison Schrager, who recently wrote a book about risk, put it to me another way. It’s only by taking some risks, she explained, that young men learn to distinguish between the good kinds and the bad kinds. Yet each generation seems to become more risk-averse; younger people get married later, are less inclined to change where they live, and drink and socialize at lower rates. Without the training that experience provides, young people can end up making all kinds of uninformed choices, such as turning to sports gambling and prediction markets as a long-term investment strategy.
Some commentators have attempted to marry those two trends—a profound aversion to social risk among young people, and an increased appetite for betting—under the heading of “financial nihilism.” The theory is that, as young people come to grips with the fact that many of them may never own a home, or may never escape the so-called permanent underclass of a stratified society, they figure that online betting could be their only ticket to wealth. In this telling, there’s no misperception of good and bad risk; instead, people are making impractical bets because they’re resigned to an uncertain future.
When I raised this to Schüll, she seemed skeptical of the idea that all young bettors are experiencing that kind of resignation. At least, that may not be why they start making wagers. For prediction-market “sharps”—industry lingo for traders who consider themselves savvy enough to make a consistent profit—it has to do with a literal “sense of being sharp, hoping to win and get that money,” she said. And the connection to sports can make betting a social activity. Some young bettors get involved because they want to be a “big man on campus.”
The race is on to bring more and more users into the fold. Athletes, musicians, and influencers are now being paid huge sums to give this industry a human face. In recent weeks, anyone passing through Times Square could look up to see Sydney Sweeney, nearly nude and eight stories tall, shilling for the sports-betting app Novig on a digital billboard. After the ad went up, the start-up’s valuation quadrupled. These companies know their audience, and they’re hard at work making sure that it’s impossible to look away.
Possible Futures
In every edition, I’ll share my thoughts on a few news stories I’m watching.
- The Securities and Exchange Commission has approved Cboe’s pitch for prediction-market options tied to companies’ performance metrics. Per Bloomberg, traders will be able to “wager on whether companies will exceed or fall short on specific metrics, such as how many cars Tesla Inc. might deliver or how many new iPhones Apple Inc. might sell during a quarter.” It’s part of an industry-wide effort to expand these markets in ever more granular ways.
- Most professional sports leagues are all in on prediction markets. In a twist, the NFL filed an amicus brief earlier this month in support of New Jersey regulators’ legal battle against Kalshi, asserting that states, not the federal government, should have the last word on how to regulate these companies. (This is the opposite of what most prediction-market executives seem to want.) My read is that this could be a sign that the league thinks the regulators will prevail. If the case ends up in the Supreme Court, the NFL may want to be on the winning team.
- A bipartisan majority of Americans oppose making prediction-market bets on elections, per a Reuters/Ipsos poll released this week. And three-quarters of Americans agree that using these platforms to trade on real-world outcomes counts as gambling. It’s not clear whether the courts will ultimately feel the same, but these results are a sign that the industry could be doing a better job of making its case.