Prediction markets or addiction markets?

Theodore Germanos, MDBoard-certified in adult, child & adolescent, and addiction medicine

A prediction market lets you buy a contract that pays out if something happens. An election. A rate cut. A game. Tomorrow’s weather. Courts are still arguing about whether that counts as investing or as betting. That argument does not help much in a doctor’s office. The question there is simpler: what is this doing to your sleep, your money, and the people around you? On that question the research is a lot clearer than the law.

What makes any bet risky

Three things do, and none of them is what the product is called.

How fast it settles. How soon you can go again. How little stands in your way.

One study asked 616 young adults who bet at least monthly what they wanted from a betting app. The top answer was being able to bet right now, at any hour, from anywhere. The people already scoring in the problem range wanted two things more than everyone else: betting live during the event, and paying by credit card. The authors said it plainly. The features bettors like best are the ones that make betting worse.

What the research shows

Betting during the event does real damage. Researchers followed 84 people who bet live, with two short surveys a day for two weeks. About a third of those check-ins included a live bet. The people who bet the most, and lost the most money and the most goodwill at home, had two things in common. They were drinking or using while betting. And they were betting to change how they felt.

The reason matters more than the label. In a study of 920 sports bettors, two motives went with worse gambling: betting to cope, and betting for money. That held whether they bet live, bet on single games, or bet the old-fashioned way. Change the wrapper and the psychology stays the same.

Researchers are careful here, so I will be too. A 2024 commentary argues that claims about sports betting being a new and worse kind of harm have run ahead of the evidence. Prediction markets are new enough that nobody has a solid number for how many users get into trouble. What we do have is a long and boring list of what makes a product risky. Prediction markets tick most of the boxes.

Why “it’s a market, not a bet” is the dangerous part

Words do work here. Call it a position instead of a bet and you can open the app at the dinner table. Call a loss a drawdown and nobody asks a second question. The conversation a blown parlay would have started in March gets pushed to September.

There is a practical gap too. When you ban yourself from sportsbooks, that ban covers the sportsbooks your state licenses. A site regulated as a financial exchange is not on that list. So someone who did the hard thing, admitted a problem and signed himself off, can open a different door the same night and read it as permission.

What it looks like by the time someone books an appointment

Bets get bigger after losses, not after wins. Nights go by waiting for something to settle. Money shows up in the account that was meant for rent, or tuition, or taxes. The screen gets turned away when someone walks in. The number you say out loud is smaller than the number on the phone. You decide to stop, and then you do not stop.

You do not have to lose everything first. Waiting until you have is the most expensive version of this.

It is usually not only the gambling

Gambling problems rarely travel alone. Depression and anxiety come along. So do ADHD, autism spectrum presentations, and drinking or stimulant use. So does a history that started long before any market did.

In a 2026 study of people in treatment for gambling problems, 81% reported at least one difficult childhood experience, and 40.5% reported four or more. That is about five times the usual rate. The people with the worst gambling had the most of them. Many also described gambling as a way to manage how they felt, which is the same coping motive the betting research keeps finding.

I am board-certified in adult, child & adolescent, and addiction medicine. That means one appointment looks at all of it, instead of splitting you across three referrals.

If this sounds like trading, that is not a coincidence

Fast, heavy trading has been flagged in the psychiatric literature as gambling-like, capable of the same debt and the same damage, with a standing request that doctors ask about it. I work with traders specifically. See a psychiatrist for traders and gambling and behavioral addiction, or psychiatrade.com for the non-clinical side of that work.

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