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A new national survey suggests that prediction markets face a significant perception problem in the United States, with most Americans viewing them as closer to gambling than to investing.
According to a poll conducted by AIBM in partnership with Ipsos, a majority of respondents see prediction markets as a form of gambling rather than a legitimate financial activity. The findings highlight a disconnect between how the industry positions itself—as a tool for forecasting and risk management—and how the public actually understands it.
As prediction markets gain visibility, this perception gap could become one of the industry’s biggest hurdles.
Survey data: A sentiment shift
The survey found that most Americans do not view prediction markets through a financial lens. Instead, they associate them with gambling, likely due to the platforms’ core mechanics.
Users put money behind uncertain outcomes, and payouts depend on whether those outcomes occur. To many, that resembles betting, regardless of the product’s label. This perception is critical because it shapes how both users and policymakers approach the space.
If prediction markets are widely seen as gambling, they are more likely to face the same regulatory scrutiny as sportsbooks. If they are viewed as financial tools, they fall into a different category with distinct rules and expectations. Right now, the public appears to lean strongly toward the former.
The framing dilemma
The divide between industry positioning and public perception is not surprising. Prediction market companies often describe their platforms as tools for “information aggregation.” The theory is that markets produce accurate forecasts because participants have financial incentives to be right.
But that argument often fails to resonate with the average user. From a consumer perspective, the experience is straightforward: You are putting money on an outcome and hoping you are right. There is no asset ownership, no underlying cash flow, and no long-term investment component.
The design of many platforms reinforces this. Fast-moving markets, short-term outcomes, and event-based contracts contribute to an experience that feels closer to wagering than investing.
Branding vs. reality
How these markets are presented also plays a role. Some platforms emphasize “trading,” using financial terminology and positioning contracts as probability-based instruments. Others lean into entertainment, highlighting how users can participate in real-world events.
This inconsistency creates confusion. If one platform presents prediction markets as a serious financial tool while another presents them as entertainment, users often default to the simplest explanation: it is a form of betting.
Implications for regulation
Public perception influences regulation. Lawmakers often take cues from how the public understands a product. If prediction markets are seen as gambling, it becomes easier to justify applying gaming laws or restricting certain contracts.
This is already happening in some states, where regulators have challenged platforms over whether products violate existing gaming laws. At the federal level, the debate continues over whether event-based contracts should be treated as derivatives under the Commodity Futures Trading Commission or as wagering products.
Challenges for industry adoption
For these platforms, growth depends not just on building better products, but on changing how those products are understood. If new users approach the market with a gambling mindset, they may be more cautious or less likely to commit significant funds.
Platforms aiming to be seen as financial tools may need to prioritize:
- Clearer explanations of market functions.
- Increased emphasis on forecasting and data aggregation.
- Educational content that differentiates prediction markets from traditional betting.
Efficiency vs. speculation
Despite the poll results, supporters argue these platforms offer real value. Economists have long pointed to prediction markets as efficient information systems. Because participants have money at stake, they are incentivized to incorporate new information quickly. In some cases, these markets have produced more accurate forecasts than traditional polls or expert opinions.
From this perspective, the risk is not a flaw; it is the feature that makes the system work. However, the AIBM-Ipsos poll suggests the public remains largely unaware of the utility of these tools beyond speculation.
The perception-reality tension
Perception matters. As the industry attracts more attention from regulators and investors, how these markets are understood will shape their future. Right now, the message is clear: Most Americans are not buying the idea that prediction markets are a form of investing.
Until that perception shifts, or the industry adapts to it, that tension will remain at the center of the prediction market debate.
