Whether or not modern prediction markets should be considered a financial instrument (under the category of event contracts or binary derivative) or gambling product has become a very contentious topic in the United States. Editorialists from FORBES to Stanford Law School all have opinions on the matter, but what matters most from a mental and behavioral health perspective, is the experience of individuals who find themselves struggling to use the product responsibly.
“I’ve lost about $1,800 in sports betting prediction markets over the last couple months. I invest on (operator name withheld) and gambling was never my thing, but they came out with a predictions market sports betting type thing. I was intrigued and gave it a go. At my highest I was up over $1k and it felt really good. I then proceeded to lose that $1k and an additional $1,800 of my money that I had saved away to invest in the bear market. I was always very good at investing and very safe with my money and know how to profit from investing, I really regret getting into sports betting on (operator name withheld) and wish they never came out with this option. Now I feel in despair that I lost all this money and will have a lot less to invest. Please help me, I have such a sinking feeling that I dug myself in this whole and need a way to get out of it.” (April 2026 | Reddit)
“I relapsed yet again. I posted several times on here this time on Prediction markets this time. Turned $5k into $20k in two days and felt like i was on a “generational run again”. Then lost it all in seconds. I’ve been down this road so many times nearly $300k of my actual money jobs, savings and inheritance over 6-7 years and I’m only 27.” (March 2026 | Reddit)
“Lost it all betting on prediction markets. Fcking lost it all. I’m so stupid. Please roast the crap out of me so I don’t do this again.” (April 2026 | Reddit)
Reports from individuals – namely young adult males – exhibiting an inability to manage their behavior on prediction markets are rising with the proliferation of the product on U.S. soil. These individuals are sharing their experiences on forums, social networks, Chat GPT, and with “anyone” else who will listen as they seek insight into why they have found themselves in such a position. They want to know how to restore more than financial losses, but behavioral wellbeing. As someone who arrived here after entering “lost everything on prediction markets”, you can relate. Below is an overview of the growing issue along with links to resources that will provide this insight, followed by next steps to take to find balance in your life.
Overview of Problem Behavior Relating to Trading with Online Prediction Markets (and Where to Get Help)
Data Says You’re Not Alone
Northwestern Mutual, a financial services company in the U.S. that offers financial planning, wealth management, and insurance services released a report at the onset of 2026, indicating where generations are investing, or planning to invest in the immediate future:
| Invested / Investing | Adults | Gen Z | Millenials | Gen X | Boomers+ |
| Crypto | 24% | 32% | 35% | 20% | 8% |
| Sports Betting / Prediction Markets | 17% | 32% | 24% | 10% | 3% |
| Options | 13% | 17% | 18% | 14% | 4% |
| Meme Stocks | 9% | 14% | 13% | 6% | 2% |
Definitions:
- Crypto – References investment (or intent to invest) via the buying, holding, or trading of digital currencies (e.g. Bitcoin) that operate on decentralized blockchain networks.
- Sports Betting / Prediction Markets – References investment (or intent to invest) via wagers and trades on sporting events. For the report, Northwestern Mutual combined “sports betting” and “prediction markets” into one category.
- Options – References investment (or intent to invest) via financial derivatives that provide the right (but not the obligation) to buy or sell an underlying asset (such as stocks or ETFs) at a predetermined strike price within a specific time frame. Key options types include calls (right to buy) and puts (right to sell), used for speculation, income generation, or hedging risk.
- Meme Stocks – References investment (or intent to invest) via buying shares of companies that gain sudden, viral popularity, primarily driven by social media hype and online communities, rather than traditional business fundamentals.
A very significant number (32%) of surveyed Americans born between 1997 and 2012 (Gen Z) are ready to put their money into prediction markets. They are followed by nearly a quarter (24%) of those born between 1981 and 1996 (Millennials).
Are these relatively young adults making a smart financial decision?
Recent reports indicate that you may not be alone in your plea for help to recover from having lost everything – or a lot – on prediction markets.
Over 100,000 prediction market accounts are down at least $1,000, which is more than double the number of accounts that have won as much money. (Bloomberg)
Over 70% of traders on one of America’s top prediction market platforms have been unprofitable in the last six months, (CNBC)
Over 70% of traders (in a review of 1.6 million accounts) on another top U.S. prediction market platform lose their money. (WSJ)
76.5% of all gains on one of America’s top prediction market platforms were captured by the top 1% of traders (WSJ)
What about those who are coming out on top? The question is worth review when considering that self-belief that one has a winning strategy is one of the most common cognitive distortions related to problem gambling and trading (view details).
Those who rationalize that they may be among the minority are encouraged to review a recent Wall Street Journal report. The report.suggests that a significant proportion of successful traders are actually firms who are paying money for data and for servers so that they can win big by placing tens of thousands of data-driven algorithmic trades every single day. WSJ also touches on how insider trading has become a problem for prediction markets. The average American does not have this sort of access.
As current reports indicate, you are not alone in experiencing significant financial loss from trading on prediction markets. But why are you unable to maintain a healthy relationship with the activity? Please keep reading.
Are Prediction Markets an Unhealthy Fit for You?
Both problem gambling and problem trading are associated with certain factors and underlying wellness issues. These include adverse childhood experiences, socio-economic challenges, a family history of problem gambling behavior, and risk-taking personality, along with the presence of mental health concerns such as anxiety, depression, ADHD, OCD, PTSD, and more. In many cases involvement in gambling/trading serves as an unhealthy (considering the dopamine loop) coping mechanism for negative feelings and emotions. In other cases, there is an intersection between problem gambling/trading and addictive behaviors relating to other web-enabled activities. It’s a complex web that suggests millions of Americans may need to be more mindful of their involvement with prediction markets.
Table of Potential Vulnerabilities and Risk Factors
| Early Childhood Abuse and Trauma | Early Childhood Exposure to Gambling |
| Anxiety | Chronic Stress |
| Bipolar Disorder | Depression |
| Obsessive Compulsive Disorder | Attention Deficit Hyperactivity Disorder |
| Post Traumatic Stress Disorder | Substance Use Disorder |
| Suicidality and Suicidal Ideation | Unhealthy Gaming |
| Compulsive Shopping Disorder | Hypersexual Behavior |
| Risk Taking Behavior | Other (tap to ask Kindbridge) |
Signs of Addictive Behavior on Prediction Markets
As someone who may have arrived here after entering “lost everything on prediction markets” you have already experienced one of the primary signs of problematic behavior. For further introspection, Kindbridge has compiled a comprehensive list of other signs, symptoms, and consequences that may confirm that counseling intervention is required. Tap the link below to access the guide.
Restore What Was Lost on Prediction Markets
There’s no strategy to directly get back financial losses that you sustained by trading on prediction markets. As with gambling, the practice is referred to as chasing losses (one of the signs of unhealthy trading on prediction markets).
What you can restore, however, is balance in your life. Through counseling you can learn to recognize triggers to problematic trading behavior and access tools needed to manage feelings, emotions, and behavior in a healthy way. Whether you need to abstain from prediction markets for the foreseeable future, or require a time-out while you develop the skills needed to participate responsibly, will be determined in union between yourself and your Kindbridge counselor.
Click or call to book a FREE assessment for problematic prediction market behavior and cooccurring mental / behavioral health concerns. No commitment required.
Trading Counseling Covered by Insurance
Again, financial loss is a primary sign of problematic behavior. This may make you question investment in counseling. While there is a strong case to be made for ongoing counseling delivering a palpable ROI (view details), you will find greater financial comfort in knowing that a significant portion, or all, of your sessions may be covered by insurance.
