Longshot trading dominates Kalshi and Polymarket, Bloomberg finds

A Bloomberg analysis published on 7 October 2026 found that users of Kalshi and Polymarket primarily trade longshot contracts that lose roughly 98% of the time. The pattern holds across both platforms and indicates repeat wagering on low-probability outcomes rather than systematic, information-driven position-taking. That behaviour calls into question the claim that these venues operate chiefly as instruments for price discovery.

Bloomberg analysis: longshot trading overwhelms activity

Bloomberg analysed trading activity on Kalshi and Polymarket and concluded that a substantial share of volume goes to contracts whose outcomes are longshot events and which, in aggregate, fail to resolve in the bettor's favour about 98% of the time. The analysis did not single out isolated markets; it reported the pattern as a cross-platform, recurring phenomenon. Bloomberg framed the finding as evidence that users repeatedly favour low-probability outcomes and that such trades dominate usable price information.

"The data suggests casino-style wagering rather than efficient price discovery," Bloomberg concluded in its analysis.

The piece emphasises frequency of this behaviour: the longshot bias is not a marginal feature of certain markets but the prevailing trading motif on both platforms. That frequency matters because prediction markets claim their primary function is to aggregate dispersed information into a probabilistic price signal. If most volume is directed at longshot outcomes that lose almost every time, the resulting price signal will reflect entertainment-driven bets rather than concentrated, corrective wagers from informed participants.

What this means for prediction market claims and price discovery

Kalshi and Polymarket market themselves as venues that surface collective insight — phrasing that positions them as forecasting tools or "truth machines." The Bloomberg findings challenge that frame. When a crowd repeatedly chases tiny-probability outcomes, prices can misrepresent underlying likelihoods because the dominant flow is not coming from traders correcting mispricings but from participants chasing outsized payoffs.

Traders who treat those prices as superior forecasts face a structural headwind: the population they are learning from is systematically choosing low-probability events. The practical implication is blunt: price movements driven by repeated longshot betting are more likely to be noise for anyone trying to extract a genuine probabilistic signal.

Regulatory and operator implications for prediction market risks

Regulators assessing retail access to event contracts can point to the Bloomberg finding as evidence the products function like gambling with an academic veneer. The analysis reshapes risk profiles in two ways:

• it highlights retail exposure to repeated losses when the dominant behaviour is chasing low-probability outcomes; and

• it undermines the argument that market prices reliably reflect informed consensus.

Regulatory authorities may therefore re-evaluate consumer protections, suitability rules and marketing restrictions for prediction-market products. The Bloomberg report explicitly connects the observed behaviour to the question of whether these platforms are delivering informational value or merely hosting entertainment-style wagering.

How operators might respond: product and marketing choices

Platform operators face a strategic decision. They can alter product design and marketing to attract what the Bloomberg piece calls "sharper flow" — traders who provide corrective pressure and improve price accuracy — or they can lean into the entertainment-oriented trading that appears to generate volume today.

At the product level, changes could include stricter market creation criteria, greater incentives for liquidity providers who trade on information, fee structures that penalise churny longshot bets, or enriched professional APIs. On the marketing side, platforms may either emphasise the entertainment value of speculative longshot markets or pivot to explicitly position certain market windows as research-grade forecasting tools.

Kalshi and Polymarket will reveal their strategic choice in upcoming product announcements and promotional campaigns. The platforms' next steps will also shape what regulators look for when assessing whether these venues are essentially gambling platforms or legitimate forecasting markets.

Consequences for traders and ecosystem participants

Retail traders who use Kalshi or Polymarket as forecasting tools should recalibrate expectations. The Bloomberg analysis indicates the crowd on these platforms is not primarily engaged in informative arbitrage; it tends to chase long odds that lose in aggregate. That means:

• traders seeking to extract a predictive edge should test whether a given market's volume profile is dominated by repeat longshot flow before treating the price as a forecast;

• institutional participants considering these markets for research or hedging must factor in that observed prices may carry entertainment-driven noise; and

• liquidity providers and market makers should model elevated churn and skewed payoff distributions when setting spread and collateral parameters.

Market participants, platform vendors and regulators will watch whether changes to product design or user acquisition alter this longshot bias. For now, the Bloomberg analysis offers a benchmark: longshot bets that lose approximately 98% of the time dominate trading activity on both Kalshi and Polymarket.

Where to look next

Industry observers should monitor subsequent trading-level disclosures, product changes from Kalshi and Polymarket, and any commentary from regulators that cites Bloomberg's analysis. The question is whether volume composition shifts toward more information-seeking activity or whether platforms formalise features that cater to the entertainment-driven demand already generating revenue.

The broader conversation intersects with debates about consumer protection, market design and the classification of prediction contracts. Readers interested in regulatory responses and platform product updates can follow coverage in our regulation and b2b sections.