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Prediction markets: Are we betting on the wrong horse?
As prediction markets continue to garner significant traction across everything from sports to politics, the concept is now firmly on the radar of institutional trading. NATASHA COCKSEDGE explores the up-and-coming sector to question whether it is truly about‘ buying into the future’ and where the line between trading and gambling is drawn.
The industry is no stranger to prediction markets, from early political wagers in the 1500s to the first modern prediction market widely recognised as the Iowa Electronic Markets( IEM). Now momentum is surging, with the conversation shifting from curiosity to conviction. Today, participants are no longer just watching, they’ re beginning to actively buy into the future of these markets, driving the debate: where does institutional interest in prediction markets trading lie?
Specifically, these platforms offer event-based contracts – allowing investors to trade on the likelihood or outcome of real-world events, ranging from sports games to political elections, or even, as has become increasingly popular, when popstar Taylor Swift is likely to marry her NFL beau.
Proprietary trading firms, in particular, appear to be capitalising on this growth, due to the markets’ flexibility and fewer regulatory restrictions. Speaking to The TRADE, Matt Barrett, chief executive of Adaptive, highlighted how the past decade specifically has been subject to this period
“ The interest from prop firms is moving some sell-side firms that serve that market to explore offering access to prediction markets but that is at a nascent stage today.”
WILL MITTING, FOUNDER AND MANAGING DIRECTOR, ACUITI
28 // TheTRADE // Q1 2026