Technology 4 min read By Callum Montgomery
Prediction markets draw young adults aged 18 to 21 into betting
Young adults aged 18 to 21 have traded an estimated $5.4 billion on the Kalshi prediction market this year, according to a CNN analysis, raising concerns among campaigners about youth mental health and financial harm.
Young adults aged 18 to 21 have traded an estimated $5.4 billion on the Kalshi prediction market since the start of the year, according to a CNN analysis cited in a recent commentary. The figure is large enough to buy an entire Major League Baseball franchise, or 12,000 typical US homes, and it involves people who are too young to gamble legally in most of the United States.
The author, a co-founder of a nonprofit working on youth mental health and the harms of digital platforms, argues that prediction markets are the latest development of a digital system designed to hold young users' attention. Products aimed at children and teenagers are built around instant rewards, compulsive engagement and habit formation, and platforms collect data on users' habits, moods, ages, genders, emotional states and vulnerabilities to feed endless content and advertising. The commentary points to Meta's agreement to pay up to $17.1 billion to settle claims that it built Instagram and Facebook to be addictive for young people.
Prediction markets, the author contends, build on this environment and carry it into adulthood at a sensitive stage of brain development. The commentary notes that nearly all US states restrict gambling until the age of 21, and says that between 18 and 21 the brain is highly sensitive to excitement but not yet fully able to control impulses or weigh risk. It also cites the claim that roughly one in five people with a gambling disorder has attempted suicide, and warns of compulsive behaviour, financial distress and severe mental health problems among young adults.
The piece rejects the argument that 18-year-olds should be allowed to take part because they can vote and invest in the stock market. It states that prediction markets are fundamentally different because they profit from digital addiction at a particularly vulnerable point in people's lives. Paris Woods, a financial educator and author, is quoted as warning that such markets can create a «cycle of addiction and debt», with consequences that extend to the financial position of people in their forties and fifties.
On regulation, the author acknowledges an unresolved debate over whether a federal regulator such as the Commodity Futures Trading Commission or individual states should oversee prediction markets, but argues that action should not wait for that question to be settled. Proposed measures include raising the minimum age for prediction markets to 21 or higher, limits on deposits, losses and time spent, self-exclusion tools that let users block themselves from platforms, and a strict ban on deceptive and youth-targeted marketing.
The commentary also calls for lawmakers to require greater transparency about how algorithms feed content to young people and to restrict targeting based on children's spending habits, impulsivity or risk-taking. It cites recent action in New York, where Governor Mikie Sherrill has signed a law limiting how platforms can use children's data and push algorithmic content towards minors, as well as bipartisan laws in New York and Illinois requiring greater AI transparency and safety. The author concludes that the current digital environment has taught children to crave the next notification, loot box and reward, and that society should not extend that pattern to betting.
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