Prediction markets are taking heat after badly missing a Wisconsin race, raising doubts about whether these fast-growing betting platforms are worth their soaring valuations.

• Kalshi and Polymarket gave one Wisconsin Democratic candidate a 95% shot to win — the 5% underdog won instead.
• The claim is these markets just copy the polls, so when polls are wrong, the odds are wrong too, offering no real edge.
• An earlier Detroit-area race called at 93% barely squeaked out a win, another sign the odds oversell how certain a result is.
• Young men are shifting money out of stocks like the S&P 500 into sports betting and these markets inside apps like Robinhood.
• The business is booming anyway: Kalshi made $4 billion last year and now carries a $40 billion valuation, with a huge IPO expected.

Outlook: Expect a flood of prediction-market ads this football season and a likely court fight, as the Trump-run CFTC shields Kalshi from New York's push to regulate it like gambling — a battle that could legalize these markets nationwide.