Gen Z Poured Billions Into Prediction Markets. 69% of Accounts Are Losing.

Prediction markets pulled in $29.8 billion in combined monthly trading volume in April 2026, a 588% year-over-year increase. Gen Z is doing a lot of the funding ... and most of them are losing.

Haley Sacks, who hosts the Financial Tea podcast, has watched this unfold in real time. She told Yahoo Finance: "There is a growing sense of nihilism, of financial nihilism, that the traditional rules of money are broken." The platforms, she said, are positioned as a way out. "They want a shortcut because the traditional road looks blocked."

A Northwestern Mutual survey published in May 2026 put numbers on that feeling: 80% of Gen Z and 75% of millennials who are active on prediction markets said they are there because they feel financially behind. Thirty-two percent of Gen Z are using or actively considering prediction markets, versus 17% of U.S. adults overall.

The House Edge Is Real, and It Is Not Small

The WSJ analyzed the data behind that enthusiasm. On Polymarket, 70% of users are losing money. The top 0.1% of accounts captured 67% of all profits. More than 100,000 Polymarket accounts have lost at least $1,000 since January 2025.

Kalshi looks similar. Losing users outnumber winners roughly 2.9 to 1. A University of Nevada, Las Vegas study found returns on Kalshi are worse than most Vegas slot machines. Yes-trade bettors who use the first price quoted lose about 11% on average.

Kalshi pushed back. A company spokesperson, per the WSJ, cited data showing Kalshi users lose at a lower rate than equities traders or sportsbook bettors. The comparison is not wrong: sportsbooks extract 96% of accounts. The prediction market loss rate is lower. The defense is "at least we're not the worst." That is not the same thing as good odds.

Galloway Has a Theory and the Credit-Card Line

NYU professor and tech critic Scott Galloway said at SXSW 2026 that the pattern is not an accident: "At some point, we have to stop propping up the markets with young people's credit cards." His argument is that every generation of young Americans has been handed a mechanism for turning anxiety into extractable capital. Prediction markets are the current iteration.

His reading is consistent with the Northwestern Mutual data. Gen Z is not on Polymarket because they think they have an edge. They are there because housing is unaffordable, inflation ran hot for three years, and the S&P 500's 10% annual compound return takes decades to become real money. The prediction market pitch is that you can compress that timeline. The loss data says most people cannot.

What the Industry Gets Out of This

The growth numbers obscure something important: the industry benefits from financial nihilism whether or not individual users win. Volume is the product. Kalshi, Polymarket, and Novig earn on transaction flow, not on which side of the bet wins. A 69% loss rate does not threaten the business model. It is the business model.

That is not a scandal. Sports betting has always worked this way. What is new is the marketing frame. Prediction markets sell themselves as an intelligence test, a way to beat the house with better information. The WSJ data suggests that for most retail users, the information advantage belongs to the pro firms on the other side of the trade, not to the young people funding the float.

Sacks put the warning simply: "The moment that you call prediction market wagering an investment, you've already lost." The platforms are not wrong to call their product sophisticated. They are sophisticated. The sophistication is what makes the retail side expensive.

Ad Watch News is an independent commentary site. No affiliation with Kalshi, Polymarket, Novig, or any party named here. This piece draws on published sources listed below.

Sources & further reading

• Yahoo Finance: Prediction Markets Hit New Milestones, but Most Traders Are Losing, WSJ Finds (May 3, 2026)
• Yahoo Finance: Gen Z and millennials are pouring money into prediction markets — but a whopping 69% of accounts end up losing (May 8, 2026)
• Fortune: Scott Galloway wants the stock market to crash. Gen Z is already betting like it will (March 17, 2026)
• Wikimedia Commons: Scott Galloway at MWC 2025, CC BY-SA 4.0 (Xuthoria, 2025)