Kalshi and Polymarket are booming. A new ETF offers retail investors a way into the ecosystem. But the smartest opportunity may be learning from the markets before investing in them.

Imagine making nearly $410,000 by betting on a geopolitical event — except the U.S. government alleges the trader had access to classified information.

That is the extraordinary case involving U.S. Army master sergeant Gannon Ken Van Dyke, who was charged over alleged Polymarket bets connected to Nicolás Maduro's capture in January 2026. He has not been convicted.

It's a crime story, but also a warning: when uncertainty becomes tradable, information can become extremely valuable.

Welcome to prediction markets, where people trade contracts on elections, interest rates, sports and real-world events.

The two leading names are Kalshi and Polymarket. Reported combined monthly trading volume reached approximately $53 billion in July 2026 before reportedly declining in August. That's remarkable growth from less than $5 billion in September 2025.

But here's the question Wall Street should be asking:

Can you make money from a market without betting on its outcomes — and without paying too much to own the companies behind it?

There are three ways to participate. Only one requires you to place a bet.

1. The probability machine

A prediction market lets participants trade contracts linked to an event.

Suppose a contract costs $0.40 and pays $1 if the event happens, otherwise nothing. Its price roughly implies a 40% probability.

That's not a guarantee. It's the market's current assessment, influenced by information, liquidity, fees and traders' incentives.

Think of it as a crowdsourced probability meter — useful, occasionally brilliant, and sometimes spectacularly wrong.

Here's the clever part: you can use that information without trading a single contract.

Suppose you believe the Federal Reserve will cut interest rates with 75% probability, but a relevant prediction market implies just 45%.

Don't immediately buy growth stocks.

Ask why you disagree.

Perhaps you've spotted an overlooked economic signal. Perhaps you're early. Or perhaps your confidence has outrun the evidence.

Check inflation, employment, Treasury yields and central-bank communications. Then decide whether your estimate deserves to change.

Your advantage isn't blindly following the crowd. It's discovering where your reasoning differs from the crowd — and investigating why.

2. Three ways retail investors can play

My preference is to start with the first route. It can improve your decision-making without requiring you to risk money on every headline.

If you trade contracts, understand their settlement rules, fees, liquidity and maximum loss. Availability also depends on jurisdiction and product eligibility.

The third route is where things get particularly interesting.

3. Meet DICE: owning the businesses behind the bets

The Tema Trading & Prediction Markets ETF, ticker DICE, launched in September 2026.

An ETF (exchange-traded fund) is a basket of investments traded on an exchange, much like a stock.

DICE offers exposure to private prediction-market leaders Kalshi and Polymarket through special-purpose vehicles (SPVs), alongside publicly traded companies connected to trading and financial-market infrastructure.

As of October 9, 2026, its reported top holdings included:

The two private-company positions represented approximately 11.3% combined. The fund held 39 investments and charged a 0.75% annual expense ratio.

The distinction matters: DICE does not buy individual prediction contracts. It owns companies and infrastructure that may benefit if the industry grows.

That's a different investment thesis from betting on an election or an interest-rate decision.

The potential beneficiaries include trading platforms, brokers, exchanges and settlement infrastructure. But don't assume every company with a financial logo will profit. Some holdings may benefit substantially; others may barely notice prediction markets in their earnings.

And remember: private-company exposure is not the same as buying shares in a publicly traded company at a continuously observable price.

Tema reports the private positions at transaction cost, updating them when additional exposure is acquired or an official funding round changes the reference price. Their valuations therefore don't move continuously with DICE's share price.

Access is interesting. A bargain is another matter.

4. The hidden opportunity — and the hidden trap

The bullish thesis is that prediction markets could evolve beyond sports and elections into useful infrastructure for forecasting, risk management and financial decision-making.

Imagine businesses using market-implied probabilities to assess supply disruptions, economic events or regulatory outcomes. Brokers could distribute contracts. Data providers could incorporate market prices into research tools.

That's a potential new financial-market layer.

But it remains a possibility, not an established outcome.

The first trap is confusing trading volume with revenue.

Pew Research Center's September 2026 analysis found combined monthly trading volume rose from approximately $26 billion in May to $53 billion in July. Its figures count contracts at their $1 notional value — the maximum payout if correct — rather than simply the amount traders paid.

A busy market isn't necessarily a profitable business. Revenue, margins, repeat customers and the fees retained per dollar traded matter far more than an impressive headline.

The second trap is assuming prediction markets are primarily sophisticated forecasting tools. Pew's earlier analysis found sports accounted for 80% of Kalshi's volume and 39% of Polymarket's from July 2024 through April 2026.

That makes sports a powerful growth engine — and a major regulatory vulnerability.

On October 8, Reuters reported that the National Football League supported Supreme Court review of the dispute over whether federal derivatives regulators or state authorities should oversee sports-related prediction markets.

The outcome remains uncertain. A regulatory victory could support expansion; an adverse ruling could restrict access or damage the business model.

The third trap is valuation. DICE's current private-company marks imply valuations of $35 billion for Kalshi and $12.82 billion for Polymarket. Those are substantial expectations to grow into.

And at 0.75% annually, DICE is expensive compared with many broad-market index funds.

A booming industry can still be a disappointing investment if you pay too much.

5. Your practical investor checklist

Before buying DICE, a related stock or an event contract, ask:

Understand the opportunity

• Am I buying a fund, public-company shares, private-company exposure or an event contract?
• Is my thesis based on real business economics or simply rising trading volume?
• What probability do I assign to my investment thesis succeeding?

Check the evidence

• Have I compared market-implied probabilities with independent data?
• Are revenue, customer retention and institutional adoption improving?
• Is growth spreading beyond sports and major headline events?

Protect your capital

• Have I checked the latest holdings, fees, liquidity and valuation methodology?
• Could regulation materially restrict the market?
• Do I already own overlapping financial or crypto-related investments?
• What evidence would make me change my mind?
• Can I tolerate the potential loss without damaging my financial plan?

For DICE, I'd begin with a watchlist rather than an automatic purchase. Investors who eventually buy it should treat it as a carefully sized thematic position, not a replacement for a diversified core portfolio.

6. The verdict: learn first, invest second

Prediction markets may become an important financial-information business. They may also remain a volatile combination of sports wagering, event-driven trading and regulatory disputes.

DICE offers a novel route to indirect exposure, but its private holdings, valuation uncertainty, sector concentration and expense ratio deserve serious scrutiny.

The most useful opportunity, however, doesn't require a brokerage transaction.

Use prediction markets to challenge your assumptions. Trade contracts only when you understand the risks. Buy the infrastructure only when the business economics and valuation make sense.

Because being right about the future isn't enough.

You can predict the winner, buy the wrong company and still lose money.

The real skill is knowing what you're paying for uncertainty.

Wealth Builder: Less Noise. Better Decisions. Stronger Wealth.

Investors don't suffer from too little information. They suffer from conflicting opinions, endless market alerts, fashionable narratives and too little time to separate evidence from hype.

Prediction markets create another stream of information, but interpreting it correctly is the real challenge.

Wealth Builder helps readers research investment ideas, challenge popular assumptions, identify risks and turn complicated developments into practical investing decisions — with a focus on building wealth and sustainable passive income.

The goal isn't to predict everything; it's to make better decisions and avoid expensive mistakes. Want more thoughtful investing ideas and like-minded newsletters without spending your life doom-scrolling financial headlines? Explore Wealth Builder and discover other investing newsletters here. Your next valuable insight might be worth more than your next hot stock tip.

Notes & sources

1. Tema ETFs — DICE fund page, accessed October 12, 2026: fund launch, holdings as of October 9, expense ratio, SPV structure, valuation methodology and risks. https://temaetfs.com/DICE​
2. Kaitlyn Radde, Pew Research Center, “Prediction markets' trading volume doubled between May and July, largely driven by sports,” September 23, 2026: trading-volume estimates, methodology and category trends. https://www.pewresearch.org/short-reads/2026/09/23/prediction-markets-trading-volume-doubled-between-may-and-july-largely-driven-by-sports/​
3. Reuters, October 8, 2026: NFL support for Supreme Court review of the sports-prediction-market regulatory dispute. https://www.reuters.com/legal/government/nfl-backs-supreme-court-review-betting-oversight-case-2026-10-08/​
4. U.S. Department of Justice, April 2026: criminal charges concerning alleged use of classified information to place Polymarket bets connected to Maduro's capture. See the DOJ case announcement and charging documents for the allegations and procedural status.

Abbreviations: CFTC = Commodity Futures Trading Commission, the U.S. federal derivatives regulator; ETF = exchange-traded fund; SPV = special-purpose vehicle, an entity used to hold investments; NAV = net asset value, the calculated value of a fund's underlying holdings per share; notional volume = the nominal value assigned to contracts traded, which may differ from money paid or revenue earned.

Disclaimer: For educational purposes only; not personalized financial or legal advice. Investing and event-contract trading involve risk, including possible loss of principal.

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Final three words: Price Uncertainty Wisely.