A Wall Street Journal investigation published Sunday found that just 0.1% of Polymarket accounts have taken home 67% of all profits on the platform, while more than 70% of users have lost money.

The analysis covered 1.6 million accounts dating back to November 2022, with the bottom 10% of traders down an average of $4,000 each. A typical user is somewhere between $1 and $100 in the red.

The numbers echo a recent academic study finding that 68.8% of Polymarket users lost money, with the top 1% capturing 77% of gains.

Kalshi shows similar patterns.

Spokeswoman Elisabeth Diana told the Journal there are 2.9 unprofitable users for every profitable one, based on data from the past month.

Kalshi Pushes Back On The Framing

Kalshi co-founder Luana Lopes Lara fired back on X, rewriting the WSJ’s headline herself: “People win more on prediction markets than sportsbooks and equities.”

Diana also told the Journal that wealth concentration is common across financial markets, and that more Kalshi users make money than day traders or sports bettors do on traditional platforms.

The Journal’s marquee anecdote is a 33-year-old former Outback Steakhouse line cook who turned $2,000 into $41,000 trading on Kalshi, then bet his entire bankroll on a single mention market wager about whether A$AP Rocky would say the word “rapper” on Jimmy Fallon.

He lost it all and is now living in a Detroit homeless shelter, an outcome that arguably says more about position sizing than about Kalshi.

Quants, Hedge Funds And Market Makers

The Journal reported that the markets are becoming increasingly professionalized, with quantitative firms running algorithms, paying for premium data feeds and executing tens of thousands of trades a day.

Susquehanna International Group, the firm co-founded by billionaire Jeff Yass, is believed to trade hundreds of millions of dollars through Kalshi each week, according to traders monitoring the platform’s order book.

Jump Trading is also active, and Citadel Securities President Jim Esposito said last month the firm is “absolutely keeping an eye” on the space.

Yass, for his part, has long seen the opportunity.

On a 2020 sports betting podcast, he described his role supporting what would become prediction markets as “an MFG, a mission from God,” before adding that he also expected “to make a lot of money.”

The Journal analyzed more than 35,000 of Kalshi’s mention markets and found that average “yes” bettors lose 11% of what they wager, returns worse than most Las Vegas slot machines.

Polymarket did not immediately respond to a request for comment.

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