Ross Gerber Slams Prediction Markets As 'Rigged,' 'Manipulated,' Warns Investors Are Misreading Data As Fact
On Saturday, Investor Ross Gerber criticized prediction markets, calling them "rigged" and "manipulated" and warning that investors are misreading them as reliable indicators.
Gerber Calls Prediction Markets ‘Rigged‘
In a post on X, Gerber pushed back against the growing use of prediction market data in financial and political analysis.
"People continue to quote predictions markets as some sort of fact. This is a bad way to look at things," he wrote.
He added that the platforms are vulnerable to distortion, claiming, "These markets are rigged and manipulated by the people who want you to think they are winning."
Gerber further described them as "one big corrupt market place that should be shut down."
Prediction Markets Face Growth
Prediction markets were gaining attention as institutional investors explored their potential as tools for forecasting and hedging economic and geopolitical risks, according to Interactive Brokers Chair Thomas Peterffy.
He said the platforms could improve decision-making by aggregating real-money predictions and may eventually serve as widely followed indicators of economic probabilities, similar to interest-rate futures.
Interactive Brokers also expanded its offering through IBKR ForecastTrader.
Prediction markets were reflecting high-profile speculation, including bets on Elon Musk potentially becoming the world's first trillionaire.
Traders on Polymarket gave Musk a high probability of reaching the milestone, driven by expectations tied to a possible SpaceX-xAI valuation and his existing stakes in Tesla and other assets.
The industry faced growing criticism from the American Gaming Association, which accused regulators of weak oversight and warned that states had lost significant tax revenue.
President Donald Trump weighed in on the issue, defending prediction markets and urging regulators to maintain "exclusive authority" over platforms such as Kalshi and Polymarket, while also criticizing several political opponents.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy of Ross Gerber