Prediction Market Investing: Without Placing a Bet

Prediction market investing sounds like a contradiction. If prediction markets are platforms for betting on events, how do you invest in them? Luke Lango’s answer is the picks-and-shovels approach: invest in the companies that build the infrastructure, not in the outcomes of specific events. As we detail in our full review of the Prediction Markets presentation, this is the core of Lango’s thesis. For the full backstory, see our Prediction Market Education: What Investors Must Learn article. The details are in our Money Valuation: The $1 Trillion Prediction Market article.

The Core Idea

Lango’s message is that you can profit from prediction markets “without placing a single bet.” Instead of trying to predict who will win an election or whether the Fed will cut rates, you invest in the publicly traded companies that build the platforms, process the transactions, and provide the infrastructure for prediction markets.

This is the same logic that drove the best infrastructure investment theses during previous technology booms. You do not need to know which specific company will win. You need to know whether the category is growing. And the data says it is. Trading volume is up 400 percent in recent quarters. The market could grow from $64 billion to $1 trillion by 2030. For more on the infrastructure stocks, see our article on prediction market stocks.

The Structural Forces

Lango identifies five structural forces driving prediction market growth.

First, regulatory clarity. In 2024, Kalshi won a landmark court battle against the CFTC, establishing that prediction markets on political and economic events are legal in the United States. This removed the primary regulatory uncertainty that had kept the industry from scaling.

Second, a better product. Prediction markets are more convenient than Las Vegas, sports betting apps, or local bookies. They are available on your phone, cover a wider range of topics, and operate in real time.

Third, real-time forecasting. Broadcasters, analysts, and political campaigns are using prediction market odds as a real-time forecasting tool. When CNN or Fox references “the markets” on election night, they are increasingly citing prediction market data.

Fourth, institutional interest. Goldman Sachs has a team analyzing prediction markets and is reportedly building a prediction market trading desk. When Goldman Sachs enters a category, it signals that the category has reached a level of scale and legitimacy.

Fifth, economic stress parallel. Lango draws a parallel to the 1970s, when economic stress drove the Vegas gaming boom. The argument is that economic uncertainty drives people toward prediction markets as both a hedging tool and a speculative outlet. For more on the regulatory landscape, see our article on what is the Kalshi app.

The Free Tickers

Lango reveals two free tickers before the paywall. Robinhood (HOOD) is the main pick. Robinhood has partnered with Susquehanna to offer prediction markets to its 27 million users. The key competitive detail is pricing: Robinhood charges a flat $0.01 per contract, compared to Kalshi’s variable fees. For a platform with 27 million users already comfortable trading stocks and crypto, adding prediction markets is a natural extension. For more, see our article on Robinhood prediction markets.

Coinbase (COIN) is the side bet. Coinbase owns the rails that every Polymarket trade rides on, since Polymarket runs on the Polygon network and uses USDC for settlement. Coinbase is the primary U.S. exchange for USDC and is rolling out prediction markets to its own user base. This means Coinbase benefits from prediction market growth regardless of which specific platform wins. For more, see our article on Polymarket stocks.

The Market Sizing

The $64 billion to $1 trillion projection for 2030 is an estimate, not a guarantee. But it is in the range of what serious analysts have projected for the growth of event-based trading. Even if the actual number comes in at half the projection, that is still a massive growth rate from the current $64 billion base.

The 400 percent volume growth in recent quarters reflects the early-stage, rapidly-scaling nature of the category. When a market grows 400 percent in a short period, the infrastructure companies that serve it see disproportionate revenue growth because their costs are largely fixed. This is the leverage that makes prediction market investing attractive. For more on the broader market, see our article on prediction market stocks.

Betting vs. Investing

The distinction between betting on prediction markets and investing in prediction market infrastructure is the key to Lango’s thesis. When you bet on a prediction market, you need to be right about a specific outcome. If you bet that a certain candidate will win and they lose, you lose your money. Your success depends on your ability to predict events better than the collective wisdom of the market.

When you invest in the infrastructure companies, your success depends on the growth of the category, not on the outcome of any specific event. If prediction markets grow from $64 billion to $1 trillion, the infrastructure companies benefit regardless of who wins any election or whether the Fed cuts rates. This is what Lango means by profiting “without placing a single bet.” For more on the investment approach, see our article on investment sites for beginners.

The Goldman Sachs Signal

Lango suggests Goldman Sachs could launch a prediction market trading desk as soon as October 13th. This specific date is unconfirmed. Goldman Sachs has a team analyzing prediction markets, but the launch of a trading desk has not been officially announced. This is the weakest claim in the presentation and should be treated with appropriate skepticism.

However, the broader signal is real. Goldman Sachs does not allocate resources to categories it considers trivial. The fact that a team is analyzing prediction markets signals institutional interest, which adds credibility to the growth thesis. For more on the institutional angle, see our article on the Nasdaq private market.

This is not financial advice. Always do your own research before investing.