Sell Securities? What Prediction Markets Mean

The question of whether to sell securities to participate in prediction markets misses the point of Luke Lango’s thesis. As we detail in our full review of the Prediction Markets presentation, Lango’s central argument is that you should not be selling securities to place prediction market bets. You should be buying the securities of companies that power prediction markets.

The Infrastructure Approach

Lango’s core message is simple: you can profit from prediction markets “without placing a single bet.” The idea is that 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 picks-and-shovels approach. During a gold rush, the people who sold picks and shovels to miners profited whether or not any individual miner struck gold. Lango applies the same logic to prediction markets. The category is growing. Trading volume is up 400 percent in recent quarters. The market could grow from $64 billion to $1 trillion by 2030. You do not need to know which events will occur. You need to know whether the category is growing.

The two companies Lango identifies as infrastructure plays are Robinhood (HOOD) and Coinbase (COIN). Robinhood has partnered with Susquehanna to offer prediction markets to its 27 million users at $0.01 per contract. Coinbase owns the crypto rails that Polymarket trades run on. Both are publicly traded stocks you can buy through any brokerage. For more, see our article on prediction market stocks.

Why Not Just Bet Directly?

There is nothing wrong with participating in prediction markets directly. Platforms like Kalshi are legal, regulated, and straightforward to use. But Lango’s point is that betting on prediction markets and investing in prediction market infrastructure are fundamentally different propositions.

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 an election 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. For more on this approach, see our article on prediction market investing.

The Structural Forces

Lango identifies five structural forces driving prediction market growth. First, regulatory clarity: Kalshi won a landmark court battle against the CFTC in 2024. Second, a better product: prediction markets are more convenient than Vegas, sports betting apps, or local bookies. Third, real-time forecasting: broadcasters and analysts are using prediction market odds as a forecasting tool. Fourth, institutional interest: Goldman Sachs is building a prediction market trading desk. Fifth, economic stress parallel: the 1970s Vegas gaming boom mirrors today’s macro environment.

These structural forces suggest the category is not a fad. The regulatory milestone alone is significant. Before the CFTC ruling, prediction markets operated in a gray area. Now they have a clear legal framework. For more on Kalshi, 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, with 27 million users and a flat $0.01 per contract pricing that gives it a competitive advantage. Coinbase (COIN) is the side bet, owning the crypto infrastructure that Polymarket depends on. Both are real, widely-held stocks that you can buy through any brokerage. For more on Robinhood’s role, see our article on Robinhood prediction markets. For more on Coinbase, see our article on Polymarket stocks.

Should You Sell Securities to Bet?

If your question is whether to sell existing stock holdings to place bets on prediction markets, Lango would say no. His thesis is the opposite. You should buy stocks of prediction market infrastructure companies, not sell stocks to fund prediction market bets. The infrastructure approach lets you participate in the growth of the category without taking on the risk of specific event outcomes.

The one caveat is that the “October 13th” date Lango cites for a potential Goldman Sachs prediction market desk launch is unconfirmed. Goldman Sachs has a team analyzing prediction markets, but the specific launch date should be treated with appropriate skepticism. 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.