US: Prediction markets and the erosion of the American dream

By Kal Elsayed. First published in Islamic Finance News, 29 April 2026.

Prediction markets are defended in the US as tools of price discovery, and the theory deserves a hearing. In practice they arrive through the same smartphone ecosystem as sports betting and app-based wagering, aimed at the same retail user and the same appetite for rapid, event-driven gains. For younger Americans who already find homeownership and family formation out of reach, the wager starts to replace the plan. The harm is behavioral and distributional rather than a share of GDP: losses concentrate among those least able to bear them, and saving, investing and skill-building give way to speculation. Islamic finance offers a different theory of finance, rooted in tangible assets, shared risk and real economic value.