AI AND PREDICTION MARKETS
Can artificial intelligence shape the future of prediction markets as financial dynamics? THE PREDICTIVE POWER OF AI MAY SHIFT EVENT CONTRACTS AWAY FROM BETS MAKING THEM MORE LIKE THE FINANCIAL INSTRUMENTS THEY CLAIM TO BE ARGUE JUAN CAMILO CARRASCO AND LIZETH ACELAS
T he rise of prediction markets has reopened the debate over the boundary between gambling and financial markets. While in the United States the regulatory discussion continues to oscillate between treating these products as bets or as financial instruments, this article examines the impact of artificial intelligence on that debate. Through the development of tools based on machine learning and advanced analytics, AI may progressively reduce the element of chance by strengthening predictive capabilities and informational asymmetries between participants. From this perspective, such evolution could shift prediction markets towards being understood as financial vehicles, unless the gambling industry develops regulatory alternatives capable of responding to these new dynamics.
Introduction Over recent years, prediction markets have become one of the most sensitive debates within both the gambling industry and financial markets. In the United States, the regulatory discussion has largely focused on whether these products should be understood as traditional bets or as financial instruments based on information and economic projections. The debate remains open and is currently before the courts. As noted in the recent NEXT article “The Great Divide” 1 , those defending these markets as part of the financial sector argue that they share important similarities with traditional financial mechanisms, including trading activities and the analysis of future events, while also attracting a different type of consumer from the traditional gambling user. However, much
1 NEXT.io, “The Great Divide”, March 2026.
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IMGL MAGAZINE | JUNE 2026
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