# The World Hasn't Gone Mad

In June 2025, Kalshi unveiled an ad campaign with the slogan “The world’s gone mad, trade it.” The ad was one of the first TV ads to ever be entirely generated by AI, and its content quickly was met with a slew of parodies and jokes all over the internet.

I must agree the ad was quite funny. I admire Kalshi and Polymarket in terms of their business, but I have some concerns about the objective of the ad.

It’s not that you can’t lose an enormous amount of money on prediction markets, but the win rate and general “fairness of the game” is much more optimal for the average trader. Prediction markets also provide some sort of valuable utility in the form of [calibrated forecasts](https://calibration.city/) (i.e. events predicted by market at X% resolve YES X% of the time), rather than sportsbooks that offer miscalibrated odds that are essentially meaningless. Therefore, we should be shifting away from sportsbooks and towards PMs, while also trying to not fuel gambling additions, which many hoped would be solved by more reasonable advertising, not the slop we’ve been getting recently.

Sportsbooks such as Fanduel and DraftKings should not be legal. I believe, as most do, that a country’s first and foremost goal is to protect their citizens. What are we allowing now? We are permitting degens who aren’t using any form of logic or reasoning to take negative EV positions against the house that needs to rig special offers to turn a profit, like a casino (which should also not be legal, but that’s besides the point).

Sportsbooks are negative EV because they slightly inflate probabilities so they sum to >100%. If the true probability of a football game is 50% one team wins, 50% the other, a sportsbook would inflate those probabilities to something like 52% and 52%. Here’s an expected value calculation in that scenario:

    EV = P(A) * (net profit if A) + P(B) * (loss if B)
    
    net profit if A = 1/0.52/2-1
    net profit if A = 0.92308
    
    loss if B = 1
    
    EV = .5 * 0.92308 + .5 * -1
    EV = 0.48077 - .5
    EV = -0.01923

No matter how skilled you are, it’s highly improbable to win unless you manipulate bonuses.

Prediction markets offer bets against counterparties such as human traders, bots, and AMMs. On average, PM positions are neutral expected value.[^1^](https://itsnotgambling.substack.com/p/the-world-hasnt-gone-mad#footnote-1-185351030) It offers more opportunities to make a profit by using advanced strategies and unique worldviews. This is the core difference between PMs and sportsbooks, and it’s why they should be treated legally under their own individual class.

But an alien in a Kalshi jersey downing a pint of beer seems less like a display of the product and more of a heartless, thrifty way to attract what some people would call “dumb money.” While this may be good for smarter traders, it leans to the more unethical side of degenerate gambling, and probably doesn’t help Kalshi’s legal cases.

Modern prediction market exchanges should remain a commonplace for trading futures contracts, not hubs for mindlessly depreciating the value of your bank account.

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