Prediction markets are often more accurate than polls, expert forecasts, and pundits. Prediction markets harness the wisdom of the crowd to aggregate massive amounts of diverse information. Generally speaking, the more liquid a market is, the more accurate it is. Prediction markets are not perfect, but over the long run liquid markets should be as accurate as any other source of information. In other words, money talks

Maybe. If you make $600 or more from your prediction market winnings, then you’ll need file those winnings under a 1099-K. The IRS has set a $600 threshold for declaring income from third-party payment platforms. If you’re only making a few dollars here and there, you don’t have to worry about this.

No. Companies offer prediction markets on diverse topics. They include rainfall amounts by certain dates, award show outcomes, and various economic and financial indicators. In 2020, there were even markets on the date the first COVID-19 vaccine would be available. Whatever your area of expertise, there’s probably a legal prediction market available for you.

No. Prediction markets are not licensed gambling companies. Some are futures markets, which are among the most risky and volatile financial markets. Kalshi and ForecastEx are registered financial firms with the CFTC, so prediction markets are closer to finance than gambling. However, prediction markets ride the fine line that separates gambling from high-risk investing.

A good prediction market lets you trade in real time. Lag between buying a trade and having it confirmed can prevent sharp traders from profiting movements they’re insightful enough to take advantage of. Good prediction markets fulfill the basic requirements of a great financial exchange. They payout promptly and have enough money to accommodate the market’s transactions. Finally, great prediction markets are made of people with relevant knowledge about the market’s subject and independently voice their diverse opinons on the exchange.

Many prediction markets allow you to deposit with a bank account, debit card, or credit card. Some, like Polymarket, run on cryptocurrencies and require crypto wallets. Polymarket accepts USD Coin, so anyone who wants to bet on Polymarket must convert their dollars into USD Coin.

Usually, withdrawals go to your bank account, credit or debit card, or your crypto wallet. Earned winnings are yours to withdraw when you’re ready. If you’ve redeemed any bonus credits at a prediction market, some platforms have restrictions on when they can be withdrawn. Check your platform’s bonus terms if it offers one.