Why prediction markets failed to see the American pope coming

The wisdom of crowds is no match for the whims of the Holy Spirit.

The wisdom of crowds is no match for the whims of the Holy Spirit. This week, the ascension of the first American pope surprised many, including the theoretically neutral online betting sites Polymarket and Kalshi. The sites, which allow people to wager on the outcomes of various events, brand themselves as “prediction markets” on the theory that when there’s money on the line, they are better, in aggregate, at anticipating results. While they’ve had some successes — notably, they bested traditional polls at predicting Donald Trump’s 2024 election win — the market for betting on the next pope was blindsided by the conclave’s election of Chicago native Robert Prevost, now Pope Leo XIV. Before the white smoke went up, Kalshi and Polymarket both cast Prevost as a long shot, with odds between 1% and 2%, which means a handful of gamblers who bet on Prevost won big. On Polymarket, one user turned a bet of a little over $1,000 into a $63,683 profit, according to the site’s public ledger. Betting markets allow you to wager on just about anything and have a mixed record of “predicting” outcomes. While they called the 2024 election correctly, they notably fumbled in 2016, when the “smart money” suggested British voters would reject “Brexit” and that Hillary Clinton would defeat Donald Trump.