An increasing number of gamblers are placing bets on measles cases in the United States. In January alone, approximately $9 million was wagered on projected cases via the Calci and Polimarket prediction markets, suggesting that these predictions may accurately model infection spread.

Prediction markets operate by allowing participants to buy and sell shares related to the outcomes of specific future events. Each market poses a question regarding upcoming events, enabling bets on “yes” or “no” outcomes, with the share prices determined by collective betting behavior.

For instance, if 86% of bets forecast a “yes” outcome, a “yes” share costs 86 cents. Should the event occur, the successful bettor would receive $1 for each share bought, while the unsuccessful bettor loses their stake.

The concept of prediction markets originated from scientific research. In 1988, University of Iowa economists Robert Forsythe, George Newman, and Forrest Nelson sought a method to forecast federal elections, ultimately developing a betting market model. This model enabled researchers and students to place modest bets predicting election outcomes.

Market predictions proved to be quite accurate. In 2003, Philip Polgreen, an infectious disease researcher at the University of Iowa, encouraged economists to integrate disease prediction into these markets. Polgreen stated these markets were established “on an ethos of education and public benefit.”

Recently, however, prediction markets have commercialized, driven by companies like Kalshi and Polymarket. While these entities comply with U.S. regulations set by the Commodity Futures Trading Commission, they face mounting criticism from federal and state authorities.

For example, these markets have been criticized for allowing bets on conflicts such as the wars in Iran and Ukraine. Critics deem this practice as immoral. In February, a trader known as Magamiman made $553,000 by accurately predicting the timing of Ayatollah Khamenei’s removal from power.

Following the prediction, Khamenei was reported dead on February 28, 2026. This event raised ethical concerns among some U.S. Congress members regarding the potential monetization of state secrets.

Alarmingly, measles cases are reportedly on the rise across the United States, prompting the emergence of a betting market centered on this illness. While the ethical ramifications of such wagers are complex, there may be a beneficial side to this practice. Spencer J. Fox, a professor at Northern Arizona University forecasting diseases like COVID-19, views the measles prediction markets as a potentially rich data source.

For instance, the June 2025 prediction market anticipated roughly 2,000 measles cases for the year, a number very close to the actual reported total of 2,087. “Our model generated numerous worse predictions,” explained Fox.

Epidemiologists employ multiple data streams (vaccination rates, genomic data, and climate data) to forecast disease outbreaks. “Everyone seeks an advantage in predicting infectious diseases, and we continually explore new data streams,” noted Fox, adding that measles forecasts are rare due to the disease’s “highly stochastic” nature.

Cognitive scientist Emile Servan-Schreiber, CEO of prediction market firm Hypermind, believes he understands why measles predictions maintain such accuracy. He suggests these markets leverage “the wisdom of the crowd,” with “amateurs providing cognitive diversity to offset their lack of expertise.”

Nevertheless, Fox emphasizes that prediction markets cannot simply replace epidemiologists’ scientific models. For example, these markets do not account for as many explicit predictions and lack detailed granularity concerning future outcome probabilities. “We would need to make thousands of bets each week on all the different predictions we’re formulating,” he remarked.

Furthermore, Fox asserts that only specialists can accurately predict rare events. “If we don’t invest in developing expertise for infectious disease predictions now, we will be overwhelmed by the next coronavirus.”

Kalshi and Polimarket have yet to respond to requests for comments from New Scientist.