STUDENTS RISK ALLOWANCES ON PREDICTION MARKETS

James Klusener 

@jamesklusener

Prediction markets recently emerged as a new and addictive form of gambling for some South African students, who traded on various global events. As of now, prediction markets, such as Kalshi and Polymarket, are still not officially available in South Africa (SA), since they lack the necessary regulations and laws that other gambling sites such as Betway adhere to, although they are still easily accessible. 

According to an article published by News24, the Financial Sector Conduct Authority (FSCA), which regulates the conduct of financial institutions in South Africa, had confirmed that neither platform had applied for a license to operate in South Africa. 

However, that hasn’t stopped some students from engaging with these markets. One such student, who wants to remain anonymous, mentioned that when they place bets on Polymarket or Kalshi, it’s intentional and requires a deep understanding of current events. They also mentioned how random these markets can be, as it’s hard to correctly guess oil prices or the situation in Iran when the world is so uncertain. They mentioned that it can come down to pure luck in many cases. 

Considering the fact that South Africans, in an article from Business Day, generated a total gambling turnover of R1 500 000 000 000 in 2024, which represents the total ‘handle’, or the full amount of currency wagered by bettors, including both wins and losses. 

It’s easy to see how the official and wider introduction of prediction markets in South Africa could lead to even more money being spent on gambling and related activities. Especially among students who use their allowance money to participate in betting, most commonly through sites like Betway. Prediction markets will likely only increase participation.

Edited by Isabel Burgers