Is It Gambling?
Introducing DexPress, the native Dex.Do market journal
We are in the eye of a very peculiar storm. Legacy gambling associations in the United States (a.k.a. the casinos) have recently begun lobbying and conducting propaganda campaigns against prediction markets. Or, at least, propaganda is one way of calling it. The claim is simple: that these markets constitute unlicensed gambling, and ought to be regulated as such. Native American tribal leaders have filed complaints with the federal government on claims that these markets violate the Indian Gaming Regulatory Act. And a Massachusetts judge has already ruled that Kalshi cannot operate sports prediction markets in the state, pending appeal.
At the same time, large crypto players and prediction market providers have formed their own trade group: Predict Action. They call it a ‘Coalition.’ Their purpose is identical: to lobby, to shape definitions, to contest the claim that prediction markets are gambling. DraftKings and FanDuel, two huge sports betting platforms, recently dropped out of the American Gambling association and began repositioning themselves in an attempt to get into the prediction market space.
So the question presents itself: are prediction markets gambling, and does it matter? The answer is not straightforward, because the definition of gambling isn’t always completely clear. If it were, there would be no need for competing coalitions rushing to define it. As usual with legal terms, they require interpretation.
The distinction, however, is simpler than it appears. In comparing prediction markets with casinos or betting services, we must first state the fact that, in the latter, you always bet against the house. It is exceedingly rare that, when gambling, you play against another player on equal terms. In fact, even when such a game occurs, an operator (the house) is always present at the table, always participating in the game. And as we all know, gamble for long enough, and you find that the house always wins. This operator sets the terms, runs the books, and retains the power to intervene. As much as prediction market CEOs may insist that there is some unique guarantee that means prediction markets aren’t gambling, this is not set in stone. There is nothing inherent that prevents them from acting as bookkeepers, taking the other side of trades, or shaping outcomes through design. They can be run just like any other betting platform. In such cases, they are gambling. And we are inclined to believe such versions of these markets should require a license.
Unlike with casinos or online sports betting platforms, prediction markets do not have to be gambling, and herein lies the importance of the interpretation we mentioned before. And thus the entire question turns.
A feature of Dex.Do is the ‘Shake’: Send a link to someone online, someone you disagree with, and make a bet to resolve the matter. The ease of use resembles Zoom. And the settlement is automatically enforced on-chain at the resolution of the event, rather than being enforced by reputation. This is indistinguishable from a bet between friends. The participants coordinate directly with each other, and not through an intermediary. The structure removes the very element that defines gambling.
It is very common for two individuals to make a friendly bet on the outcome of any number of things, global as well as personal, and no-one would ever really equate that to a casino. And rightly so. You don’t need a license to place a bet against a friend. It is, in fact, a time-honoured tradition that acts as an important social indicator or trust and camaraderie between two individuals of differing opinions. When an argument goes on and on without an end in sight, two people can decide to forgo the prickly unpleasantness to which many such quarrels fall victim. The incessant tautologies, the going around in circles, the verbal jousts with no good cause can be discarded. And the point settled with a bet.
One of the attractions of such bets is that, not only do they not need external coordination, but they also benefit from not having any. This absence of coordination is the defining feature. These bets do not require an operator. They benefit from not having one. There is no book, no override, no authority standing above the participants. The entire principle is that they are self-resolving. Involving an arbitrator is almost a faux-pas, and if a party defaults, they risk damaging the friendship or their reputation, which makes honouring the bet all the more symbolic of those very things.
Dex.Do does not create truth, but disciplines beliefs through consequences. The broader problem is not disagreement, but polarization without constraint. The internet did not cause this; its structure allowed it. Monopolized platforms optimized for engagement stripped away the conditions for convergence. Openness remained in name, not in function.
Bring this back to prediction markets, and the distinction becomes precise. This quality of non-coordination is what separates a bet that is called gambling, and one that is not. A bet on a decentralized prediction market is virtually no different to a bet between friends. When people deploy smart contracts within the market, they coordinate between themselves, not thanks to an external party. By definition, it is impossible to have a decentralized house. A decentralized operator of anything is a contradiction in terms. An operator is singular and privileged. Whereas a decentralized system by definition includes all participants and doesn’t prescribe an artificial hierarchy between them. Its rules are fixed. Its execution is automatic. And it is characterized by the impossibility of any human interference: i.e. the immutability of its Code as its Law.
Agreement on what happened precedes any argument about what it means. Dex.Do offers a system that can produce shared reference points, even minimal ones, and hopefully restore the basis for discourse.
We believe that the internet today could do well with just such a market. A place where, rather than endless arguments on social media where people can’t even agree on established facts, let alone their interpretations, users can instead wager with each other to settle the matter. No house, no middle-man, just send a link and place a bet. In this way, a prediction market can be a good tool to make the internet a less toxic place. Rather than trying to build consensus in some artificial way, a system that is concerned with social cohesion should take into account that human behaviour and opinion is always and necessarily going to be fraught with biases. And that one of the most surefire ways that individuals combat their biases is by losing something. Not losing something big, just losing something which their bias ought to have confirmed as theirs forever. Every bet has a winner and a loser, and nobody who places many bets ever wins or loses all of them, thus the regression to the mean can allow us all to interpret events in a more sober, considered way. Instead of a predatory algorithm that is designed to amplify the echo chamber and make citizens angry and distrustful of each other (all to maximize ad revenue), we can instead build a platform where people consider their opinions and put their money where their mouth is.
A stated aim in building Dex.Do: That it may provide the conditions for a less toxic internet.
We go off of the opinion that one of the main threats to the fabric of society is this vitriolic polarization we all know and hate so much (how ironic). Go online today and you won’t spend long finding people with opposing points of view who can’t even agree on the facts, let alone on how to interpret them. We could, and much to our dismay, say that the internet has become the main culprit in the polarization-dynamic. But saying that would be attributing personal agency to a technology, whereas the real issue lies in the dynamics that allowed the internet to become monopolized. And as happens in all monopolies, this ended up gutting the spirit of openness, plurality, and innovation that once characterized it.
It need not be so. We state that the Web can once again be a vehicle for bringing people closer together, albeit not in a sentimental Kumbaya, We Are The World sort of way. All we claim is that if there is a general consensus regarding what did or did not happen, that is the basis for civil discourse. If there is civil discourse, then there is less fertile ground for propaganda and coercion, and isn’t that what it all comes down to? And maybe that is the true definition of the so long hoped for and ephemeral Web3, fixing the toxicity of this mad experiment called ‘The Internet.’
Examination #1
Can all opinions be financial markets?
Prediction markets today say: “We provide a lot of information (a.k.a. the news) about what’s happening in and around, out and about. Whatever you put your money on, we will allow you to make an ‘informed decision’ about what your next move should be.” Critics say: “Sports betting platforms do exactly the same! They give you updates on a game so you can make a ‘better bet.’” So what’s the difference? We doubtless call the news essential. Whereas football injury reports are fodder for escapism. So which one is it?
Whatever the claims, all a prediction market does is aggregate sentiment on the news; that is to say, it aggregates people’s beliefs that events will turn out one way or another, expressed in odds. Many people who hype-up prediction markets have come to term this as a source of truth, which we believe can be the case, but it has to be designed around that intention. Despite most prediction markets insisting that their status as a ‘source of truth’ is paramount, the fact is that today, as a recent Financial Times article points out, prediction markets make most of their money on ordinary sports betting, and then we get back to the prior question: are you just betting against a house?
You have no doubt heard the phrase so often tied to prediction markets: “In the future, we will financialize any difference in opinion.” This is, in a sense, a shibboleth of the proverbial ‘space.’ Taken literally, believing ‘everything will be financialized’ is naïve. So far, most of this ‘financialization’ has been confined to a narrow class of events. I.e. speculating on sports: events in one narrow sector which has little bearing on the world at large. But this shibboleth is actually far more than that, and something far more ominous—the statement is not wrong, but misunderstood.
Dex.Do does not discover truth; it compresses conviction into price, forcing belief to persist under risk rather than perform under applause. As we’ve said before: a derivative is a claim on an outcome. Once outcomes can be specified and settled, they can be traded. Dex.Do extends this logic. It does not introduce a new structure, but applies an existing one to a wider class of events. The underlying mechanism is identical. Once liquidity and programmability are sufficient, every tradable event becomes a position, and every position demands a price.
Financialization is not an ambition. It is, in fact, a reflection of what happens to all financial markets when they cross an event horizon of sufficient liquidity, programmability, and institutional indifference to meaning. The phrase “financialize any difference in opinion” sounds like crypto-utopian bravado, but fundamentally, it describes a well-documented transition that occurs when markets reach this threshold. Once that boundary is crossed in prediction markets, disagreements cease being empty positions taken for the sake of argument and become positions like positions in a market.
This outcome is purely structural and not dependent on moral appeals or politics. It arises when a market has sufficient liquidity to make entry and exit inexpensive and enough standardization to formally represent claims. In the case of prediction markets, the absence of an authority in place to pre-adjudicate truth, so that participants are free to be wrong at their own expense, means claims are admitted to the market solely on the basis of specification of form and settlement conditions, rather than epistemic validity.
Disagreement is thus expressed as priced exposure rather than argumentative consensus. And as we know, any claim that can be broken down into discrete units becomes tradable. When disagreement is no longer primarily rhetorical (“I think X will happen”) but operational (“I am willing to stake capital on X”), and discourse transmogrifies into market, asking why you believe something becomes less important than how much you are willing to pay to be right.
Dex.Do does not “financialize opinion” as an ambition. It is not an ideology. It is a threshold condition. The moment a claim is legible to settlement, disagreement ceases to be argued and holding an opinion ceases to be a rhetorical matter. When you can price, trade, and resolve your beliefs, opinion stops being something you say and becomes something you have to stand behind.
People’s true convictions are a prickly pear. Some believe a thing without substantial experience or knowledge of a matter, while others can’t accept a truth that stares them in the face. What’s more, the internet is full of people who are looking for exposure without an underlying belief of any kind, significantly stunting the coherence of online discourse. But this question of beliefs, and the seemingly-universal search for exposure to express them doesn’t need to be mediated by attention, outrage, or performative consensus. Instead, prediction markets allow belief to be expressed through risk-bearing commitment rather than speech alone, leading to information being expressed as a financial action.
This is not because markets absorb all ideologies, but because price is simply a way to summarize disagreement. It combines different opinions into a single number without needing to resolve the underlying intellectual conflicts. In this sense, prediction markets don’t turn opinions into financial assets; they simply reveal that an opinion was already a hidden preference for risk.
But the ‘financialize every difference in opinion’ slogan overreaches in one crucial way. Not all differences in opinion are event-resolvable. Markets require a terminal condition, an unambiguous settlement rule, and bounded time horizons. Many opinions (moral, aesthetic, metaphysical ones) do not resolve cleanly into events. They persist, metamorphose, reconstruct themselves unreliably, or refuse closure. So yes, you can bet on an election outcome; but no, you cannot coherently settle the meaning of justice, at least not without smuggling in some third-party or authority or just a good deal of subjectivity. So really it would be more correct to say that the future is not one where all differences are financialized, but one where all differences that can be made legible to settlement pressure will be. And once this happens, the markets will stop caring whether they are being used as markets, and become infrastructure for adjudicating uncertainty, regardless of domain. That is powerful. And it is also dangerous. Because markets are excellent at pricing belief under risk but terrible at distinguishing truth from incentive alignment, a fully financialized disagreement space risks replacing epistemic humility with capitalized confidence, and being right and being well-funded could begin to blur.
So should we reject the ‘financialize everything’ narrative? Or should we seek a solution? Well, prediction markets aren’t going anywhere. That much should be clear. And it should also be clear that ‘the news’ is one of the main appeals of prediction markets. And we have a nagging suspicion that the solution is found in that dynamic, thus begging the question:
Examination #2
Do you have to trust the news?
DexPress is the who, what, where, when, and how of decentralized editorial news, opinion, and analysis.
(We’re not really proposing a correction to financialized disagreement. We aim to establish a counter-institution that metabolizes it.)
The creation of DexPress stems from the need to make sure this non-house, decentralized, interface-less, dark platform—one that aspires to being a source of truth—can provide the information that befits a paper of record. Is there some ephemeral, but hopefully rigorous, editorial standard which any such paper requires? Building a decentralized news outlet, we claim, is only possible on prediction markets. And we believe it’s essential that decentralized prediction markets have decentralized news.
Traditional media and social networks are set up like this: anyone can loudly say anything, risking nothing except reputation (and often not even that). This leads to lots of noise and little responsibility, ‘opinions’ that are worth almost nothing. And so, ultimately, it is hard to tell who really believes what they write. A prediction market is arranged the opposite way: if you’re truly confident, you can put money on an outcome. This immediately creates ‘skin in the game’ and words start to have a price.
DexPress is media built on top of Dex.Do markets so that only materials by people who actually have a stake in the topic make it into the feed, and so that this can be proven without revealing a wallet, thanks to ZKPs.
Our principle is: “Put your money where your mouth is.” If you want attention, show that you are willing to make a real point, and back it up with something you can lose if you’re wrong. This is where the whole point about fixing polarization comes in. If this sounds like another ‘financializing everything’ narrative, think again. This is not a stated aim in and of itself when thinking about the future of these markets. Rather it is just one possible outcome of a system which can define, in terms of Price is a Probability, people’s beliefs in what will, and will not, be the outcome of quantifiable events. As well as their quantifiable quotients across a vast spread of sectors.
It is obvious that it takes time for such a network to develop. As well as buy-in en masse. And for the proper mechanisms to be put in place to incentivize growth, hopefully in an ethical way. It is obvious, too, that this is true of any network. But we believe that Dex.Do is particularly well poised to develop into the ultimate decentralized prediction market, offering an alternative to the social media platforms that profit from arguably the pressing issue facing the digital world in our time: the feeling that nobody can agree on anything anymore. Especially online, where opinions are warped and weaponized. All with nothing to back them up. TikTok conspiracy slop. Rage-baiting podcast clips. National politicians that claim their word is gospel and that anything else is fake.
The solution goes something like this: you want to make a statement? Then put something on the line. It’s not just ‘put your money where your mouth is’, it’s also ‘don’t put your mouth where your money is not.’
Anyone can write a piece for DexPress. They just have to indicate if you are ‘for’ or ‘against,’ and then they need to place a bet on that belief. We believe that is the core of journalism: Looking at the world, or a part of it; evaluating everything there is to find out about it; and then coming to a reasoned conclusion about a possible outcome, and arguing the point correctly. To ensure that this core holds, journalists have always had to prove their credentials: in a digital space where everyone is constantly vying for attention and clicks, where the media landscape is so fragmented that even the most well-established papers don’t get nearly the same reach, and where journalism is fast becoming a more and more precarious profession, being willing to publicly wager on your point and risk losing money for it, is, we believe, one of the boldest statements a journalist can make to prove their credentials.
The news (as in: providing news) has always been an entirely economic question. The effects these markets can have on this dynamic could end up an avenue for the de-monopolization of the news, because by design no gatekeepers and no Rupert Murdochs are allowed, and diversity of opinion is encouraged. DexPress is a place for journalists (right as well as left) and traders (day as well as institutional) to predict and offer reasoning on their predictions and insight on the events of the world, free of bullshit and politicos’ spin and newsroom politics. Ultimately, quality journalists really should be making money from placing these bets and writing these columns, because journalists should be able to correctly predict a fair number of events a fair amount of the time, otherwise what are they doing in the profession?
Unlike on websites where people discuss stocks, but where they can only indicate their portfolio, but never prove it (meaning they can write about which stocks they own, but they could also lie about which stocks they own), on the DexPress, because everything is on-chain, the bets an author makes can be proven and indicated with the article. This is because the DexPress’ content is on the blockchain, and one can only deploy this smart contract if one places the bet. Because Dex.Do is a dark order book, it means the details of positions should not leak just because you did something publicly. Therefore publication works through the author attaching a ZKP (zero-knowledge proof) that proves the fact that they have a stake in this market but does not reveal whose wallet it is, the size of the position, or any other private mechanics they want to keep hidden.
Authors will write only when a market is a place where people have a position and an interest. Content is an extension of the position: explain your thesis and present arguments and facts and links; influence attention and discussion and attract liquidity and debate (in a good sense). It’s worth noting that this media does not hide conflicts of interest. It is built out of them. This is not “neutral journalism”; it is a media of positions.
“But!” You may now exclaim. “How does this differ from ordinary social networks?”
Answer:
You can’t post without skin in the game: publication requires a stake. And privacy is preserved, as the proof of the trade is provided without revealing the wallet/position. (Privacy? Remember that? You have that on Dex.Do—And, we can almost guarantee, you have that pretty much nowhere else).
It’s important to understand in advance that this media is not about ‘objectivity.’ It’s about arguments backed by a stake. It’s normal here that people will promote their cases, argue, write counter-theses, and ‘play’ with rhetoric. But this will always be under the condition of ‘money in the game.’
The DexPress doesn’t try to re-introduce epistemic purity or neutral authority; instead, it forces the market to externalize its own psychology. By making publication inseparable from exposure, and making exposure provable without being extractable, it prevents the most corrosive failure mode we identified: capitalized confidence masquerading as truth. Here, confidence must persist to matter. Time-weighted stake turns voice into a function of endurance, not bravado. At the same time, the DexPress’s design reintroduces epistemic humility. And not by moral appeal, but by mechanism. Because DexPress is openly a media of positions, conflicts of interest stop being scandals and become the raw material of sense-making. Readers are not asked to trust authors; they are asked to observe incentives. The ZKP layer preserves privacy while still anchoring speech in consequence. In that sense, the DexPress doesn’t fight financialization by rolling it back; it fights it by making it legible, time-bound, and self-disclosing.
If the danger of post-horizon markets is that being right and being funded blur together, DexPress’ wager is that forcing funding to speak continuously, publicly, and under decay is the only way to keep that blur visible, and therefore contestable.
Finale
Those more inclined to paranoia…
…might question our integrity when we assert that Dex.Do is not gambling.
In the unregulated space of prediction markets, a clear regulatory avoidance strategy exists: maintain resistance to any accusation of gambling until the market achieves a scale where regulators are compelled to negotiate on the market’s own terms. And you’d be right to suspect this. It’s precisely why you should maintain a healthy skepticism and never trust us blindly. Always consider the possibility that any prediction market platform you use could in theory be called gambling, rather than accepting claims to the contrary at face value. The burden of proof is on whoever operates the damn thing and… oh, wait. Herein lies the one crucial distinction between Dex.Do and ‘The Others’ whom you so justifiably, nay, wisely distrust: Even if you completely reject our arguments and believe Dex.Do is gambling, the core facts remain that it is decentralized, meaning it is not operated by anyone, there is no central interface, and nothing that could constitute a ‘house.’
Consequently, everyone who is or ever will be involved, be they the Acki Nacki core development team, financial institutions, journalists, traders and speculators of every ilk, are always and necessarily participants on equal footing. We are entirely unable to manipulate the odds, refuse payouts, or implement the clandestine schemes we anticipate will surface in centralized prediction markets. It is precisely because it eliminates the need for trust that decentralization matters so.
There are already legitimate arguments to be made that Polymarket and Kalshi’s use of in-house trading teams (which they say are designed to boost liquidity) is comparable to a sports book. And in fact that’s just what it is: if a platform hires traders to bet against users, that’s really no different to what a bookie does. A good definition of a ‘decentralization test’ is quite simply: is it or is it not impossible for a platform to have a centralized-majority that can favour the odds by-design? If it is, then you pass.
Don’t trust us? Good! Don’t trust anyone. Be paranoid—board up your windows and stock up on your neuroleptics. But remember this: always conduct thorough research, examine the data sources, and, whenever feasible, read the underlying source code. While the statements we make about Dex.Do are biased, undeniably… the arguments are not. To support our claims, we welcome scrutiny of our decentralization according to this test. We welcome it from far and wide, including from you, dear reader.