Many pre-modern people believed gambling was bad and suppressed it.  

If you think about it, your life insurer is a bookie betting that you’re not going to die this year. If he wins, you pay him. If you win, he pays your estate. (I play that game to lose.) 

Because it was like gambling, insurance was illegal in Western countries until just a few centuries ago. 

Insurance is a bet, but bets can be insurance too. I would love to bet on whether Wellington gets a giant earthquake. Not because I’m a gambler or because I want an earthquake – far from it. I just trust bookies more than I trust EQC to pay out if it happens.  

We’re lucky that insurance was legalised. It’s useful. But it might not be a coincidence. When commerce needed insurance, lawyers found a way to make it sound less like gambling. 

If we focus on what things actually do, parts of the stock market are also gambling. Futures markets let you make bets on what the price of something will be next year. That bet is also insurance against the price moving against you.   

Every insurance contract can be expressed as a bet, and every bet, as a contract on a futuresmarket. 

Drawing regulatory lines is then fraught. 

New Zealand used to have a beautiful little prediction market called iPredict. The Financial Markets Authority (FMA) regulated it as a futures exchange. It was not considered gambling. The Securities Commission said iPredict’s contracts met the definition of futures contracts.

In 2015, a National-led government strangled it with red tape. I still miss it.  

Last week, the Department of Internal Affairs (DIA) told overseas prediction markets Kalshi and Polymarket not to let Kiwis trade with them. According to Newsroom, DIA now thinks prediction markets violate New Zealand’s gambling laws.  

National-led coalitions stopping me from trading on prediction markets has become too predictable.  

Kalshi is regulated by America’s Commodity Futures Trading Commission, the CFTC. Larger markets have finally figured out that prediction markets are really useful. In 2025, Kalshi saw almost $24 billion in trading volume.  

Last week, Kalshi announced a partnership helping institutional investors price and manage risk.  

Fund managers will likely start building new products incorporating prediction contracts. Whether Kiwis will ever be allowed to trade them may depend on whether the FMA has a boxing match with DIA. I’d like to bet on that fight. 

Sadly, continued regulatory incoherence seems the safest bet.