Clicking “Yes” on whether Taylor Swift will meet Pope Leo this year is not the same thing as swallowing a mouthful of OxyContin. 

I want to clear that up before some bozo blows up my inbox with 953 words of righteous indignation. 

 (And yes, that is a live wager on Kalshi.) 👇

But while the products are different, Kalshi and Polymarket are actively deploying the same market playbook as Purdue Pharma —ya know, the sweethearts who were responsible for the opioid crisis— with uncanny similarity

This whole thing is giving me the icks. And icks should be shared. 

So here, for your reading pleasure, are the three tactics the prediction markets have stolen from the Purdue Pharma playbook.

You’re gonna need a cold shower after this one.

👉 When “growth” requires society to stop calling your product what it has always called it, you probably shouldn’t be growing it.

And now — the story behind why this advice matters. 👇

Purdue Pharma encouraged ordinary people to consume opioids through an FDA-approved medical prescription. Kalshi and Polymarket encourage ordinary people to gamble through a federally regulated derivatives exchange.

Here’s what’s happening in both cases— 

A dangerous and addictive product entered the market wearing the cloak of legitimacy and cultural respectability, and scooped up millions of people who never would have considered adopting that vice.

This process deserves a useful name, so I’m calling it category laundering.

OxyContin slyly arrived in a person’s life… 

Every surrounding institution communicated legitimacy before the patient swallowed a damn thing. To a reasonable person, taking this medication was not a risky decision. A shit-ton of respected gatekeepers had already answered the important safety questions.

Prediction market contracts arrive in a person’s life dressed in a similarly powerful institutional wrapper — which can really f*ck with how a reasonable person interprets the underlying risk.

Kalshi and Polymarket enable people to gamble inside the legal architecture of federally regulated derivatives trading. 

That classification allows them to present their platforms as financial exchanges, invoke CFTC oversight as a signal of legitimacy, and argue that federal commodities law preempts state gambling regulation. 

But beyond the regulatory maneuvering, category laundering is, at its core, psychological manipulation.

Most of us probably wouldn’t wander down to Skid Row to pick up a few stamps of heroin, or venture through the doors of a casino with a fistful of cash every day. 

We view those behaviors as monstrously deviant.

They are the opposite of the kind of behaviors we attach to the identity most of us desire — being a healthy and productive person.

But when those behaviors are re-categorized to align with our identity as a healthy person (taking our medicine), and a productive person (investing in financial markets), the psychological barrier that keeps us from doing dangerous and addictive shit gets obliterated. 

Hell-to-the-no.

Category laundering removed the psychological barrier to opioid use, but Purdue still encountered other forms of friction that prevented ubiquitous adoption of their dangerous product.

So the company set out to remove every practical obstacle between a patient and an OxyContin prescription.

They assembled one of the most aggressive sales operations ever deployed to expand beyond pain specialists, and target primary-care physicians. 

They distributed coupons for free prescriptions. 

They supplied doctors with “education”, peer speakers, and conversion tools.

And they spent a million bucks to create a clinical decision-support alert system intended to increase prescriptions of opioids — under the veil of physician support. 

There is one big reason this is all relevant:

The consumer didn’t have to go searching for a dangerous controlled substance. Purdue Pharma made it laughably easy to access, then practically shoved it down their throats.

Kalshi and Polymarket have done the same thing for gambling.

At one point in the not-too-distant past, if a person wanted to place a wager, they needed to seek out a casino, locate a bookie, visit a racetrack, or deliberately create an account in a sportsbook. Oh, and go to a State where the type of gambling they wanted to do was legal, if they cared about that sort of thing.

Every additional step created another opportunity to recognize that they are, in fact, gambling —which is an inherently risky activity— and fully acknowledge that risk.

But now, we’re all walking around with a goddamn casino in our pocket. And not a normal casino, where an in-depth knowledge of casino games or sports betting is an unofficial prerequisite for beating the house. 

The casino in our pocket allows us bet on f*cking anything.

We no longer have to adapt our knowledge and interest to the nature of the wagers. The nature of the wagers adapt to our knowledge and interest.

Prediction marketplaces were strategically designed to collapse the entire friction-filled journey of traditional gambling into a few easy swipes of your thumb.

“Frictionless” adoption is a noble goal for businesses that deliver banal problem-solving products.

But for a business that delivers an addictive and potentially life-destroying product, like opioids and gambling, friction should be baked into every step.

Come on people, haven’t we learned our lesson on this one?

Purdue sold pain relief. And as someone who has been living in chronic pain for the last few years, I will tell you that pain relief is not bullshit.

Prediction markets sell improved forecasting and information aggregation. And that isn’t necessarily bullshit either. 

Their thesis is simple and compelling: putting money on an idea forces people to reveal their true beliefs. And the power of crowd data is pretty remarkable. That’s why prediction markets are so bloody accurate at predicting elections.

There is no denying that real-time probabilities can make society smarter about the future. The utility is there, and Polymarket is so damn good at this that they recently struck an exclusive data partnership with Dow Jones (despite major scrutiny from its journalists).

But here’s the question:

Does the positive social impact outweigh the negative social impact?

We don’t know yet. But my “prediction” is… no.

A weather contract helping a farmer manage crop exposure sounds like respectable financial innovation. A contract concerning an election may produce information that journalists and voters find genuinely valuable.

But go look at the live contracts on Kalshi and Polymarket right now. Seriously go. I’ll wait.

I eyeballed it, and it looks like about 15% of the contracts gather useful sentiment data that can be used for social good.

The rest is shit like this. 👇

Purdue was able to keep OxyContin so accessible for so long by touting its legitimate pain-relief benefits, and squashing concerns about addiction.

Prediction markets are using the same strategy.

They’re playing up the social benefits of the data they collect, and playing down the 19-year-old draining his bank account to bet on the Rotten Tomatoes score for Super Troopers 3. 🍅

(Yes, that is a live contract on Kalshi right now.)

I’m actually pretty indifferent to gambling as a vice.

I’ve killed a few harmless afternoons at a $5 Blackjack table, filled with watered-down free cocktails and boisterous conversation with my tablemates. I’ve put a few bucks on horses and hockey games over the years.

And I also have no problem with folks who choose to participate in whatever way suits their budget and their lifestyle. All the regulation in the world shouldn’t keep people from making their own mistakes choices. Live and let live, man.

What pisses me off is deception.

The opioid crisis was one of America’s biggest f*ck-ups, and it happened because something very dangerous was dressed up as something very safe, and a bunch of vulnerable people got hurt.

So when I see another potentially dangerous product using the same market playbook, I get a little anxious.

Stay safe out there, folks. ♥️

Cheers! 🍻

-Kristin :-)

P.S. — I don’t just write Drunk Business Advice — I bring it to life on stage. And I’d love to speak at your next event. Hit reply or click here to learn more.