Will the Central Bank of Kenya (CBK) Governor Kamau Thugge don a dark or light suit at his next post monetary policy committee (MPC) news conference?
Prediction markets-emerging platforms where people buy and sell shares tied to the outcome of future events such as elections and economic data, will let you bet on it.
While no market is yet to offer a prediction on the colour of suit to be worn by the Central Bank Governor, a meme depicting the wager, shared widely on the internet among players in the financial sector captures the broad offerings by the prediction market providers.
How prediction markets work?
On a platform-5050 Markets-you can buy an actual contract predicting whether the USD-Kenya Shilling exchange rate will reach Sh132 or higher by December 31.
The scores as of Friday morning on October 16 gives the outcome a 44 percent of happening.
On EvenMarket, the chance of CBK lowering its benchmark rate by the close of 2026 sits at 45 percent.
Bets on the occurrence of future events contrast widely with some contracts bordering on the absurd and funny.
Back on 5050 Markets, you can predict whether comedian and actor Eric Omondi will be arrested in the month of October. The market sees a 46 percent chance that Mr Omondi is arrested or detained by 11:59pm on Halloween.
Spreadhit, a different platform, has perhaps the most controversial prediction event where participants believe in a 20 percent chance that Jesus returns in 2026.
None of these platforms are licensed yet, but Kenyans are already trying their hand at the markets as shown across various social networks such as X and Instagram.
Betting events are priced between $0 and $1 (Sh129.89). If a punter buys into an event whose probability of occurring is 43 percent, the individual will wager about 43 US cents (Sh55.85) and get a payout of $1 with the ability to make more money from buying more contracts (shares/units) for the same event.
In the early 1990s when David Moshi joined Safari Park Hotel and Casino, betting and gambling was the preserve of a few the elite even as ‘karata’ games let the common folk bet informally in towns and villages.
“Casinos were meant for a certain class, even if they were in certain places. In fact, initially, casino games were only playable with foreign currency making them available only to foreigners,” now the managing director of Velex Advisory, which helps businesses navigate complex regulatory environments tells the Business Daily.
Betting and gambling have come a long way since, fuelled largely by technology which has bridged both the demographic divide and even geographic divide.
In Kenya, modern day-mobile/internet betting and gambling-took to the mainstream with punts mostly concentrated on sporting events, especially football.
Wagers on football games, mostly European leagues, then gave way to online casinos while punters must now not wait for the weekend when most the games are played.
Technological advances can let one simulate both real and virtual games, technically letting punters try their luck against computer algorithms.
Crash games, the most popular being Aviator, where punters ‘fly’ a virtual plane and try to cash out before the plane ‘disappears/crashes’ have taken the country by storm in recent years.
As the peak of the crash games, prediction markets are emerging as the new frontier for the industry.
Across the pond, prediction markets have already taken a hold of the country, fuelled by events including the 2024 elections, new global conflicts and the recently concluded 2026 World Cup which was co-hosted by the US, Canada and Mexico.
Platforms such as Kalshi and Poly Markets have become household names in the market, with the World Cup giving the firms further leverage to penetrate the market.
Commercial breaks on US broadcasts of the World Cup games were dominated by commercials from the pair, featuring celebrities such actor Timothy Chalamet and rapper Future, who hilariously turns to the audience and asks- ‘Can you predict the Future?’
Founders of the prediction markets in America have been quick to differentiate themselves from betting as they see their firms as truth machines for what people really think and believe, akin to ‘putting your money where your mouth is’ adage.
“This is the most accurate thing we have as mankind right now,” Shayne Coplan the chief executive officer and founder of Polymarket is quoted saying.
“We are replacing debate, subjectivity and talk with markets, accuracy and truth,” adds Tarek Mansour,” CEO and co-founder of Kalshi.
Critics of the platforms have, however, been little convinced with some viewing prediction markets as unregulated and illegal gambling.
Crossing the Atlantic
As prediction markets reach a peak in the US and begin to cool off, the rest of the world is seeing an explosion of the platforms.
Africa and Kenya are naturally seen as the next home for prediction markets, mostly from its youthful population and growing adoption of digital payments and smartphones.
A GeoPoll survey published in June revealed that 64 percent of respondents in Kenya had placed a bet on at least one football game in the last 12 months.
Kenya outpaced other African peers with the high level of sports betting engagement over the period, beating Ghanaians and South African who ranked second and third with engagement levels of 60 percent and 58 percent respectively.
Gamblers in the country placed bets worth a record Sh330.5 billion in the year to June as the State eased punitive taxes on the sector.
The increased gambling craze helped the Kenya Revenue Authority (KRA) net Sh16.5 billion in excise taxes alone, surpassing its initial target by 15.9 percent.
By contrast, punters had wagered just Sh88.2 billion in the previous year.
Prediction markets are now seen as the natural extension for the industry as has been the case from the rise of online casino and crash games.
The entry of the platforms is seen as one bringing a fresh wave of participants who have not taken to betting and gambling this far.
“Prediction markets are based on predicting different events in the future. I am looking at it as an innovative way of being able to pull in certain interests into the gaming space,” adds Mr Moshi.
Belling the cat
In the US, regulating prediction markets has been an arm wrestle between the federal government and the respective 50 States.
The country wants to primarily regulate the platforms through the Commodity Futures Trading Commission (CFTC) as financial derivatives but has faced pushback from individual States and lawmakers.
The CFTC is treating wagers on the platform as even contracts with binary options,such as financial swaps and futures.
Sports franchises such as the National Football League (NFL) have differed with the federal government, insisting that prediction markets are similar to betting and want States to rein in players in the sector.
In Kenya, the Gambling Regulatory Authority (GRA) wants to regulate prediction markets, in the same way it does betting firms.
The regulator, which has recently opened the licensing period for the 2026/27 fiscal year, expects to offer a new class of licenses targeted at platforms offering prediction markets.
Peter Karimi the Director General of the Gambling Regulatory Authority (GRA) believes prediction markets have the same offering as betting firms with the similarity being that each offers a game of chance.
“The interpretation of the GRA is that gambling involves primarily games of chance and prediction by definition is about outcomes that are in the future, and therefore no skill is required,” he says.
Prediction markets however present an ongoing headache for the regulator where it must keep up with constant and persistent innovation in the industry.
The money trail on gambling activities and geographical boundaries are now blurred.
“There are two main limitations-geography and currency, some platforms are either exclusively to the United States, or are exclusively using cryptocurrency for on-boarding and offboarding,” Mr Karimi added.
“We have to prepare for the fact that marketing knows no bounds.”
Moral hazards
In April this year, the United States Justice Department charged a US soldier with using classified information to profit from prediction markets bets.
The soldier allegedly made more than $400,000 (Sh51.9 million) trading on PolyMarket based on classified information regarding the timing of the US military operation to capture Nicolas Maduro in Venezuela.
Just last month, a White House teleprompter operator was placed under investigations for allegedly using inside information to place bets and make nearly $100,000 (Sh12.9 million) on US President Donald Trump’s speeches.
The incidences reveal the risk of insider trading emerging from the loose regulation of prediction markets.
Kenyan authorities and market players say the platforms regulation would play a crucial role in the oversight of firms in prediction markets, along with sieving through the activities and events in which punters can participate in.
Certain events like politics, war, death and religion are seen as emotive, suggesting a need for restrictions and even total bans on running predictions on specific events.
For Moshi, prediction markets ought to only remain in the realm of entertainment.
“You don’t want to take prediction markets to be investments because of the emotions it can draw from you. If I’m going to watch Arsenal, Man U or Gor Mahia, it would be a 90-minute contract and then we are closed. It becomes more entertaining this way. When you speak about predictions and gaming, it should purely be for entertainment.
Several players have already approached the GRA for licensing including already existing players in the industry.
Individual firms in the sector however turned down the opportunity to speak to the Business Daily on this feature.
“At the moment, we cannot contribute to the feature, but we will make a public announcement if we decide to pursue prediction markets,” a player told this publication.
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