From sports and elections to economic indicators and geopolitical conflicts, prediction markets, like Polymarket and Kalshi, allow users to put money behind their expectations for the future. In the first full weekend of the NFL season alone, billions of dollars were traded on the industry's two largest platforms, with similar increases expected as the season continues and midterm elections approach. 

So, what exactly are prediction markets? Why have they surged in popularity? And what concerns arise with that growth? 

On the latest episode of Generating Buzz, Sudheer Chava, the Alton M. Costley Chair and Professor of Finance in the Scheller College of Business, shared his thoughts on how they operate, their differences and similarities to online gambling, and the challenges in regulating them. Chava also serves as director of the Financial Services Innovation Lab and the Center for Finance and Technology.