Prediction Markets Face a Growing Problem With Language Rules

It was the fourth quarter of the Pinstripe Bowl at Yankee Stadium on Dec. 27 when Penn State defensive end Dani Dennis-Sutton darted between two hapless blockers and sacked Clemson quarterback Cade Klubnik. Or as the game announcer described it: “Dennis-Sutton wraps him up and turfs him!”

This was good news for Penn State fans, en route to a 22-10 win. It might have been even better for the traders on prediction market platform Kalshi who’d wagered that the announcer would say the word “turf.” At 3:18 p.m., right after Dennis-Sutton’s sack, the market’s odds on “Yes” surged from 25% ...