Not just America, everything is.
With stock market, at least we can somehow stop the bad actors, insider traders, corporate manipulation, pumps and dumps - with prediction markets, there is no way.
With prediction markets? Next to impossible. The markets being tied to crypto makes it even worse - things get harder to track, jurisdictions get blurry, proving becomes a ping pong between bureaucracy. And proving something becomes moreso a question of free will - if I decided to do X and then someone bets millon dollars on me doing X when odds are low, how do you prove I haven't decided to do X before? Will you prevent me from exercising my free will because of suspect insider trading? What if I am a president/senator?
Years ago, I was a kid who discovered online betting - often it was the only time I could place bets on MMA events, especially because it wasn't as popular as it is now. Even then, the gambling sites had "Other" options where you could bet on presidents, popes, landing on mars etc. The new markets aren't that much different, but are just using a nicer way to talk about it.
It isn't gambling, it's prediction.
You aren't a gambler, you're a "hyperinformed high iq individual predicting the geopolitical moves". Just like crypto gave people the identity crutch of a "tech investor", this gives them the identity crutch of a "geopolitical strategist".
But in the end, it is still just gambling - wrapped in a nice ego stroking suit, but gambling none the less.
As a matter of adopting sensible definitions, I think you need to draw the line somewhere between what is gambling and what is not.
If the risk taken can, in principle, be shifted in your favour (i.e. to produce positive expectation) through application of skill, then it isn't gambling. For example, in my mind, betting on whether you will win a game of chess is not gambling. On the other hand, if you cannot influence the outcome in your favour through skill, then it is gambling. Roulette is generally a good example of this (with the caveat that in some very specific circumstances it's possible to beat with skill).
If we're limiting the definition to merely risk-taking (you might win or you might lose) without factoring in skill, then virtually everything in life becomes gambling. For example, you gamble when you deposit money in the bank because it might go bust.
There's also the legal definition, in which case it's just a matter of checking whether the jurisdiction you are in considers the activity to be gambling or not.
I would say that gambling with skill component is still gambling. For example, in blackjack you can limit your losses by following a basic strategy, which is a 2x2 matrix with rows containing the value of your hand and columns containing the open dealer card.
If you can obtain an edge through a skill component (card counting in blackjack), some people wouldn't call this gambling anymore, but I would still call it gambling myself. Someone doing this for a living is a professional gambler.
What for me would be a sensible definition is that a bet/gamble has no other goals. Putting money in the bank/investing in a stock reallocates capital, which can be invested by someone. The fact that it is a risk-taking endeavor is merely a side effect. I would say the same goes for selling/buying insurance for your car.
So for me, the difference between betting and putting money in the bank/investing is that the primary goal is something different than the risk-taking activity.
Does this not boil down to the distinction being one's intent? I play poker occasionally, for example, and my primary goal is to win money not to take risk. Does that make it meet your definition of investing rather than gambling?
> “…betting on whether you will win a game of chess is not gambling.”
It’s the money aspect that makes it gambling. Just ask Pete Rose.
Stock market integrity is important because of their function in the economy. Scamming of gambling addicts is tragic but not detrimental to society.
That is one of the takes I've ever read. There is a reason gambling is so tightly regulated worldwide, and it's certainly not because governments hate easy vice tax revenue. Gambling debt destroys family units, increases poverty rates (most notably for the children of gambling addicts -- the consequences are not localised only to the person making the bad decisions), and increases violent crime rates. Gambling is massively detrimental to society. There can be arguments in allowing people to do things that are detrimental to society in the name of freedom, but it's not a great thing to pretend those detriments don't exist at all.
Do you know of any studies that can accurately show the correlation between gambling and societal costs? On the surface the link makes sense to me and seems like it should be right, though I'm not sure how we could have tested it in a controlled way to really know the link exists.
> Scamming of gambling addicts is tragic but not detrimental to society.
This isn't true.
each 10 per cent increase in gambling expenditure in NSW results in more than
4,500 additional assaults
2,800 additional home break-ins
1,300 additional break and enter (non-dwelling) offences
1,400 additional motor vehicle thefts
2,300 additional stealing from motor vehicle thefts
3,800 additional fraud offences each year
> Stock market integrity is important because of their function in the economy
Some might argue that people - including gambling addicts, and those impacted by their addiction - might possibly be more important than one of many possible financial mechanisms for free enterprise.
Is that NSW = New South Wales? I'm asking because Wikipedia lists New South Wales as a population of only 8.5 million, and those crime numbers are insanely huge relative to that.
You are ignoring the point of TFA. Kalshi & Polymarkets provide a marketplace to monetise political decision-making, a.k.a corruption. This is definitely detrimental to society.
>Scamming of gambling addicts is tragic but not detrimental to society.
It certainly is at scale.
Just so we're clear on the standards of solidarity here, someone murdering your entire family would be tragic but not detrimental to society. How much should society do to prevent that from happening?
Depends on how many of those gambling addicts there are.
If a huge enough portion of the population try to solve the statue quo of their economic problems by betting all on red, that's not gonna be great for society, including those who don't gamble.
The gambling industry itself is a net drain on society.
What is the societal benefit provided by it?
Until people are making money and affecting the world. Let's say that you're someone close to Trump and you have betted a very large sum that Trump should take a certain action. Are you going to try to make him take that action even if at that point it turns out to be the worst decision for the country and the world?
Except when "gambling adicts" end up as a cover for money laundering and funneling cash to people to buy influence.
> Scamming of gambling addicts is tragic but not detrimental to society.
I used to believe that. With the legalization of all the sports betting and how fast it can drain a gambler which can then affect the gambler's family, I'm now pretty much on the other side of the fence.
Just like we banned public smoking because of the effects of secondhand smoke, I'm pretty convinced that the secondary effects of gambling means it needs to go back to being banned. I don't see an obvious way to legislate gambling to prevent the auxiliary victims. It doesn't help that getting maximum profit as a bookie means being part of a group of the scummiest people on the planet who will stoop to anything to drain people of their money as fast as possible.
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> These markets are also manipulable. In 2012, one bettor on the now-defunct prediction market Intrade placed a series of huge wagers on Mitt Romney in the two weeks preceding the election, generating a betting line indicative of a tight race. The bettor did not seem motivated by financial gain, according to two researchers who examined the trades. “More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout,” they wrote. The trader lost at least $4 million but might have shaped media attention of the race for less than the price of a prime-time ad, they concluded.
Reminiscent of PG's essay about the submarine[0]: it's another way of attaching credibility to a 'news' item you're pushing.
This is just implausible. Nobody with a brain is going to throw away 4 million on the speculative hope that a prediction market price is going to magically manipulate media coverage on the election.
That's a lot of money for an individual, but if the (dark) money originates from a donor or PAC, it's just another campaign expense.
It's still a lot of money from a donor or PAC for this kind of change. I find it remarkably hard to believe that lines moving on Intrade would have a bigger impact than an equivalent amount of money spent on battleground state television ads.
>As this new kind of writing draws readers away from traditional media, we should be prepared for whatever PR mutates into to compensate. When I think how hard PR firms work to score press hits in the traditional media, I can't imagine they'll work any less hard to feed stories to bloggers, if they can figure out how.
I think it's safe to say they figured it out.
> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money.
I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on them in a way that makes them known.
If I knew someone wanted me dead, of course I would want a prediction market on it, and if the odds suddenly shifted dramatically in favor of my death, I would use that as a trigger for whatever defense strategies I had in place. Someone has really good reason to bet a lot of money on the prospect that I'm about to die. It's probably someone who knows of an active plot in motion to try to kill me! The sooner I can find out about that, the better. I would much rather give them an incentive to make that known somewhat earlier than wait.
I feel like there must be some big piece of this puzzle that I'm missing that makes it so these cannot operate the way I imagine them, but I haven't heard anyone explaining what it is. Someone fill me in on what I'm missing here?
If the prediction market is for a non-trivial amount, it's likely someone is going to kill you in exchange for the money the prediction market offered them. The prediction market isn't acting as a prophet here, it's acting as a plausibly deniable murder for hire service and you are its victim.
The people "betting against" you dying just paid to have you killed.
This was discussed on polymarket with the Galve Goat burning bet and assume it's why
Essentially it's a big straw goat in Sweden that vandals sometime set on fire.
Right towards the end as the probability approaches zero there's a huge profit incentive, "done deals" usually go under well under 1¢ meaning 100-200x returns.
A US man once traveled to Sweden to set the goat on fire, he was caught, fined $20k(?) and then fled the country before paying the fine.
Risk reward in a situation like this absolutely creates a situation for prediction markets similar to the observer effect in physics, it's no longer predicting the future and instead altering it.
Exactly, these markets exist in the real world, so as their size and use increases, the more likely the odds will influence real world events. Look at sports betting for a much smaller example. Match fixing is known. Electricity markets are gamed for individual profits at the detriment to everyone and the stability of the system, even with regulators trying to keep things stable. Enough "Market for all the things" already..
The type of people who have the power to change decide these type of events already are able to use that power to make money in a thousand different ways. These markets will change nothing.
> Enough "Market for all the things" already..
See, there are two major flavours of pro-market attitudes. The first one is "if we allow many independent individuals to try their own approaches to a problem and let the people with "better" approach to personally profit from it handsomely and make them compete against each other in an environment with objective-ish judgement of "what is better" instead of "impress the (inevitably corruptible) officials to be judged victorious and awarded the fortunes", and also manually guard and regulate against several universally known ways to sabotage such competition, then we'll be able to channel human ingenuity into solving difficult to solve technical problems while also rewarding those who are able to come up with (and implement) such solutions with low overseeing overhead". Of course, such an attitude isn't strictly speaking "pro-market", it's been around since ancient times; hell, the USSR of all places had this attitude in spades until about the 70s or so.
The second one is "Nah, we don't have to try and think about anything ourselves, just let people fend for themselves, they'll figure it out, and it won't have any unforeseen bad side effects, why would it; markets are magical like that!" Yeah, about that...
Right, a market is a small tool of larger systems. That’s fine, hard to get right but can make systems better. Type two just seems to be the cargo culted everywhere..
Yes, OOP might have chosen a suboptimal example here. But for general newsworthy events, people aren’t going to be in positions to manually make them happen. And no person in a position to start a war would do it to affect a Polymarket bet.
The prediction markets aren't yet at sufficient scale to purchase a war, you mean. People start wars for money all the time though. If they become of sufficient scale, people will purchase wars on them.
There's already lots of examples where they are of sufficient scale, like paying the press secretary to shut up after 64 minutes. Or paying someone to falsify ISWs map of the front line in Ukraine.
> But for general newsworthy events, people aren’t going to be in positions to manually make them happen.
Many newsworthy events (and even more events that actually reach prediction markets, many of which are at best marginally newsworthy) are actions ultimately pivot on a human decision, so the first part isn’t true.
> And no person in a position to start a war would do it to affect a Polymarket bet.
Are you saying “no one would start a war with personal financial gain being part of the motivation”, or “it is impossible for the payoff of a prediction market bet to be of sufficient magnitude to alter the calculus in even the tiniest iota in that case”?
Because the first seems extremely clearly false, and the second seems improbable in the case where the first is false.
> And no person in a position to start a war would do it to affect a Polymarket bet.
No person in position to start a war and to influence economic policies would become a crypto scammer... erm wait...
I can see someone in the Trump admin absolutely using a betting market when they can influence the outcome. At the least I'd also bet that someone in the T admin was the person who knew about Maduro being captured.
...but many people in positions where they can start a war or cause some other highly visible event of any sort probably will start turning to Polymarket to make money in the course of their work
Which makes the prediction market more accurate.
Until the tail starts wagging the dog.
"You provide the gambling, I'll provide the war"
Not really, for the same reason entrapment isn't usually seen as an accurate way to gather information for law enforcement. See also Goodhart's law and overfitting.
Eh… sort of? In a sense, they become less accurate, because the prediction market is the causative event, not an independent observer.
> And no person in a position to start a war would do it to affect a Polymarket bet.
Are you fucking kidding? Based just on current events, that is absolutely not a statement you can make without at least trying to prove it.
If you do try to prove that you will fail as the idea that people would start wars for profit is as old as wars.
Just evaluate the sentence you've just created. How many people exist who have the capability to start wars or influence the start of wars? It's a lot. What else do you know about these people and their motivations?
It isn’t just the people who can start a war. It’s also normal people who can.
Imagine if 10 million people bet on starting a war vs 5 million who say no war. Those net 5 million people are going on social media saying why the war is justified. They’ll vote in war mongers. They’ll support the military. The bet literally influences the result. It’s a self fulfilling prophecy.
It's not a bounty, though, right? It operates like other trading markets? So unless they have big money to wager, they don't have big money to gain. If it's hovering at, say, 10% odds, it's not like they can automatically 10x their money because other people have to take the opposite side. There would have to be a lot of liquidity in the market for their large bet not to move the odds, and as the odds move, they make less money.
> So unless they have big money to wager, they don't have big money to gain.
It requires that they put down collateral (the purchase of the the yes bets) that they lose if they don't meet the contract, so they do have to have starting capital.
> because other people have to take the opposite side.
That is to say that there must be people offering the bounty.
The size of the bounty isn't defined by the price of the contract, but the total upside available in the order book.
> and as the odds move, they make less money.
They have to put up more collateral for the remainder of the contract if they want that upside - but they make all the money that they already put up collateral for.
> The size of the bounty isn't defined by the price of the contract, but the total upside available in the order book.
But one person doesn't get the whole thing. ALL the people holding that side of the contract split the payout, in proportion to the size of their holdings in that side of the market.
I think if I use hypothetical numbers, it will help me explain how I think it works, and maybe this will help someone figure out where my error is.
Let's imagine the market is about whether I will die by the end of the day. So far, there are $500,000 in total bets in the market, and there are 5,000 shares in this market. Let's say it's currently sitting at only 10% odds that I'm going to die. I think that means 4,500 shares, or $450,000, is on the "No" side and 500 shares, or $50,000 is on the "Yes" side. Do I have that right so far?
If nothing changes about the market and I'm still alive at the end of the day, everyone who holds a "No" share splits the $500,000 pot, correct? There are 4,500 of them, so they each get $111.11 per share.
But suppose someone has a solid plan to kill me by the end of the day. They decide they want to dump $50,000 in on the "Yes" side. That's not going to buy them 500 shares, because they would need someone willing to sell 500 shares at the current price. They'll actually get well under 500 shares, and probably not even half that many, and they'll still be splitting the pot among the other people who already have the 500 shares on the "Yes" side. So they're still at not even half the "Yes" side of the market. They can probably double or triple their money, but we're talking about making another $50-100k on top of getting their own $50k back. It's not like they get the whole $500k.
That's what I mean when I say it's "not a bounty." A "bounty" makes it sound like, "If you're the one who kills smeej, you get $500k," but that's not what's happening here.
Lots of people might be willing to try to kill me for $500k. A heck of a lot fewer are going to be willing to try to kill me for 2-3x whatever capital they can come up with right before the hit.
Am I at least understanding this part of it correctly, how the payouts actually work? If I'm not, that would go a long way toward helping me figure out what I'm missing.
> I think that means 4,500 shares, or $450,000, is on the "No" side and 500 shares, or $50,000 is on the "Yes" side. Do I have that right so far?
No - there's always an equal number of contract outstanding on both sides of the bet. A contract is a promise from the person who sold "no" to pay the person who bought "yes" a dollar if the outcome happens. These contracts can trade from anywhere between 1 cent to 99 cents corresponding to a 1% chance to a 99% chance that you would die*. The odds the market reports is just whatever price the last contract traded at (or alternatively whatever price sits between the current open offers to buy/sell contracts. In liquid markets these tend to be the same).
> If nothing changes about the market and I'm still alive at the end of the day, everyone who holds a "No" share splits the $500,000 pot, correct? There are 4,500 of them, so they each get $111.11 per share.
They each get $1 per share. Their profit is $1 minus how much they paid for the share. It's not (meaningfully) a shared pot which is divided up, it's a fixed amount per share.
> They decide they want to dump $50,000 in on the "Yes" side. That's not going to buy them 500 shares, because they would need someone willing to sell 500 shares at the current price.
Ignoring the numbers at this point - you're generally right that they need to find someone willing to sell them the contracts. The existence of a large number of outstanding contracts doesn't guarantee this - they might be held by someone who is holding them to minimize the payout a hitman could get for killing you for instance.
The most direct guarantee is the order book The order book is the collection of open offers "I'm willing to sell X yes-contracts at Y price" that the market has for potential purchasers. The hitman can look at this and snatch up all of these simultaneously (up to some race conditions in the market - we can mostly pretend those don't exist but they do introduce some risk on the hitmans side). This can be thought of as the size of the currently available bounty.
There's a chance the market will continually over-price these yes contracts - and the hitman will never kill you as a result. That would be a huge mistake on all the financially motivated holders of yes contracts though - their positions go from worth something (if they sell to the aspiring hitman) to worth nothing if they don't price them low enough. In general you should expect the market to find the price at which a hitman will carry out the contract - so long as there's enough money in the market in the first place.
* Ignoring transaction fees and the time value of money, it's close enough for this discussion.
But the hitman still does not get the entire value of the contract. The hitman gets the value of the number of shares he can afford to buy, but that's not the whole contract by any means.
I think I understand what you're saying about the pricing. Am I correct in saying, then, that if the odds are 90% in favor of my living through the contract, the "No, smeej won't die today" price should be close to $0.10 (again, ignoring fees and the time value of money)?
If the hitman tries to buy in with 10% of the total funds already in the market, the odds/price are going to shift hard. It's going to devour a huge chunk of the order book. Any market that suddenly has someone come in at 10% of the whole market value is going to get a massive trading wick. So yeah, he'd get some shares at $0.10, but he's probably going to eat the open order book to a much higher cost. He can 10x some very small portion of his money (however many shares are on the book at $0.10), but he can only 5x his money at $0.20, or 3x at $0.33.
Even if we assume he does have $50k to dump into the market, I still don't see how he's going to more than triple his money, which is a heck of a lot less than taking the entire market's value as though it were a bounty.
(I don't know how much volume is available, nor do I endorse betting on either side of things like this)
Yes - we agree on how the pricing and odds work now :)
The hitman shouldn't expect to capture the value of the entire open interest. The market here is serving to negotiate the bounty with speculators betting that too much was offered taking the rest (a privilege they pay for by buying contracts that only pay out if they don't take too much). It's a curious form of negotiation since the people paying for the murder don't participate... but should (in a very theoretical efficient market) come to a "fair" (large enough to get the job done, and no larger) payment for the hitman.
2xing your money in a night is a huge payout, I think you're overestimating how high the multiplier on the capital requirement needs to be. That said, if you aren't, and you need a 5x payout to find a hitman then no rational speculator would purchase contracts for more then $0.20...
Why would the opposing side of that exact same bet allow themselves to be fleeced of all that money for free?
You're asking why someone hiring a hitman would be willing to part with their money?
Because that's what money is for, to purchase things, like hitmen (apparently).
OK so its much a shallower thought than I anticipated.
Why go through the "prediction market" at all then? The hitman still killed someone, payments are not anonymous in this market, and its certainly not clean. Further, you share the pot with however many are involved, proportional to the allotted bets on each side and presuming binary prediction. And if the winds change on the market for the bet proportional to the "hitman's" side, you lose out on dollars that would otherwise be paid to you (the hitman).
And it'd be so easy to stiff the hitman just by equalizing the positions by timing it.
All that risk for something that's far simpler to just pay directly?
> Why go through the "prediction market" at all then
It's there. It's not actually easy to find hitman for hire. This is a publicly advertised market for it.
Plausible deniability. We weren't paying for the witness to be murdered, we were expressing our confidence that no one would murder the witness.
Price discovery. The market tells you how much you need to pay a hitman (if you overpay hedge funds swoop in and take the difference, telling you for next time. If the hedge funds underestimate the cost they end up paying a significant penalty to the people who they prevented from hiring a hitman).
Crowd funding. The market means that every can chip in however much they want towards paying the hitman, and they only end up paying if its enough. In fact the middlemen who accepted the bets in the meantime may promise to pay some small amount of damages if enough isn't collected.
It is impossible to stiff the hitman, and there is no risk for the hitman that the "winds change". The hitman takes out the entire "yes" position before committing the murder. If it's not enough, they don't commit the murder.
The opposing side is getting paid, not getting fleeced.
Asymmetry of information. Fixed bets depend entirely on a small enough group with the ability to influence the outcome, keeping their mouths shut.
> I'm trying to understand what the criticism is here
You're correct in your understanding of prediction markets with respect to traders using insider information. There are a couple things going on here. One is the subtext from most news media now that Technology Bad. New technologies are treated as guilty until proven innocent, because that is a more engaging narrative for readers. So in this case, those covering this stuff immediately latch onto the rich get richer, insider trading viewpoint, and that gets reported without any analysis of why that might actually be desirable.
Second, prediction markets, in trying to become broadly accessible to "normal" people and desiring liquidity, need a marketing strategy that is understandable. They can't put out a Robin Hanson article as marketing material. So they market by appealing to something people do already understand, which is gambling. The public has this idea now of prediction markets as a way to make money, not as a tool for learning information. So the default perspective on insider trading is now one of unfairness: somebody used their privileged position to make money. The correct perspective is, in fact, that prediction markets are providing users with value by eliciting information from those insiders, information that the public would not otherwise have. The latter perspective is mostly foreign to degenerate gamblers, and the marketing campaigns of Kalshi and Polymarket aren't helping.
> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on them in a way that makes them known.
Except the paragraph you quoted nullify this benefit
> The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro
So we learnt nothing. For the entire duration the stock is online, its pretty much 50/50 then suddenly 1 day before, the ticker spikes to yes.
Yes, but it spikes BEFORE the attack begins, which means we learnt someone thought there was a string reason to believe things were about to change earlier than we otherwise would have.
That's the whole point, isn't it?
And if you're going to tell me the paragraph I quoted nullifies what I've said, would you please explain how? Obviously I don't currently understand it the same way you do, and I have asked for help understanding what I'm missing. Saying, "You're missing it," isn't helpful.
The missing piece is the distinction between a market that observes reality and a market that instigates it.
The criticism is about the systemic risk of converting prediction markets into "Assassination Markets"—mechanisms where the payout is not a reward for foresight, but a bounty for action.
In the case of Maduro, the operation cost around $300 million so a $400,000 payout isn’t providing a financial incentive.
But in the case of assassination, a $400,000 payout is sufficient motivation.
> In the case of Maduro, the operation cost around $300 million so a $400,000 payout isn’t providing a financial incentive.
It is if you are spending someone else’s $300 million, and getting the $400,000 yourself.
Or if you're the military commander with the option to disobey the illegal order (to go to war without congressional authorization) or take the bribe and execute the order. "Unmarked cash" (which this is) has pretty different purposes from official funds.
I think there's a pretty good chance the person who took that money was opportunistic, this time, but $400k isn't a trivial sum of money, it's not impossible it was the difference between this happening and not.
But it's not a bounty. It's a market, right? So the payout is split among everyone on your side? And the if you try to dump a ton (measured relative to the size of the market) into the market, the price tanks because there aren't enough people coming in on the other side. You get a big wick in the trading candle, so you scoop up the much less favorable terms of the bet at higher cost.
>If I knew someone wanted me dead, of course I would want a prediction market on it [...] Someone fill me in on what I'm missing here?
The assassin might place the bet at roughly the same time as they place the bullet in the chamber. Making the prediction into a bounty. Not giving you any meaningful time to ponder the new information. The notification from your phone would be the distraction they'd use when taking aim.
> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it.
Indeed. Insider trading is a feature of prediction markets, not a bug. There are two kinds of people who participate in prediction markets:
1. People who have insider information, or at least more sophisticated predictive capability than your average person.
2. Gamblers.
In effect, prediction markets are a way to move wealth from the second group to the first. If you understand that and still want to participate, cool. It's your money, and you're allowed to gamble it away if you find that entertaining.
At any rate, given the relatively small-potatoes level of bets going on at Polymarket and Kalshi, the article author's breathless anxiety about this is a bit overblown.
> 1. People who have insider information, or at least more sophisticated predictive capability than your average person.
This bucket as you've defined it is too broad.
There are a few different kinds of non-gambler participants in prediction markets:
1. People with "insider information" as we think of it - they "know" the answer to the market because they are "involved" somehow.
2. People who aim to do superior analysis of publicly available information to produce an edge. For example, an AI firm with better hurricane prediction modeling may try to monetize that by betting on whether or not a hurricane will impact an area.
2b. People who do the work to create new information. For example, the Trump 2024 election market on polymarket famously had better odds for Trump than polling. It turned out that a mega whale was bidding Trump up because he had paid for his own private polling in battleground states and that gave him confidence Trump was going to win.
In short, it's mostly incorrect to suggest that prediction market participants are either illegitimate insiders or gamblers; there is a third class of actors that are a very important cohort: those who do the work to create better predictions and monetize their work by betting in the markets. This third cohort of professional predictors is the most important in long-term prediction market growth.
>1. People who have insider information,
I mean, most stock trading prevents insider trading, unless of course you're a in congress.
Seemingly regulators consider this a bug in every other market type, but suddenly this gambling market allows it?
> breathless anxiety about this
All fun and games until people start dying from it.
Insider trading in stocks are prohibited but not for the reason most people think. It has nothing to do with someone having an unfair advantage in an informational sense, and everything to do with fiduciary responsibility.
The CEO and executive team has fiduciary responsibility to act in the financial best interest of the shareholders. Your broker too.
If you have insider info (Obtained legally) but no fiduciary responsibility you can act on it. That’s why congress members trading US equities based on decisions they’re privy to is not, from a legal perspective, insider trading. They don’t have a fiduciary responsibility to their constituents
This comment is not really correct
1. The misappropriation theory of insider trading covers anyone who trades on material non public information sourced through a trusted relationship regardless of any fiduciary duty to the company. For example, if I tell my personal attorney a non public fact about the company I work at, and they trade on that information, they absolutely can be found guilty of insider trading despite having no relationship to the company at hand.
2. Congress is explicitly covered by insider trading law, which was affirmed in the STOCK Act of 2012. The fact that they’re rarely indicted has more to do with the legal and political challenges associated with doing so, not the legality of the act.
> The misappropriation theory of insider trading covers anyone who trades on material non public information sourced through a trusted relationship regardless of any fiduciary duty to the company. For example, if I tell my personal attorney a non public fact about the company I work at, and they trade on that information, they absolutely can be found guilty of insider trading despite having no relationship to the company at hand.
Huh. A lawyer (not my lawyer) gave me his off-the-cuff opinion on this scenario:
A clinical trial participant for a novel new drug believes he did not receive placebo, based on subjective effects matching the candidate drug and not the placebo. Assume the participant has a good understanding of the pharmacology and believes he can recognize the subjective effects of the placebo/comparator drug.
However, the drug was not therapeutic for him, the side effects were onerous, or perhaps he believes the trial will be terminated early. Whatever the reasoning behind his inference, no details of others’ experiences were leaked to him, he has not had abnormal contact with anyone involved; protocol was followed. He didn’t base this on lab results either.
Based on his understanding of published research on the candidate drug, and projecting from his own experience as lab rat, he believes this trial should disappoint shareholders. At the very least, shares may be priced too high.
Can the participant, based on his analysis of his inside access, invest $$$ shorting the pharma firm? This drug is considered the firm’s last best hope.
Their answer was yes, basically. He can trade on this non-public info.
"Insider trading is not about fairness, it is about theft" is a uniquely American approach that is not shared by other jurisdictions.
Where the hell did you read that
Presumably he means theft from shareholders. It's an accurate summary.
Probably Matt Levine.
Kalshi and Polymarket have a billion dollar of open interest between them (though velocity here matters too and volume is not very useful). The important thing is they are growing fast. Which means it might become big-potatoes very soon.
It appears you are missing any cursory philosophy, ethics, logic, etc. courses.
Me too, and I wish you would have answered the clear request for enlightenment instead of pointing out the obvious fact that we weren't in your class.
I thought the reason prediction markets were useful was not that people with inside information participate in them which can provide an indicator to the rest of us, but that by providing a sense of consensus at scale we can more accurately predict things.
e.g. two sports teams participating in a fair match tomorrow, someone runs a book and after 200,000 punters bet, the odds are 90/10 in favour of Team A indicates that 90% of the time Team A is going to win that game.
This assumes perfect and fully available information with punters availing themselves of this info (or at least an equal split of passionate/casual/informed/wreckless or even slightly "inside" punters on each side).
Then pay me and I'll enlighten you.
It appears you are missing any cursory ethics courses.
Ironically, I actually have a philosophy degree. If I'm still missing the point, I really don't think it's because I haven't learned how to think.
All I can really do in this case is ask for explanation. If you're enough higher and mightier than I am that you don't care to give me one, that's fine. You don't have to. It's just kind of...unnecessarily condescending to rub my face in it without even trying?
The interesting thing to me about this example is that it had to be someone lower level in or near the administration with less wealth, but who knew about a military operation. Hard to imagine any of the rich people around him risking a bet for such a small sum.
> I'm trying to understand what the criticism is here
> If I knew someone wanted me dead, of course I would want a prediction market on it, and if the odds suddenly shifted dramatically in favor of my death
No, you definitely would not want that. You don't want to live in the world like this. That's the point.
It's fucking horrible and dystopian, people betting on extra-legal invasions of countries, murders, things that could hurt or harm people where they have incentives to do something else that you've just distorted.
Gambling has been illegal, immoral, and proscribed by religions for literally thousands of years, in all sorts of different forms and iterations, for a reason. Because it's incredibly toxic to society.
You can make some arguments that pure games of chance, like casino games, and even maybe sports betting (since sports is a spectacle) aren't that bad. Based on what we've seen recently, I tend to disagree, but at least it's an argument.
But now we're talking about betting on all sorts of political issues, things that are illegal, things where people are acting in an official capacity and shouldn't be given incentives to subvert that. And all these other examples are just bad. There's not really any upside to this at all. It's just bad for society and it shouldn't happen. It's horrible.
If you feel like you're missing a big piece of the puzzle you should take a couple of steps back and think about the consequences of a world where this is common.
I think easy gambling over the internet is terrible, tons of young people are getting stuck in it. People get addicted to it throughout history and ruin their lives, vulnerable people get in trouble with huge losses.
But I don't think we should do anything because religion doesn't like it - that's a foolish thing to use to make your crucial choices or world view. A key reason is pretty much every terrible thing ever was excused as requirement of some religion or forever. Separate from the hurtful things in religious books at times, it's too easy for leaders or authorities to somehow justify actions.
Let's instead use a goal of treating each other respectfully, stop hating and killing each other. Yeah, that's all naive stuff, we aren't there, maybe we'll never be there. Still a good goal, treat each other with kindness. And yeah, I'm an optimistic sort.
You have cause and effect backwards. I'm saying that it's horrible and toxic for society which is why almost every major religion over every major period of history noticed and banned it.
It's not toxic because religion doesn't like it. Religion doesn't like it because it's toxic.
Religion has been the primary means throughout history by which humans have tried to figure out right and wrong. You can feel however you want about it, but that's just how it's worked. It's basically the ultimate example of Chesterton's fence.
To carry my analogy further, there are many, many, many times where the fence doesn't need to be there or where the fence has outlived its useful purpose. But it's still a good metaphor.
I think the problem is that I don't think it would end up primarily being about gambling.
I already live in a world where people make odds about whether I'm going to die. They're called "actuaries," and they work at life insurance companies. There are also oddsmakers of the same kind at car insurance companies, etc.
Right now, I hate that people who can actually analyze enough data to make odds about these things can only earn a living working for companies that are incentivized to find ways not to pay out when the odds do break against them. I'd much rather these people be able to make their livings just calculating odds, placing bets, and being right. I would like to have access to their calculations, and not be in a position of "just take it or leave it" when I'm evaluating a prospective plan from a life insurance company, for example.
Yes, by all means, there will be gamblers in these markets. There will always be some amount of noise, just like there is in the stock market. But why would that end up being the bulk of the industry? Just like with Wall Street, I would expect companies to grow up around these markets that specialize in getting the odds of things right, and making money off of their predictions. If the market ever became truly efficient, I think we would have a MUCH better idea than we do now about the likelihood of all kinds of things.
Heck, even if I think of something as apparently mundane as weather forecasting, if somebody came up with a breakout model that was right substantially more often, I would expect they would be able to raise all sorts of capital around it and start winning in all the weather forecasting markets, which would then make their predictions a reliable signal, and we'd finally have better information about what the weather is going to do.
I think one part I must be missing is why so many people are assuming that the primary user of prediction markets would be gamblers instead of specialists, especially once they operated at scale. I just don't see why that would happen. Anywhere there's an opportunity to make money reliably by coming up with better analysis or prediction tools, capital will flock there and incentivize coming up with better analysis or prediction tools.
I think I really would like to live in a world where that was highly incentivized, and I'm confused why people would not want that.
ETA: I don't think the gamblers would ruin this any more than they ruin Wall Street. I don't think they have enough capital to matter. (They are, after all, prone to losing money.)
> MoviePass announced that it will begin testing a betting platform.
Huh. That's interesting. Given futures markets on box office receipts are illegal.
I read the article but failed to grasp what exactly the disaster is that America would be walking into.
Is the reliability of Polymarket predictions overhyped? Sure. Is there manipulation of Polymarket odds by some people? Most likely there is. But to say that this is a disaster that America is walking into is nothing else but clickbait.
I think you are underappreciating how "manipulation of poly market odds" can be destructive when you are betting on geopolitics. Here this means that every decision is now a conflict of interest, and that doing the unpredictable (politically, economically etc) has a financial incentive for potential insiders. Sounds pretty dangerous to me.
On the other hand we have had stock markets forever. Sure you couldn't directly bet on e.g. if trump would invade iran, but you could indirectly bet on it by betting on things like the price of oil.
I dont think this is a new threat.
It's all fun and games until someone decides to bet $100K that someone they don't like won't die via assassination this year.
It was the crash of the stock markets that eventually created the social situation that pushed people into WW.
Comparing crusty old stock markets to the mass appeal of shiny, low-barrier-to-entry Polymarket is somewhat naive.
Polymarket is way higher barrier to entry than the stock market. For starters you need to sent ETH over the Polygon network. Stock market is in dollars.
How is that any different from existing financial markets?
The disaster is the consequences of people treating the data generated by these prediction markets as revealing some sort of insight into future events, rather than just a silly game played by silly people.
It's actually not a terrible idea to take some insights from prediction market data.
For example, you can expect the data to closely correlate to poll results for elections, because when it doesn't... people will notice and correct it.
I guess journalists don't like markets?
> s one viral post on X recently put it, “Got a buddy who is praying for world war 3 so he can win $390 on Polymarket.”
This is how most people are these days! Or probably thats how human nature is!
It’s “these days”, because we’ve exited the period where the last world war was in living memory. Nobody who lived through a world war would be so crass.
Unfortunately, that also means we’re likely due another one any time now.
Silver lining: We will answer Einstein's question about what weapons will fight WW3 in detail. /s
Every mushroom cloud has a silver lining?
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Its just gambling, for the stupid to loose there money, for the rich to have a little bit of fun, for the smart ones to take it from others while having some way of moral excuse to justify it.
The stock market at least gives you ownership/partial of a real thing.
The depressing thing is, when you see all these cliches in real: Go to some casino and you will see the guy having a coke nail talking gambling garbage like 'were is the bank teller? My luck is coming back' :(
This is a problem, a net negative and a sign of a weakening society.
But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
It seems hard to be a climate change denier when you're about to gamble on it.
Or maybe people will find a way to gamble while still living in completely different reality bubbles. Probably.
If you thought your neighbor was politically extreme last election, just wait until next election when he also has $100,000 on the line...
But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
Only in a truth-agnostic sense. Good gamblers in player-banked games (poker; rock, scissors, paper) vs house-banked games (slots) are good at figuring out what the other guy is representing. The actual truth is much less significant.
> But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
5 minutes browsing polymarket comments will dispel that notion really fast.
But at least you can make them poorer
Or just ignore all that garbage.
The comments are not the bets.
In fact, they are often opposite.
> But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
Long time ago I was working for a betting company and we had a product where virtual (horses, dogs, bikes, cars) were racing in a virtual environment. This was displayed on a TV in physical branches and on the website, along with completely transparent information that it is all random, source of randomness was even some government audited hardware. The customers could place bets on these virtual racers, identified by numbers. Essentially if there were 8 'dogs' in a race, there was a 1/8 chance your pick would win. And then a new set of random numbers would be generated and based on that a new 'race' video would play. The 'races' would go on every day, 4 in hour or something like that.
And the customers (in the live chat or sitting in the physical locations) were often debating the form of the individual 'dogs', how they would perform in the next race and so on. Yes, really.
Am I overlooking something, or would that mean it’s super
easy for a rational participant to make money?
Presumably it's a negative expected value game - the company running it has to make money after all... so likely not.
Prediction markets don’t need a bookie. Each bet has another real person taking the other side.
It’s more like the stock market brokerages. They just take a fee on each trade and don’t need to give you a spread over the stock price
This subthread is not about prediction markets
Not sure what you mean exactly. If you mean the virtual rates, a gambler has no way to make money by placing bets there (while the real probability is 1/8, the odds the betting company is selling are of course much worse). If you mean in a broader context that it is easy to take these people's money, yes and no - there is a long queue of people wanting to do the same and what they want to do is mostly either heavily regulated or illegal.
Sometimes. Often the sure fire bets have lower returns than the expected annual stock market returns.
You have to watch out for resolutions are don’t depend on the truth or could be abused.
Examples of markets to avoid are those that a single individual can manipulate. They could take the most profitable side and corrupt the result.
pigeon dancing (ala Skinner). Humans love to ascribe meaning to things, we have a real problem with randomness.
> If you thought your neighbor was politically extreme last election, just wait until next election when he also has $100,000 on the line...
I've seen the comment that prediction markets can be viewed as a tool for making conflicts more intractable.
I suspect that in practice, because a lot of online gamblers spend a lot of time specifically on X, they’re more susceptible than average to fake news.
Source for this stat?
Also hard to be a climate change doomer when you're gambling on it. Don't forget popular opinions can be extreme and wrong too. Prediction markets sound like a way to cut through the social media hysteria, although we already have insurance companies with money on the line about that and perhaps they're doing a good enough job of predicting the effects of climate change.
Good points. I also realized climate change is too slow for prediction markets. Nobody wants to bet on the average temperature in 2036.
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> gamblers are a little less likely to fall for fake news. Maybe?
Crypto bros. Remember when all of them were saying that NFTs were the future?
The gamblification of the country will go down as one of the darker chapters of USA.
The gamblification of everything is just another stepping stone on the path to the financialization of everything. Many of our best and brightest dedicate their lives to “financial innovation”. It’s sad.
Indeed. Imagine a future where all news have a permanent “place your bet on this event! No money? No problem! 36 month financing plan available” banner in the side. You’ll first just have to purchase some stable coin that the broker mints. Automatic wage garnishment if you default.
You won’t have to buy stable coins, you’ll just pay with your credit cards. This is basically sports gambling applied to the sport of news. I bet they’ll use the same kind of emotional manipulation too: “Real republicans (fans) bet here.” You’ll be watching a political debate and then you’ll have a “the DraftKings Minute” debate analysis segment which is like three guys that don’t know anything about politics screaming about odds.
This sounds exactly like the timeline we are in.
Gamblification is very, very different from financialization.
It’s the financialization of outcomes.
Who does it though? I feel that many people that gamble are the ones that feel "they know better" and they don't see any better way to use their money. Having a part of the population with those attributes seems the root cause of the issue, rather than the specific mechanism they use.
A financialization example: Somehow some company's stock became the go-to for investors that had continuous expectations just for the stock, and not about actual company health. And the company chose to prop up the stock quarter per quarter, instead of investing in long term development, until it crashed.
This is somewhat similar to dangers of gamblification I guess. Where the expectations of the investors (gamblers) start shaping the decisions of the professional management of the company.
Some of it is, but Polymarket is a horse of a different color.
The US will be the last casino he'll bankcrupt.
Gamblification is everywhere, not just in US. Eastern Europe is cooked in this regard. LATAM the same probably.
I hear bad things about the state of Australia’s gambling industry
Yep. Can't get a drink in NSW without seeing people wasting their pay check on the pokies.
Still a good chance that something will happen in these four years that makes the gambling crisis look completely trivial. I suppose I should bet on that, or would it be in poor taste?
Many, many years ago the libertarians had something they called "assassination politics", in which it was pointed out that the ability to bet on the death of famous figures also created an "untraceable" way to funnel money to someone who could make that event happen.
Isn't this just the result of unregulated capitalism?
Gambling isn't the problem (it can be regulated and safety measures can be put in place). It's the corruption that goes alongside betting on outcomes that can be easily manipulated with no common-sense oversight keeping the market fair.
The Nobel Peace Prize bet was a classic example. Any right-minded bookmaker would have voided that bet given that it was proven that the outcome had leaked ahead of time. Venezuela betting markets were equally corrupted.
The fish rots from the head what with Trump blatantly manipulating markets to enrich himself, his family and anyone who curries favour with him and says he's wonderful.
I personally will not set foot in the US, or buy services from any US company, until this administration is over.
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I'm kind of surprised the article doesn't spell out why these are "prediction markets". They're prediction markets because it used to be that what they were doing was illegal. It was illegal to just set up a gambling website in the US and so these "prediction markets" were the same thing as crypto, masking what was really happening behind some tech speak. In the same way that in the crypto market you regularly get behaviour that would get you locked up if it were to occur on the CME, what happens on these prediction markets would be illegal if you were just a betting company.
The reason they're getting big now though, is because we know none of those regulations are going to be enforced. So through regulartory arbitrage, these gambling sites are just going to eat the entire regulated industry until nothing is left.
It used to be Harry Enten's former boss would joke about Scottish teens, when talking about betting markets because frankly, the betting markets didn't seem predictive and were so niche, it seemed like the people on them were generally just betting with no idea what they were betting on.
But today, let's face it, soon we're going to see a contract on whether the S&P goes up or down tomorrow, and when you have that contract, gamblers are going to be betting on it instead of going to Robinhood and buying some Puts.
It's a real test to see if what all those people who talk about the halo effect of trusted well regulated markets are actually correct. The conventional wisdom is that most of the users of these sites are going to get their faces ripped off, and the companies will get very rich doing that.
Part of me wishes there were prediction markets for flight delays. The ETAs are wildly inaccurate, like last time the counter staff suggested I not reschedule cause our plane was arriving in 15min, when I could see on a slightly hard to find site that the plane was still grounded 500mi away.
Part of me is careful what I wish for, starting with passengers bothering staff even more.
Flightly or flightradar24 listens to air traffic control and updates the app before any announcements are made. Huge help for delays or gate changes.
I'll try that one. Last time was frantic and tried like 5 bad sites before finding at least where the plane was.
But maybe the passengers or crew on that plane had a better idea of why they were delayed, which I'm not sure any site would show. I've been on the other end too, knowing my plane isn't taking off due to a jammed door and texting updates to someone who was supposed to pick me up on the other end.
Isn't travel insurance one form of this?
Do you mean the kind that pays for cancellations? The scenario I'm sometimes in is the flight is delayed, I can switch for free anyway, but I don't want to have to wait a whole day or something. So it becomes a game of, stick with current flight or switch, and which one do I switch to.
I don’t really understand the argument for prediction markets if you don’t have inside information. The reason they beat other forms of news is because insiders are incentivised to bet, that makes some sense. But surely an investor without insider knowledge will always make less money on a market where they’re trading against insiders than one where they’re not.
You forget that people are not necessarily doing this for rational reasons.
Some people do it for for entertainment, some people are gambling addicts, some people think they have a strong grasp or inside knowledge when they don't.
It is, at root, a casino. Apply your lens to any casino game, and it shouldn't exist (some very narrow exceptions apply in the casino).
It is not a casino in the sense that in the casino you are better against the house. Polymarket is basically an arbiter with financial infrastructure.
I don’t know how this works but assuredly polymarket takes a cut, right? So if we were betting on a coin toss on polymarket, the payout would be less than 2 for both heads ands tail after accounting for polymarket’s fee. That’s not different from the rake for a poker game in a casino?
> I don’t really understand the argument for prediction markets if you don’t have inside information.
If you don't have inside information and you participate in prediction markets, you're there mostly to provide liquidity.
The argument is not that you should bet on prediction markets, the argument is that you should use the odds from the market to make decisions about the future.
But they don’t work without someone making the argument that some non-insiders should bet on them right? Because the insiders aren’t going to bother moving the market for us if there’s nobody to take money off.
The traditional way to square that circle is to say that someone who's interested in the answer should subsidize the market. Essentially they provide liquidity to the market which essentially pays people with accurate information to bet. Some work has been done to figure our effective ways of doing that. In practice, it seems like gamblers often provide enough liquidity that this is not needed
If you don't have insider info, they are betting houses. Prediction Markets is just a cynical euphemism.
What is the legality for US residents?
Right now Polymarket is subject to a federal agreement that they don't let US people participate. Apparently this is just a checkbox for the user to attest to. They don't even do IP geolocation, never mind payment checks.
So it's currently illegal for them to run this in the US. But is it illegal for users to participate?
It's okay, when the next administration enforces the laws we'll see all the VC ghouls attack and decry the government for having the audacity to protect citizens from abuse.
Polymarket has been around for a while. I thought the agreement happened under the Biden admin, but I could be wrong.
Prediction markets are highly regulated, it's just not being enforced... This is just a way to launder money to those with insider info to profit from. Also who the fuck cares if it happened under Biden? Is that some sort of gotcha you conjured up? Democratic members hate the democratic party more than Trump, no one cares about Biden or what he did but they sure do care what he failed to do.
Despite looking like a gambling website, the underlying system is a cryptocurrency exchange. With a separate cryptocurrency used as an oracle to decide (yes/no/later) if the yes or no side won. The site itself if pretty hands off with the actual financials. (though, they once did refund people when the oracle system resolved incorrectly)
I don't think this convoluted setup is enough to avoid US gambling laws, but it is important to keep in mind how it actually works.
> Right now Polymarket is subject to a federal agreement that they don't let US people participate.
This changed last month.
What changed?
They bought a CFTC regulated exchange
Yeah, but they're still enforcing the location stuff. I don't think they've fully switched over to regulated contracts.
I have the Polymarket app installed because it's a React Native app and I installed a bunch of the top apps using RN as research. About a week ago I got a notification that "Polymarket is now legal in the US!". I'm not from the US so not sure why I got the notification. Anyways, seems like something has changed.
They do check geolocation on order submit. You can read the site from anywhere, though.
Ah, I did not get that far in the enrollment process. Thanks!
Prediction markets are not considered gambling for the same reason that stock markets aren't. There's no fixed odds or random chance. A skilled analyst can make consistent returns.
Unlike stock markets, prediction markets also provide valuable data on important world events, such as elections. It's wisdom of the crowd with financial incentive.
Depends on the scope. If you take stock movement, and zoom in close enough, the fluctuations can be considered random. And suddenly you have people putting their money on things like binary options.
Surely, in the prediction market, it is possible to set up prediction bets which are practically impossible to predict. And with binary outcome, your odds will be 50/50.
> A skilled analyst can make consistent returns.
So can a skilled coach make consistent returns in his sport. But sportsbetting is considered gambling.
Equities markets allow society to collective allocate labor resources and they incentivize the public discovery of business intelligence. Prediction markets reward the public discovery of gossip. Any kind of trading can be gambling depending on how you do it. But with equities the odds are usually almost guaranteed to be in your favor if you long them and wait. I can't remember ever seeing a prediction market where I felt I could have a thesis on its outcome, unless I was spying on people. So I really don't see how they could be anything but gambling for most people.
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I've seen a lot of weird stuff out of this. People now get angry about things they didn't get angry about before, or get angry with people/players where that didn't exist before.
If you're just someone playing a game of Chess, and someone decides to bet on you via some platform, and then you lose, you now face the fury of random strangers where none existed before.
This applies to all sorts of things. I've seen live streamers get bad treatment because people bet on some outcome on their streams, like innocent Track of the Day races in Trackmania; not even a commercial event.
This sort of thing will suck the fun out of literally everything, and then replace that fun with stress/anxiety/anger/frustration when outcomes aren't met, and when they are met, dangerous monetary/emotional/brain-chemical feedback.
Even disregarding the dangers of gaming the system with insider trading or other fraud, the way that everything is increasingly having a monetary value attached to it is destroying that thing just being itself.
I really, really hate how money corrupts literally everything. In part I think the current financial fuck-ups causing living expenses to be unsustainable leads many to find other ways to make some money, but people have always done this even when times were better. So I guess it's somehow human nature combined with greed and opportunity.
Other things like Pokemon cards are also increasingly about money and not at all about Pokemon itself anymore. People buy packs of cards, look for the high-value ones, then throw the rest out. It's fucked.
I don't really know where this is going but the Cyberpunk 2077 feels like a good predictor. Literal corpo hellscape, and much of it is self-induced by grubbing for the next buck at every innocent opportunity.
Similar to the VC/investment landscape. Take a good product/company, add some VC/investment, and now the incentives are aimed at satisfying shareholders over providing value to customers.
In theory I like the idea of prediction markets but how they are done right now makes a bunch of markets too insecure to put much stock into or informationally unvaluable to inform other decisions
There is little incentive for someone with significant information, reason, or intuition to reveal it early leaving the market dumb for most of its existence or also open for someone influencing the outcome late.
They also aren't currently that reliable for gauging the wisdom of the crowds for situations where trust in the market effects its outcome. It's easy due to the scale of them for someone to just burn money to skew the perception of it for rhetorical and influential benefits.
I feel like there is no getting off this train though because news media companies are still desperate for revenue. Gambling around news will either increase advertising revenue for them, or if they do real information uncovering journalism, drive subscriptions because there's now incentive for getting news early on more than just financial news.
> There is little incentive for someone with significant information, reason, or intuition to reveal it early
Yes but only if they know no one else has the same information and enough money to move the market
Why is polymarket any more or less dangerous than NFTs or naked option trading?
Fool and his money are quickly separated…
Because it is gambling.
NFTs have zero value but people seem to derive non-monetary value from them. Naked option trading is a form of gambling (as well as risk management) and, as a result, it is regulated.
Polymarket is a "financial investment" for regulatory purposes but is gambling, there is no legitimate risk management reason. As a result, there is massive scope for harm because it is gambling without any of the gambling regulations that exist in the US.
People on this site appear to be unaware that gambling is regulated where legal. I will give you an example: Polymarket do not comply with state regulator's exclusion/no market lists. This is immoral. Gambling companies should not take bets from users who have gambling problems, they should not market to them.
Offshore unregulated books will often market themselves to addicts saying that they do not comply with regulator's exclusion lists...this is an onshore book operating in Lexington Avenue New York, not out of a shed with a pig sty in Curaco. It is unbelievable at many levels.
> state regulator's exclusion/no market lists
I'm not familiar, but this sounds like lists of people who are not allowed to gamble? Do stockbrokers abide by these?
The article’s point was not that Polymarket is the problem-the point is validating and advertising Polymarket on national news outlets will have ugly consequences.
Yeah, once it's on television, it is similar to polling, which can influence elections because people like to vote for the winner. However, in this case it's even worse, because someone with deep pockets can influence the predictions.
But polling is still scientific and harder to manipulate than the betting markets. All of this is covered in th article. You should read it-it is a good article.
harder to manipulate than the betting markets.
Sorry, that was what I meant to imply with the second half of my comment. Still, in my country there have been debates about whether publishing polls shouldn't be forbidden n weeks or days before the election (currently publishing polls and campaigning is only forbidden on election day).
The solution is baked into the problem. If prediction markets become generally embraced by the public (mentioning them on CNN is part of that evolution) then they will be much harder to manipulate. Size matters.
You are assuming everyone stay rational & this becomes a pre-election itself (like poll) but it can change and multiple reasons
You got to give even a 1000$ or something in this bet, you are gonna be so vocal about support, manipulation of data to convince unconvinced voters to join you or other details
The unconvinced voters are simply gonna bet on the voting side after sometime. For context, a third of the population in US iirc doesn't vote so what's gonna happen is that a difference of few %'s Lead could turn into something massive
And that few % can easily be rigged by an irrational actor. You are thinking 1 person = 1 vote (yes/no) but I may be wrong but how these work is in the aggregate and so a rich person can cause much more disruption within the voting system "legally" as well.
The point here is the legal part where what can end/what would end up happening is that elites around the world with irrational money can basically get political bases & favours established around the world for their purposes
Suppose an election is at 49 A / 51 B but now a rich guy contacted A and said to invest x$ to now make the odds 51 A / 49 B and then this news gets to twitter or any platform and now people get false news and some undecided voters might go bet on 51 itself too so now it might be 53/47 and in real voting election 51 A/49B
Some Elections are really close so I am pretty sure something like this is bound to happen sooner than later
> the point is validating and advertising Polymarket on national news outlets will have ugly consequences.
Coinbase
Robinhood
DraftKings
FanDuel
Yes, all of those are equally problematic.
Polymarket here is one example among the companies causing the problem. Legislation that addresses the problem should affect all the listed companies and more, not just Polymarket.
Giving credence and advertisement to all of those has caused huge societal problems. Sports Betting is a huge problem.
Marketed to a broader audience with more users, like sports betting?
And to be fair options trading used to be pretty limited in users too, until apps like robinhood tried to democratize it.
Replace the word "democratize" with "unleash" and that's a far more accurate descriptor.
It's not democratic if you can't destroy it, and believe me a majority of people want to destroy it.
Personally I find it sickening to see ads that say you can get rich betting on the weather. I haven't seen ads for polymarket but Kalshi's ads are absolutely predatory.
To be fair, when you place bets on Polymarket, your losses are limited to the money you put up.
But if you write uncovered options, your losses are theoretically unlimited.
Agreed, though. It's bizarre that this isn't regulated exactly like gambling. Because... that's what it is.
Naked option trading is certainly the worst of the three from a financial risk perspective for the beginner.
Although polymarket would do the best at "attraction" towards the average uninformed consumer because the bets and how to place them are far more understandable than the various option trading strategies.
It's a website where people can make bets on how certain geopolitical and public events shake out.
I used to think it's just yet another way to people with more money than sense to get their kicks.
But then I saw the true reason why the platform is terrifying - it gives people who have nontrivial amounts riding on the line a very powerful incentive to influence said events.
I have seen expertly crafted and highly convincing narratives - that I know to be false from firsthand experience - spring up inside (and presumably outside) the platform spring up on an issue. There was the thing where the ISW (a reputable military think tank) reported an Ukrainian city was captured (when in fact it wasn't) in order to win a bet.
Imagine if next time someone leaks some military intel in order to hedge a bet. Money, especially lots of it, is a very powerful motivator.
There's also no way to check and control who has insider info or has influence on the outcome (as betting against them is essentially suicide)
It bother lowers the threshold and increases the breadth of things that can be bet in. It's a gambling addiction nightmare.
Exactly! Friction matters a lot.
It gives people in power, wether it be the government or even an NBA ref, a vehicle to profit off of conflicts of interest / fixing games / etc...
Ive seen people point out White House press conferences do weird shit, like cut the conference 10 seconds before some polymarket prop bet of "how long will this press conference be".
Much more heinously, a few months ago right before one of Trumps asinine tariff announcements, someone took out a $300M BTC short position that was almost certainly from a WH insider.
I honestly don't care if someone loses all their money gambling, but the problem I have is how so many institutions are able to be undermined at a fundamental level do the existence of polymarket.
There's a "cloudflare outage" market. If I worked at CF I'd absolutely bet to win 5mn and then cause an outage and retire.
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>It gives people in power, wether it be the government or even an NBA ref, a vehicle to profit off of conflicts of interest / fixing games / etc...
there is the stock market for those things, where insider trading is nigh invisible to public.
I think you have completey missed my point. The stock market only allows you to trade securities, and (in theory) there is a lot of regulation and enforcement on who buys / sells stocks. Additionally, no one has the power to magically set a stock price to be a certain price on a certain date.
Polymarket all of a sudden makes it much easier to make money betting on an outcome people control. Looking at polymarket, I see bets paying 100-1 based on the number of tweets Elon makes on a given day. I see another at 100-1 on wether the US airstrikes Iran today with $66m riding on it. All of a sudden theres an incentive of a life changing amount of money for goons in the whitehouse to strike Iran for shits and giggles.
Did you know that in 2007 some NBA Refs were caught rigging games for just $2000 a game? Now Refs don't even need to be payed off when you can make a position anonymously with bitcoin.
>Additionally, no one has the power to magically set a stock price to be a certain price on a certain date.
but many have the knowledge of which company or industry is about to experience legislation, which they can pass to any of their associates worldwide, who can then buy or short the affected entities and share the profit with the insider. Polymarket is just the idiocracy version of that.
I completely agree insider trading is an issue, especially with the legality of sitting congressmen being able to day trade. But with the exception of elected officials voting for bad bills / policies, the "victim" is whomever loses money on those trade. Its reactive to world events, meaning the world events aren't being changed by the insider trader.
Polymarket is worse as it gives a mechanism for proactively changing the outcome of events to a much more extreme degree, simply because someone can make money on it.
A benign version of this would be NFL employees betting $1million on the color of gatorade in the Superbowl.
An insane version of this would be Trump issuing a single airstrike on Iran after having a friend or family member place a $10M bet on polymarket that pays out $1B. It completely erodes the obligation our government officials have to not act in their self interests.
> where insider trading is nigh invisible to public
...and is illegal.
It's not illegal to throw a basketball game.
Yes it is, this happened before almost 20 years ago and the NBA ref went to jail. Yet somehow the whitehouse insider trading is. Did you know someone took out a $300M BTC Short position right before a trump tarriff announcement in October?
Hmm yes. I certainly hope they would both be illegal.
because not everyone does naked option trading or nfts... while straight up gambling on 50/50 odds is WAY more enticing.
> Fool and his money are quickly separated…
Example: I had a flutter on the US Election. The odds were well in favour of Trump winning and I figured that was never going to happen, so I thought I was putting 'smart money' on Kamala.
I stand by it being 'smart' money ;)
I underestimated 'dumb' (which, I guess, isn't 'smart').
"Why prediction markets aren't popular" [0] gives some compelling arguments (to me) about why prediction markets haven't caught on and probably never will.
As I understand it, the main argument is that for prediction markets that aim to incentivize the thing they're predicting, better to invest in the thing directly. Otherwise, "prediction markets" are successful precisely when they can't influence the outcome, like sports betting.
I remember finding the election betting interesting last presidential election, but I also remember that it was spiked when Musk invested to change the odds.
Musk, being the world's richest person, is something of an outlier. He can afford to give free money to the market for longer than anyone else, and the size of the market might not be big enough to handle the imbalance.
There's a level of irrational spending which only institutional investors can counterbalance, and they might not have the risk appetite to get into a single market on a relatively less regulated platform that could rug pull them.
It's somewhat interesting how the wisdom of the crowd and economic theory for rational actors are usually combined as an argument for free markets.
While the reverse is not used as an argument against unchecked wealth.
My understanding is that unchecked wealth only remains that way until its owner acts irrationally on a stock exchange, at which point it is quite rapidly checked and becomes someone else's unchecked wealth.
Which is to say that Elon Musk can inflate any market he wants, but only by losing sums of money that will become increasingly significant as more and more people find out about the free cash giveaway.
I’ve used it.
There’s no functional difference in how markets work when 99% of wealth is owned by a handful of kings vs 99% of wealth being owned by a handful of oligarchs.
I don't really think so. You just swapped the term king to Oligarchs. In fact the Oligarchs are even worse because people think that they have freedom when they might not in fact have such freedom in the first place.
I swapped “kings” plural for “oligarchs” plural
I am laughing if its a joke lmaooo, just now realized it all of a sudden lol
pardon me I wrote king instead of kings and what you wrote in this comment felt like questionable to me first but now comical LMAO.
But my point still stands and aside from this mistake, I am curious in knowing the real answer to my question even now!
I don’t have an opinion on if it’s worse or not because some people mistakenly think they are free.
I meant that from the perspective of how market forces play out, hyper concentration of wealth into a few actors looks the same whether the title of the those actors is “king” or “oligarch”.
You start losing the wisdom of the crowds effect the market gives if you have a handful of people making the decisions for the entire market
Good example to show when people tout how great these are at predicting.
The Jesus market is really a bet on interest rates. You should bet that Jesus will return if interest rates are >3% because "No" holders will sell to put their money in the bank instead.
You are probably right, but I believe it's a failure of prediction whatever the reason is.
Having a "betting" market whereby someone is in complete control of the outcome is just asking for it to be gamed. Betting should be on unpredictable events.
Is insider betting illegal? I know it's illegal in the sports context, but not necessarily in other areas.
Even for insider trading, it's illegal not because it's unfair, but because the insider is considered to be stealing information from shareholders. For example, it's not illegal for a company to buy back stocks while holding insider information.
Not legal advice of course.
The only material objection mentioned in the article is that prediction markets are easy to manipulate.
Well, only if they are thinly traded. If they get mentioned a lot more on CNN and CNBC, that is likely to change.
There's two forms of manipulation mentioned. One is changing the market to influence public perception, that does become harder as the market grows in size.
The other is accepting the bribe, sorry, taking the other side of the bet, and making something happen. That only becomes worse with scale. When you're in the position to accept a million dollar payout to cause the press conference to only last 64 minutes, or to invade a foreign country, suddenly you have a million new reasons to do so.
On any prediction market where a reasonably small group of humans decide the outcome, and there's enough money to matter, "betting no" is better understood as offering a fee to make it happen, conditioned on damages should someone accept your offer and fail to do so. "Betting yes" is better understood as agreeing to facilitate the outcome - or assisting in the price discovery mechanism that says facilitators are over charging.
They really aren't. Every attempt at manipulation just turns into easy money for those who predict the right odds.
That only really holds if reporting on the manipulation bets is not turned into effective propaganda for skewing events towards the manipulation outcome.
So the main argument of the article holds IMO.
Edited to add: I'd like to rephrase that a bit actually. It doesn't even have to help bring about the particular outcome being bet on. It's enough that it can be used to shift public opinion in some way that's worth the cost to the manipulator.
Sure, but events where that kind of "skew" is effective are going to be quite rare. And even then, the incentive is just for everyone to try and "skew" the event as early as possible, where factors other than monetary cost or reward then become dominant. No different from what usually happens with no prediction market at all.
> It's enough that it can be used to shift public opinion in some way that's worth the cost to the manipulator.
This has been tried in the real world and is just not very effective. It's just too hard to move the price in ways that will shift public opinion when literally anyone else has a huge incentive to bet against you.
"Well, only if they are thinly traded."
Right now, they're all thin traded at their open. As soon as they are created is when you see the volatility that makes them enticing. Once you get volume, there doesn't seem to be as much value to be had.
No, completely wrong. Deep markets are not more accurate.
People who are unfamiliar with how regulated gamblings works assume that the "market" is just lots of informed people rationally trading with each other. This is not how it works. Bookmakers post lines to a small group of syndicates up to a limit, they will often do this non-publicly, and this is how prices are set. They are not set by the "wisdom of crowds", they are set by people who have invested hundreds of millions of dollars in predicting the outcome because bookmakers have an economic need for accurate lines.
When lines open to the public, there is often no significant movement after opening prices set by syndicates. That is because the public has no idea what the actual price should be, they are just uninformed noise traders clicking buttons randomly...that is the product too, the purpose of the product is entertainment not economic efficiency.
It is true that some lines are set incorrectly but the public is not able to benefit from this, because they do not have the information. I would guess that 95% of money made from gambling has been made by under 50 people. And, perhaps counter-intuitively, most of the time these people trading does not have an impact on price because they deliberately trade in a way that does not impact price. Again, the purpose is the same: they trade to make money, not produce economic efficiency.
The people who think prediction markets are useful in any way are people who never traded any markets and couldn't predict if the sun is going to come up tomorrow. If gamblers are noise traders, these people are noise speakers. These markets are completely pointless, gambling is economically pointless outside of the pleasure that people get from entertainment.
Noise traders ultimately create an even greater incentive for accurate prediction. The fact that the odds are set at the start and never change just proves that there's very little change in relevant information about upcoming sport games, races etc. where regulated bets happen. That's totally normal. Bets about real-world events are a rather different matter though.
No, they don't. If you have a line that is beatable, that line has been open for a long time, and you have informed people profiting from that line, it will usually not move. People who have information will disguise their flow, they won't bet with places that will move the line against them when they bet (if you bet this with Pinnacle, for example, they will work out you are beating their line immediately, they have quants who can work out how you are beating their line, and you have permanently destroyed your edge) so you put money down at soft book somehow and they will likely not move line against you...meaning the line doesn't move.
Again, it is fairly common assumption that people make that it must be noise traders who are incentivizing syndicates. This is the case at open but not after, and there is a significant distinction between noise traders and noise traders through retail books. Retail books do not set the lines, they do not post lines early to syndicates, their product is completely different. There is literally no incentive for accurate prediction because the economic gain from noise trading does not accrue to anyone who has information. 95% accrues to firms with the greatest marketing advantage, again...this is entertainment, it is not about accurate prediction, you are misunderstanding at a very fundamental level what is going on here. It is like going to see the Minecraft Movie and thinking this is artistic expression on the level of Tokyo Story.
This would all be different if there were real markets underpinned by economic demand for this risk but there isn't. This is why Betfair failed. This is why these "prices" you see aren't actually real prices.
Are you describing how sports gambling odds are set? Prediction markets Polymarket and Kalshi do not function the way you describe, at least, not yet.
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Some of the comments here read like fear of the “wisdom of crowds” itself .. i mean yes, prediction markets can be manipulated .. but every information system can ...
I wonder if you can bet on stock prices on prediction markets.
Yes, we just call it the "options market".
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I’m increasingly convinced that the single most important concept to understand in the 21st century is Chesterton’s Fence:
"Chesterton's fence" is the principle that reforms should not be made until the reasoning behind the existing state of affairs is understood.
Gambling isn’t a new problem, but apparently we thought it would turn out differently this time, for some vague unclear reason.
I think the simplified version of that reason is: no one really believes in anything anymore, except in the value that acquiring money by any means necessary is a good thing.
> Gambling isn’t a new problem, but apparently we thought it would turn out differently this time, for some vague unclear reason.
Moneyed interests saw a business opportunity, simple as that. Economic investment is becoming highly concentrated towards high-growth, high-risk opportunities and gambling has long thrived in the black market while staying current with technology.
> except in the value that acquiring money by any means necessary is a good thing.
And this will only become more true as the economy continues to worsen. Economic downturns and market collapses favor the elite.
The powers that be have always saught wealth. At some point they gained enough power to start usurping the law that was supposed to keep them in check.
We should have made it clearer that monied interests have a choice: be kept in check by the law, or by the guillotine.
The problem is, the guillotine solution to regulation only becomes feasible after the monied interest have thoroughly fucked society, to a level that would make living as blue-collar working in Detroit downtown today feel like being a banking executive living in Geneva.
Do you believe that the monied interests will stop on their own before we get there?
I'm too entralled by TikTok to build a guillotine.
Is that why the TikTok ban fell through?! …figures.
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> Gambling isn’t a new problem, but apparently we thought it would turn out differently this time, for some vague unclear reason.
The things I've seen have been either "it's not right to tell me not to" or "non-participants can get useful information by observing the odds". What I haven't seen is claims that it won't be net-harmful to participants.
This seems like the contrarian argument to libertarianism. A libertarian might claim it is orthogonal to it in theory, but in practice it is very much relevant to a “break all the walls down” ideology.
> I think the simplified version of that reason is: no one really believes in anything anymore, except in the value that acquiring money by any means necessary is a good thing.
Hit the nail on the head and these are my thoughts exactly. I don't really want to be the guy that thinks his time is extra-ordinary (cue fake quote of Socrates saying "kids these days have no manners"), but... maybe it is?
For me it's like people don't even feel the need to pretend anymore. Selfish geopolitical calculations and greed have dictated all actors' actions in the 20th, that isn't new, but at least then there was a need to appear to abide by laws or to uphold human rights, even to strive for the eradication of war (and often it wasn't a disguise; people actually cared about those things).
States used to care or at least appear to care about progress, betterment, social improvement, moral improvement. Today? All any government speaks of is raw GDP growth %. And so gambling is pushed on TVs, streets, subways, kids' entertainment... The idea that a government of a nation would strive for the moral well-being of its citizens (by heavily curtailing gambling for example) seems positively quaint in 2026.
Anyway I'm tired, excuse the incoherent ramble.
Maybe, like myself, you're just aging into being a bit of a conservative.
Let's not label ourselves. Once we do it, we have this tendency to think in black and white terms. Like, I wish people didn't divorce, so kids could have stable families, does this make me a conservative? Maybe yes, or maybe no, because I don't want to FORCE people to stay married.
But once I label myself a conservative, I am stuck, and now have a new set of friends with the same label, because I am labeled myself, and they have all those radical ideas, and then I have to pretend to believe and ending up believing them too.
Of course, the same applies when you label yourself a progressive.
Eh, I don’t think not wanting gambling and amoral behavior to consume society makes me a conservative in any real sense of the word. More just common sense pragmatism, is how I’d put it.
Maybe you mean in any modern sense of the word, but I'm pretty sure that is indeed a large part of what it used to mean.
The Chesterton’s Fence argument is an argument against progressive social changes, no?
No, it’s an argument against removing rules / making changes without deeply understanding why those rules exist in the first place, and what might happen when they are removed.
It’s perfectly fine to be for progressive social changes, as long as those criteria are met.
I’d call that a pragmatic approach, not a conservative one.
> I’d call that a pragmatic approach, not a conservative one.
The other meaning of "conservative", the one that's opposite "reckless".
It should in theory be possible to take a conservative approach to being progressive.
"It should in theory be possible to take a conservative approach to being progressive"
That's likely how most of the middle see themselves (if not in those words) - open to new changes but only if they're fully understood and not drastic.
No, sometimes social change is putting up a fence. And if social change is sometimes putting up fences, that would mean that not all fences are supposed to be torn down.
Chesterton’s fence has a specific definition. It’s not supposed to mean restrictions on social conduct or mores like you seem to be implying.
Social conduct is the context, not the definition. Chesterton's fence is just about not touching things you dont understand.
IMO, the world simply functions better when we strive for virtue.
Amoral by what standard? That’s where the conservatism comes in.
Amoral, not immoral.
Sure, but Chesterton's Fence is a pretty foundational argument among many conservatives.
Conservatives think societies are hard to understand, which makes them hard to engineer, and replacing institutions that work with new inventions needs to be done carefully and slowly.
Think of it as grift and not gambling.
I think most serious left-wing people also hold a strong aversion to gambling on the grounds that it's financially exploitative and can be viewed as a regressive tax on the poor/uneducated.
Conservatives don't have a monopoly on morality.
The whole nation is eaten up by gambling and other vices at this time. It's not the first time such a thing has happened in a nation's history. Generally it occurs just after widespread monetary debasement and just before major, world shaking disasters. (You Are Here.)
Reference: Andrew Dickson White (first president of Cornell) "Fiat Money Inflation In France", published 1896:
"The government now began, and continued by spasms to grind out still more paper; commerce was at first stimulated by the difference in exchange; but this cause soon ceased to operate, and commerce, having been stimulated unhealthfully, wasted away.
Manufactures at first received a great impulse; but, ere long, this overproduction and overstimulus proved as fatal to them as to commerce. From time to time there was a revival of hope caused by an apparent revival of business; but this revival of business was at last seen to be caused more and more by the desire of far-seeing and cunning men of affairs to exchange paper money for objects of permanent value. As to the people at large, the classes living on fixed incomes and small salaries felt the pressure first, as soon as the purchasing power of their fixed incomes was reduced. Soon the great class living on wages felt it even more sadly.
Prices of the necessities of life increased: merchants were obliged to increase them, not only to cover depreciation of their merchandise, but also to cover their risk of loss from fluctuation; and, while the prices of products thus rose, wages, which had at first gone up under the general stimulus, lagged behind. Under the universal doubt and discouragement, commerce and manufactures were checked or destroyed. As a consequence the demand for labor was diminished; laboring men were thrown out of employment, and, under the operation of the simplest law of supply and demand, the price of labor--the daily wages of the laboring class--went down until, at a time when prices of food, clothing and various articles of consumption were enormous, wages were nearly as low as at the time preceding the first issue of irredeemable currency."
He's writing about Revolutionary France's debasement, but Mackay's Extraordinary Delusions documents France's debasement under John Law about 70 years earlier, which shows how easily such mistakes are repeated.
"The mercantile classes at first thought themselves exempt from the general misfortune. They were delighted at the apparent advance in the value of the goods upon their shelves. But they soon found that, as they increased prices to cover the inflation of currency and the risk from fluctuation and uncertainty, purchases became less in amount and payments less sure; a feeling of insecurity spread throughout the country; enterprise was deadened and stagnation followed.
New issues of paper were then clamored for as more drams are demanded by a drunkard. New issues only increased the evil; capitalists were all the more reluctant to embark their money on such a sea of doubt. Workmen of all sorts were more and more thrown out of employment. Issue after issue of currency came; but no relief resulted save a momentary stimulus, which aggravated the disease. The most ingenious evasions of natural laws in finance which the most subtle theorists could contrive were tried--all in vain; the most brilliant substitutes for those laws were tried; "self-regulating" schemes, "interconverting" schemes--all equally vain. All thoughtful men had lost confidence. All men were waiting; stagnation became worse and worse. At last came the collapse and then a return, by a fearful shock, to a state of things which presented something like certainty of remuneration to capital and labor. Then, and not till then, came the beginning of a new era of prosperity.
Just as dependent on the law of cause and effect was the moral development. Out of the inflation of prices grew a speculating class; and, in the complete uncertainty as to the future, all business became a game of chance, and all business men, gamblers. In city centers came a quick growth of stock-jobbers and speculators; and these set a debasing fashion in business which spread to the remotest parts of the country. Instead of satisfaction with legitimate profits, came a passion for inordinate gains. Then, too, as values became more and more uncertain, there was no longer any motive for care or economy, but every motive for immediate expenditure and present enjoyment. So came upon the nation the obliteration of thrift."
Please don't make posts consisting of quotes and nothing else. HN is a supposed to be a site for curious conversation. It's not hard to see how posts like this interrupt that and bog it down - imagine someone at a dinner party* reading entire paragraphs like this out loud.
(* I don't know why I said "dinner party", since I don't go to those, the conversation usually isn't good, and they aren't my idea of fun, but oh well, it makes the point)
It definitely bogs things down. I would have preferred even an AI summary of the text, granted that it was accompanied by additional commentary to tie that to the subject at hand, rather than dumping in text with the assumption that the reader will understand the implicit connection.
Since you have now shadowbanned my comments from the site, I'm guessing you won't read this, so it's probably safe to point out that you are a useless, whiny fag who desperately needs to get out of his mom's basement and get a life.
I don't know if this will help or not, but I didn't shadowban you. (I wouldn't post a moderation reply and at the same time ban the account without saying so; that would be incongruent.)
What happened is that, independently of my reply, HN's software started killing your posts because your account had crossed some thresholds at which the software starts doing that.
Like I said, it may be a distinction without a difference to you, but that's what happened.
I don't really understand your point. We should reject ideas that make us feel like we have to sit through a monologue at a dinner party?
We should find more interesting ways to communicate ideas than lengthy recitation.
"In this mania for yielding to present enjoyment rather than providing for future comfort were the seeds of new growths of wretchedness: luxury, senseless and extravagant, set in: this, too, spread as a fashion. To feed it, there came cheatery in the nation at large and corruption among officials and persons holding trusts. While men set such fashions in private and official business, women set fashions of extravagance in dress and living that added to the incentives to corruption. Faith in moral considerations, or even in good impulses, yielded to general distrust. National honor was thought a fiction cherished only by hypocrites. Patriotism was eaten out by cynicism.
Thus was the history of France logically developed in obedience to natural laws; such has, to a greater or less degree, always been the result of irredeemable paper, created according to the whim or interest of legislative assemblies rather than based upon standards of value permanent in their nature and agreed upon throughout the entire world. Such, we may fairly expect, will always be the result of them until the ñat of the Almighty shall evolve laws in the universe radically different from those which at present obtain.
And, finally, as to the general development of the theory and practice which all this history records: my subject has been Fiat Money in France; How it came; What it brought; and How it ended.
It came by seeking a remedy for a comparatively small evil in an evil infinitely more dangerous. To cure a disease temporary in its character, a corrosive poison was administered, which ate out the vitals of French prosperity.
It progressed according to a law in social physics which we may call the "law of accelerating issue and depreciation." It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically impossible.
It brought, as we have seen, commerce and manufactures, the mercantile interest, the agricultural interest, to ruin. It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer. It ended in the complete financial, moral and political prostration of France--a prostration from which only a Napoleon could raise it."
What's the point of posting entire book fragments here?
So that lazy people who form their worldview via a Quick Google Search, Wikipedia articles, and/or "news media" can actually have a chance to learn something real about the time they are living in.
It's like a dozen paragraphs, forming one complete argument. Is this too much material to take in all at once, in this brave new TLDR tomorrow?
Neat in theory, but in practice ineffective. Those who might read multiple large exerpts from a book would actually seek out the source.
Do as you wish, however I doubt this will have the effect you want here.
> It's like a dozen paragraphs, forming one complete argument. Is this too much material to take in all at once, in this brave new TLDR tomorrow?
The issue is not that you cited a dozen-paragraph argument, it's that you inlined all the text directly into a series of comments instead of a link to the text on a separate page. It visually overwhelms the discussion thread and is disruptive to the broader discussion, which is not strictly against guidelines but generally seen as non-normative behavior.
i enjoyed reading it thank you
I don't come here to read lengthy quotes from random authors. I come here for discussion and interesting viewpoints from our community. Posting a lengthy quote is low-effort; more valuable would be to write up your take on it in your own words, and, if you want, link to the original source material that you would have otherwise quoted.
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I am broadly in favor of the existence of prediction markets. They are powerful tools for forecasting complex events that can help enrich and empower folks from across a range of backgrounds.
The article has two core points, but fails to go deep enough in addressing either. This leads to a _somewhat_ incorrect scapegoating of prediction markets rather than acknowledging head on some more core issues with the state of American journalism. Bullet (1) addresses this core issue while bullet (2) tries to suggest some ways in which these prediction markets can better harnessed to serve the interests of journalists and readers/viewers. IMO the first point is far more important than the second to understand the broader challenges.
1. The centralization and roll-up of American media has led to a dangerous monoculture where truth and accuracy risk being compromised by pressure from big business as well as politicians.
This is by design. It is important for folks to recognize that these are systematic efforts to denigrate and marginalize critical/skeptical voices by individuals with tremendous amounts of wealth and power. A prime non-journalism example of this is the persecution and harassment of short sellers (like Andrew Left) in public markets.
2. Prediction markets are not being described / addressed with sufficient uncertainty. The article touches on this, but fails to go so far as to suggest a fix. Prediction markets should, as the editors/implementers at orgs in the article suggest they do, serve as another data point rather than the whole story.
They should be addressed with the skepticism applied to any source (a lot of "journalists" don't even do this anymore though) with the source, values and market depth questioned.
Editorial standards need to be improved to accommodate this (don't report on very thin markets, acknowledge high amounts of uncertainty, signs of manipulation, and provide a bit of market structure analysis education to readers. All of this is more feasible than ever with good analysis tooling that can be re-appropriated from what professional market analysts (and gamblers) use to assess their odds.
If journalists want to add market information to their reporting then great, just do it responsibly instead of yeeting some number from strangers on the internet.
--
Fight back by voting with your dollars and speak up in favor of the truth. Boycott garbage sources and platforms that are trying to one-shot your friends/parents and support strong investigative and local journalism with your money. Talk to your friends and family and encourage them to do the same. Voting with your dollars and presence is one of the most powerful tools you have in our heavily market based society.
> They are powerful tools for forecasting complex events that can help enrich and empower folks from across a range of backgrounds.
gross. This sounds like a press release.
It's gambling dressed-up as forecasting.
Your response is very dismissive in that it doesn't engage with any of the other parts of my comment that provide a lot of nuance and analysis for the issues presented.
My description, and appreciation, for these types of tools and their trade-offs comes from reading about their early proposals. I don't trade or engage with any of them in their current form.
Recommend reading early work on them by Phillip Tetlock, as well as the many criticisms and responses that came about at the time and basically covered all of the ground we're retreading today in these discussions.
> A billionaire congressional candidate can’t just send a check to Quinnipiac University and suddenly find himself as the polling front-runner, but he can place enormous Polymarket bets on himself that move the odds in his favor.
Maybe not with a specific pollster depending on their scruples, but you can definitely pay to be part of the poll. And that’s the first step to getting any stats whatsoever.
It doesn't really work, up until a few weeks before the NYC mayoral election. Polymarket had Andrew Cuomo winning by double digits.
It's a trash platform.
There are much better ways to tell if a prediction market is well calibrated than a single anecdote.
And if it works so poorly, there's a lot of easy money to be made.
But this isn't a prediction market... those are highly regulated. This is just making money off of insider info. So yeah, not only does it work poorly it's entire reason for existing is to help people get richer while fucking over others.
"Accounts payable: 11111. In 1 hour. John Wick. Excommunicado."
The essence of prediction markets.
Stop calling them "prediction markets" and start calling them what they really are: corporatized bookies.
Bookies determine the odds and typically refuse to take bets from skilled bettors.
A market is open to all, with the odds influenced by all participants. In established betting markets such as for stocks, pros dedicate their careers and their organizations to improving the public estimates emerging from the market (though not for the sake of that improvement).
General prediction markets might turn out bad, but the above isn't an argument why, it's namecalling.
They're also heavily, heavily fixed of course. There's nothing stopping anonymous folks from betting on things they control/influence.
That's the point. To surface non-public information as a price signal.
Disagree here. That's the stated goal and the point for some folks, but the subset I explained above also exists and their point is to benefit from a false sense of security.
I just can't take anyone who uses that term seriously. Just because a billionaire CEO told you it's not gambling doesn't mean it's true.
At least in gambling they don't let the sports referees and players gamble.
This is just another racket for those in power to continue making the world worse for just a little bit more gain for themselves.
>>At least in gambling they don't let the sports referees and players gamble.
Oh c'mon now. This is completely impossible to police. Players and referees are not under constant supervision. They have families, friends, partners. Some of them got caught but you can be certain most weren't because it's just very difficult to catch.
There are always multiple people who know about key players' injuries, illness, other factors. The game is negative sum and additionally insiders take a a chunk for themselves. It's worse then roulette which at least doesn't pretend to be fair.
It isn't impossible to police. Players and referees are under supervision...I am not sure why you think this isn't the case. Regulated gambling companies i.e. not Polymarket, maintain lists of people who are connected to sports inc. through family. And they maintain systems that monitor unusual betting activity that is shared across the industry, it is quite easy to detect this activity because most of the flow that bookmakers see is uninformed. So if you see a customer that doesn't bet regularly put down $10k, line moves in their favour...that is obviously extremely suspicious because that won't happen with 95% of the volume you take.
As an example, there was a football player in England who had a friend that bet on a transfer market (a market that is extremely prone to inside information). It was detected immediately (despite being a relatively small bet of $10k, I have heard anecdotally that insiders have been detected in this market down to $500 bets), the player was banned, fined $500k, etc.
Btw, the reason these systems exist is because there are certain sports that are too lucrative not to make a market in but the economics/nature of the game mean that matches are easily fixed: 99.99% of this activity is low-ranked professional tennis, and surveillance has been very effective (all of this is funded, not by professional tennis, but by gambling companies). Generally, this isn't as prevalent with US sports because none of those preconditions exist for the major sports.
Doesn’t seem like slow-walking so much as a mad-rush. I saw a Kalshi ad on tv last night.
[deleted]
Prediction markets have an alluring quality that they become a pulse-check on what humanity believes is going to happen, putting your money where your mouth is, and when they work like this they work pretty well and are an interesting instrument. Brian Armstrong, the CEO of Coinbase, has even gone so far as to say that Insider Trading is a necessary source of data for prediction markets, if the goal of prediction markets is to be an accurate prediction of the future [1]. However, it seems increasingly clear that even this function of prediction markets doesn't behave how the silicon valley elite seem to think it does. In multiple markets throughout 2025, we saw insiders "snipe" correct predictions at the last minute, while odds were still against the correct outcome, moments before some finalizing event or news became public.
In theory, insiders give correct signal. But in practice, their volume is often too low to meaningfully move the market in the correct direction, and the timing of their order flow can be too late for that signal to actually be useful as a tool for predicting the future.
Its also critical to note that insider trading laws don't just exist to protect investors. They exist to protect the organizations the insiders belong to. The order flow on both prediction markets and the stock market is public information. Its one thing to short the company you work at because you know they're going to announce bad earnings. Its another thing entirely to take out a million-dollar position on "US Strikes Venezuela before Jan 3: Yes" on January 2nd. Sophisticated geopolitical opponents are monitoring these order flow feeds, and it begins to become a genuine matter of national security.
Overall, I am fine with prediction markets. I think they're an improvement over sports betting in the sense that they better-align incentives between the participants and the market-maker. In typical sports betting, the casinos running them set the odds, and participants take out positions against the casino; which means the casinos are incentivized against allowing anyone to actually make money on their platforms. This has surfaced many times in "professional sports betters" getting blacklisted. In comparison, PMs are a contract between participants, and the market-maker only takes a fee on each transaction (Robinhood's is 2.5%; quite high), which means the market-maker is only incentivized to increase PM order book volume and provide interesting markets. There's more opportunity for actual skill and dedication to shine through.
since financial speculation exists, the news has been about gambling.
Regular people just didn’t know it cause the ticket to entry was to expensive.
If insiders trade, the market becomes more accurate, which is good for society. Like WikiLeaks. Thus the MSN panic, the legacy establishment wants Polymarket to follow Assange's path.
That sounds a lot like "the magical hand of the markets" and "trickle down economics". A hope surrounded by a semblance of logic but not a lot thought put on the important details of how things actually work.
With this I mean: I can think of several ways in which this would go in the other direction (bad for society). And I am not an economics expert.
The problem discussed in the article was NOT insiders trading on secret information — it is the nearly opposite problem of manipulators trading and skewing the odds.
Insider trading seeks to trade with secret information and minimally obvious trades to avoid moving the markets until their position is locked in, in order to profit when the previously secret information becomes public and the market finally moves to a different price level.
Manipulators seek to move the market to create a false narrative that market-moving info exists when actual market-moving does NOT exist; the expectation is that people will see the price change and ASSUME there is information behind it, when there is actually just a manipulator willing to lose money to create that impression.
In a small market, such manipulation can be more cost-effective (make more of an impression for the same cost) vs buying advertisements.
I am guessing you must have made huge amounts of money from this irrational behaviour then. Congrats.
Yep, some WH member trading 400k$ an hour before an attack sure did wonders for "the good of society". So does media showing rates on gambling websites as if they were an oracle and not something that can be gamed for cheaper than a TV ad.
For fucks sake...
chaos-for-profit incentive is what terrifies me
Isn't Polymarket very low stakes?
For example "Will Trump acquire Greenland before 2027" market (the main one for this issue) has only 14m USD volume.
This is like 2 orders of magnitude less money than is bet on El Classico 2 times a year.
There are risks connected when prediction markets run wild but Polymarket ain't it.
There is also utility. It has high predictive value (it beats polls for elections from a little sample I've looked at) and allows you to make better decisions.
It beats polls for elections ONLY until someone notices it is being used as the basis of news stories and figures out it will be four orders of magnitude cheaper to manipulate that small market and make the news idiots broadcast that opinions have changed than to actually deploy all the adverts needed to change the opinions.
The very low stakes you point out make this even easier to put a thumb on the scales.
Goodhart's law: "When a measure becomes a target, it ceases to be a good measure"
The point of the article is that as soon as the "news" started reporting on prediction markets or corporatized gambling as if it was a measure of sentiment, it ceased to become a good measurement. That point has long passed.
News already broadcast tons of nonsense. Political commentary is just brain rot. Economic commentary might be just as well generated by one of those Markov chain string generators - it would make as much sense.
>>out it will be four orders of magnitude cheaper to manipulate that small market and make the news idiots broadcast that opinions have changed than to actually deploy all the adverts needed to change the opinions.
It will then become more expensive.
Out of all the manipulation news and journalists do every day I am not sure why "people bet money at 1 to 4 odds that Trump takes Greenland before 2027" is particularly problematic. It's true people bet money on it at those odds. How is that more problematic that news running pro or anti Trump segments or broadcasting some random crystal ball readings to justify stock price fluctuations of the day?
You can see how much money is bet on the market as well. It's not like you can spend 5 figures and suddenly shape the narrative.
Right, we agree on just about everything. Political and economic commentary is generally brain rot, and Polymarket, etc. is not an accurate predictive tool
And yes, if it starts to be seen as one of the levers to manipulate in manipulating public opinion, it will become more expensive. That does not improve it's predictive value, since we never really know how expensive it is on either side relative to the bankrolls and motivations of those who might want to manipulate it.
But for anyone who wants to use it as a crystal ball, go right on ahead — good luck with that!
There is a certain kind of person who thinks that all the news they disagree with is being faked by people who will spend multiple millions on Polymarket just to get a news story on CNN.
This person does not realise that most people do not pay attention to the news, that people in power are not glued to the news waiting for journalists to tell them what to say, or that the news is generally not very important...except to people like them who play out these fantasies about wealthy people mind-controlling them through CNN.
The internet is too connected and communication too instantaneous for Polymarket to be anything but a system to be gamed by those with money and influence.
Bet appears on Polymarket? You have the ability to direct people and resources to enact the under? Congrats you're rich!
Rich might be overstatement, but WNBA dildo stir show that people are ok with risking jail time over relatively low amounts of money.
>You have the ability to direct people and resources to enact the under? Congrats you're rich!
If you have the ability, you are already rich.
Rich people continually attempting to accrue even more money is not exactly an unheard-of phenomenon
What happens to rich people when they get more money, do you think they just stop further attempts at acquiring more?
Sometimes they go on a ketamine binge shrugs
Occasionally they make historically bad bets and blow up their fortunes, and it gets eaten up it all the smaller sharks circling behind them. It used to be most billionaires only lasted (as billionaires) for 3-7 years before collapsing.
The current stock market insane binge has changed that a bit.
Yeah, they historically don't like to keep increasing their wealth, Elon musk going from 350bn to nearly 800bn in like 2 years is definitely not an example of that.
Why is polymarket worse than cell phone games? At least polymarket essentially self identifies as gambling and isn't specifically marketed to children.
Cell phone games are knowingly losing money for fun. Polymarket is a sign of a failing, rapidly deregulatory economy.
And that's before we get into discussing the social damage to country that already sees more school shootings than weeks in a year (actually, 4x more), with rising political and civil tensions including assassinated politicians, adding potential "lose your house" to random events. As if it'll help calm things down and let us all keep a level head.
Or the implications of news companies reporting on these odds as if they reflect actual statistical likelihood, and how that gives the ultra wealthy yet another lever to control the view of reality the common people have.
The writer obviously hasn’t done any deep study of prediction markets and why they often provide greater insight than other polling techniques. Are they perfect? No. They predicted Hillary would win in 2016.
Had they existed then, prediction markets would have picked Hillary to win also
They did exist and they did predict Hilary.
You obviously missed the point of the article. The point is that validating and advertising Polymarket on national news outlets will have ugly consequences.
It's amazing how many people on HN didn't bother to actually read the article.
I did not miss the point of the article. You obviously missed my point, however.
https://archive.is/gFUry
Not just America, everything is. With stock market, at least we can somehow stop the bad actors, insider traders, corporate manipulation, pumps and dumps - with prediction markets, there is no way.
With prediction markets? Next to impossible. The markets being tied to crypto makes it even worse - things get harder to track, jurisdictions get blurry, proving becomes a ping pong between bureaucracy. And proving something becomes moreso a question of free will - if I decided to do X and then someone bets millon dollars on me doing X when odds are low, how do you prove I haven't decided to do X before? Will you prevent me from exercising my free will because of suspect insider trading? What if I am a president/senator?
Years ago, I was a kid who discovered online betting - often it was the only time I could place bets on MMA events, especially because it wasn't as popular as it is now. Even then, the gambling sites had "Other" options where you could bet on presidents, popes, landing on mars etc. The new markets aren't that much different, but are just using a nicer way to talk about it.
It isn't gambling, it's prediction.
You aren't a gambler, you're a "hyperinformed high iq individual predicting the geopolitical moves". Just like crypto gave people the identity crutch of a "tech investor", this gives them the identity crutch of a "geopolitical strategist".
But in the end, it is still just gambling - wrapped in a nice ego stroking suit, but gambling none the less.
As a matter of adopting sensible definitions, I think you need to draw the line somewhere between what is gambling and what is not.
If the risk taken can, in principle, be shifted in your favour (i.e. to produce positive expectation) through application of skill, then it isn't gambling. For example, in my mind, betting on whether you will win a game of chess is not gambling. On the other hand, if you cannot influence the outcome in your favour through skill, then it is gambling. Roulette is generally a good example of this (with the caveat that in some very specific circumstances it's possible to beat with skill).
If we're limiting the definition to merely risk-taking (you might win or you might lose) without factoring in skill, then virtually everything in life becomes gambling. For example, you gamble when you deposit money in the bank because it might go bust.
There's also the legal definition, in which case it's just a matter of checking whether the jurisdiction you are in considers the activity to be gambling or not.
I would say that gambling with skill component is still gambling. For example, in blackjack you can limit your losses by following a basic strategy, which is a 2x2 matrix with rows containing the value of your hand and columns containing the open dealer card.
If you can obtain an edge through a skill component (card counting in blackjack), some people wouldn't call this gambling anymore, but I would still call it gambling myself. Someone doing this for a living is a professional gambler.
What for me would be a sensible definition is that a bet/gamble has no other goals. Putting money in the bank/investing in a stock reallocates capital, which can be invested by someone. The fact that it is a risk-taking endeavor is merely a side effect. I would say the same goes for selling/buying insurance for your car.
So for me, the difference between betting and putting money in the bank/investing is that the primary goal is something different than the risk-taking activity.
Does this not boil down to the distinction being one's intent? I play poker occasionally, for example, and my primary goal is to win money not to take risk. Does that make it meet your definition of investing rather than gambling?
> “…betting on whether you will win a game of chess is not gambling.”
It’s the money aspect that makes it gambling. Just ask Pete Rose.
Stock market integrity is important because of their function in the economy. Scamming of gambling addicts is tragic but not detrimental to society.
That is one of the takes I've ever read. There is a reason gambling is so tightly regulated worldwide, and it's certainly not because governments hate easy vice tax revenue. Gambling debt destroys family units, increases poverty rates (most notably for the children of gambling addicts -- the consequences are not localised only to the person making the bad decisions), and increases violent crime rates. Gambling is massively detrimental to society. There can be arguments in allowing people to do things that are detrimental to society in the name of freedom, but it's not a great thing to pretend those detriments don't exist at all.
Do you know of any studies that can accurately show the correlation between gambling and societal costs? On the surface the link makes sense to me and seems like it should be right, though I'm not sure how we could have tested it in a controlled way to really know the link exists.
> Scamming of gambling addicts is tragic but not detrimental to society.
This isn't true.
https://www.connections.edu.au/news/strong-link-between-gamb...> Stock market integrity is important because of their function in the economy
Some might argue that people - including gambling addicts, and those impacted by their addiction - might possibly be more important than one of many possible financial mechanisms for free enterprise.
Is that NSW = New South Wales? I'm asking because Wikipedia lists New South Wales as a population of only 8.5 million, and those crime numbers are insanely huge relative to that.
You are ignoring the point of TFA. Kalshi & Polymarkets provide a marketplace to monetise political decision-making, a.k.a corruption. This is definitely detrimental to society.
>Scamming of gambling addicts is tragic but not detrimental to society.
It certainly is at scale.
Just so we're clear on the standards of solidarity here, someone murdering your entire family would be tragic but not detrimental to society. How much should society do to prevent that from happening?
Depends on how many of those gambling addicts there are.
If a huge enough portion of the population try to solve the statue quo of their economic problems by betting all on red, that's not gonna be great for society, including those who don't gamble.
The gambling industry itself is a net drain on society.
What is the societal benefit provided by it?
Until people are making money and affecting the world. Let's say that you're someone close to Trump and you have betted a very large sum that Trump should take a certain action. Are you going to try to make him take that action even if at that point it turns out to be the worst decision for the country and the world?
Except when "gambling adicts" end up as a cover for money laundering and funneling cash to people to buy influence.
> Scamming of gambling addicts is tragic but not detrimental to society.
I used to believe that. With the legalization of all the sports betting and how fast it can drain a gambler which can then affect the gambler's family, I'm now pretty much on the other side of the fence.
Just like we banned public smoking because of the effects of secondhand smoke, I'm pretty convinced that the secondary effects of gambling means it needs to go back to being banned. I don't see an obvious way to legislate gambling to prevent the auxiliary victims. It doesn't help that getting maximum profit as a bookie means being part of a group of the scummiest people on the planet who will stoop to anything to drain people of their money as fast as possible.
> These markets are also manipulable. In 2012, one bettor on the now-defunct prediction market Intrade placed a series of huge wagers on Mitt Romney in the two weeks preceding the election, generating a betting line indicative of a tight race. The bettor did not seem motivated by financial gain, according to two researchers who examined the trades. “More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout,” they wrote. The trader lost at least $4 million but might have shaped media attention of the race for less than the price of a prime-time ad, they concluded.
Reminiscent of PG's essay about the submarine[0]: it's another way of attaching credibility to a 'news' item you're pushing.
[0] https://paulgraham.com/submarine.html
This is just implausible. Nobody with a brain is going to throw away 4 million on the speculative hope that a prediction market price is going to magically manipulate media coverage on the election.
That's a lot of money for an individual, but if the (dark) money originates from a donor or PAC, it's just another campaign expense.
It's still a lot of money from a donor or PAC for this kind of change. I find it remarkably hard to believe that lines moving on Intrade would have a bigger impact than an equivalent amount of money spent on battleground state television ads.
>As this new kind of writing draws readers away from traditional media, we should be prepared for whatever PR mutates into to compensate. When I think how hard PR firms work to score press hits in the traditional media, I can't imagine they'll work any less hard to feed stories to bloggers, if they can figure out how.
I think it's safe to say they figured it out.
> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money.
I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on them in a way that makes them known.
If I knew someone wanted me dead, of course I would want a prediction market on it, and if the odds suddenly shifted dramatically in favor of my death, I would use that as a trigger for whatever defense strategies I had in place. Someone has really good reason to bet a lot of money on the prospect that I'm about to die. It's probably someone who knows of an active plot in motion to try to kill me! The sooner I can find out about that, the better. I would much rather give them an incentive to make that known somewhat earlier than wait.
I feel like there must be some big piece of this puzzle that I'm missing that makes it so these cannot operate the way I imagine them, but I haven't heard anyone explaining what it is. Someone fill me in on what I'm missing here?
If the prediction market is for a non-trivial amount, it's likely someone is going to kill you in exchange for the money the prediction market offered them. The prediction market isn't acting as a prophet here, it's acting as a plausibly deniable murder for hire service and you are its victim.
The people "betting against" you dying just paid to have you killed.
This was discussed on polymarket with the Galve Goat burning bet and assume it's why
Essentially it's a big straw goat in Sweden that vandals sometime set on fire.
Right towards the end as the probability approaches zero there's a huge profit incentive, "done deals" usually go under well under 1¢ meaning 100-200x returns.
A US man once traveled to Sweden to set the goat on fire, he was caught, fined $20k(?) and then fled the country before paying the fine.
Risk reward in a situation like this absolutely creates a situation for prediction markets similar to the observer effect in physics, it's no longer predicting the future and instead altering it.
Exactly, these markets exist in the real world, so as their size and use increases, the more likely the odds will influence real world events. Look at sports betting for a much smaller example. Match fixing is known. Electricity markets are gamed for individual profits at the detriment to everyone and the stability of the system, even with regulators trying to keep things stable. Enough "Market for all the things" already..
The type of people who have the power to change decide these type of events already are able to use that power to make money in a thousand different ways. These markets will change nothing.
> Enough "Market for all the things" already..
See, there are two major flavours of pro-market attitudes. The first one is "if we allow many independent individuals to try their own approaches to a problem and let the people with "better" approach to personally profit from it handsomely and make them compete against each other in an environment with objective-ish judgement of "what is better" instead of "impress the (inevitably corruptible) officials to be judged victorious and awarded the fortunes", and also manually guard and regulate against several universally known ways to sabotage such competition, then we'll be able to channel human ingenuity into solving difficult to solve technical problems while also rewarding those who are able to come up with (and implement) such solutions with low overseeing overhead". Of course, such an attitude isn't strictly speaking "pro-market", it's been around since ancient times; hell, the USSR of all places had this attitude in spades until about the 70s or so.
The second one is "Nah, we don't have to try and think about anything ourselves, just let people fend for themselves, they'll figure it out, and it won't have any unforeseen bad side effects, why would it; markets are magical like that!" Yeah, about that...
Right, a market is a small tool of larger systems. That’s fine, hard to get right but can make systems better. Type two just seems to be the cargo culted everywhere..
Yes, OOP might have chosen a suboptimal example here. But for general newsworthy events, people aren’t going to be in positions to manually make them happen. And no person in a position to start a war would do it to affect a Polymarket bet.
The prediction markets aren't yet at sufficient scale to purchase a war, you mean. People start wars for money all the time though. If they become of sufficient scale, people will purchase wars on them.
There's already lots of examples where they are of sufficient scale, like paying the press secretary to shut up after 64 minutes. Or paying someone to falsify ISWs map of the front line in Ukraine.
> But for general newsworthy events, people aren’t going to be in positions to manually make them happen.
Many newsworthy events (and even more events that actually reach prediction markets, many of which are at best marginally newsworthy) are actions ultimately pivot on a human decision, so the first part isn’t true.
> And no person in a position to start a war would do it to affect a Polymarket bet.
Are you saying “no one would start a war with personal financial gain being part of the motivation”, or “it is impossible for the payoff of a prediction market bet to be of sufficient magnitude to alter the calculus in even the tiniest iota in that case”?
Because the first seems extremely clearly false, and the second seems improbable in the case where the first is false.
> And no person in a position to start a war would do it to affect a Polymarket bet.
No person in position to start a war and to influence economic policies would become a crypto scammer... erm wait...
I can see someone in the Trump admin absolutely using a betting market when they can influence the outcome. At the least I'd also bet that someone in the T admin was the person who knew about Maduro being captured.
...but many people in positions where they can start a war or cause some other highly visible event of any sort probably will start turning to Polymarket to make money in the course of their work
Which makes the prediction market more accurate.
Until the tail starts wagging the dog.
"You provide the gambling, I'll provide the war"
Not really, for the same reason entrapment isn't usually seen as an accurate way to gather information for law enforcement. See also Goodhart's law and overfitting.
Eh… sort of? In a sense, they become less accurate, because the prediction market is the causative event, not an independent observer.
> And no person in a position to start a war would do it to affect a Polymarket bet.
Are you fucking kidding? Based just on current events, that is absolutely not a statement you can make without at least trying to prove it.
If you do try to prove that you will fail as the idea that people would start wars for profit is as old as wars.
Just evaluate the sentence you've just created. How many people exist who have the capability to start wars or influence the start of wars? It's a lot. What else do you know about these people and their motivations?
It isn’t just the people who can start a war. It’s also normal people who can.
Imagine if 10 million people bet on starting a war vs 5 million who say no war. Those net 5 million people are going on social media saying why the war is justified. They’ll vote in war mongers. They’ll support the military. The bet literally influences the result. It’s a self fulfilling prophecy.
It's not a bounty, though, right? It operates like other trading markets? So unless they have big money to wager, they don't have big money to gain. If it's hovering at, say, 10% odds, it's not like they can automatically 10x their money because other people have to take the opposite side. There would have to be a lot of liquidity in the market for their large bet not to move the odds, and as the odds move, they make less money.
> So unless they have big money to wager, they don't have big money to gain.
It requires that they put down collateral (the purchase of the the yes bets) that they lose if they don't meet the contract, so they do have to have starting capital.
> because other people have to take the opposite side.
That is to say that there must be people offering the bounty.
The size of the bounty isn't defined by the price of the contract, but the total upside available in the order book.
> and as the odds move, they make less money.
They have to put up more collateral for the remainder of the contract if they want that upside - but they make all the money that they already put up collateral for.
> The size of the bounty isn't defined by the price of the contract, but the total upside available in the order book.
But one person doesn't get the whole thing. ALL the people holding that side of the contract split the payout, in proportion to the size of their holdings in that side of the market.
I think if I use hypothetical numbers, it will help me explain how I think it works, and maybe this will help someone figure out where my error is.
Let's imagine the market is about whether I will die by the end of the day. So far, there are $500,000 in total bets in the market, and there are 5,000 shares in this market. Let's say it's currently sitting at only 10% odds that I'm going to die. I think that means 4,500 shares, or $450,000, is on the "No" side and 500 shares, or $50,000 is on the "Yes" side. Do I have that right so far?
If nothing changes about the market and I'm still alive at the end of the day, everyone who holds a "No" share splits the $500,000 pot, correct? There are 4,500 of them, so they each get $111.11 per share.
But suppose someone has a solid plan to kill me by the end of the day. They decide they want to dump $50,000 in on the "Yes" side. That's not going to buy them 500 shares, because they would need someone willing to sell 500 shares at the current price. They'll actually get well under 500 shares, and probably not even half that many, and they'll still be splitting the pot among the other people who already have the 500 shares on the "Yes" side. So they're still at not even half the "Yes" side of the market. They can probably double or triple their money, but we're talking about making another $50-100k on top of getting their own $50k back. It's not like they get the whole $500k.
That's what I mean when I say it's "not a bounty." A "bounty" makes it sound like, "If you're the one who kills smeej, you get $500k," but that's not what's happening here.
Lots of people might be willing to try to kill me for $500k. A heck of a lot fewer are going to be willing to try to kill me for 2-3x whatever capital they can come up with right before the hit.
Am I at least understanding this part of it correctly, how the payouts actually work? If I'm not, that would go a long way toward helping me figure out what I'm missing.
> I think that means 4,500 shares, or $450,000, is on the "No" side and 500 shares, or $50,000 is on the "Yes" side. Do I have that right so far?
No - there's always an equal number of contract outstanding on both sides of the bet. A contract is a promise from the person who sold "no" to pay the person who bought "yes" a dollar if the outcome happens. These contracts can trade from anywhere between 1 cent to 99 cents corresponding to a 1% chance to a 99% chance that you would die*. The odds the market reports is just whatever price the last contract traded at (or alternatively whatever price sits between the current open offers to buy/sell contracts. In liquid markets these tend to be the same).
> If nothing changes about the market and I'm still alive at the end of the day, everyone who holds a "No" share splits the $500,000 pot, correct? There are 4,500 of them, so they each get $111.11 per share.
They each get $1 per share. Their profit is $1 minus how much they paid for the share. It's not (meaningfully) a shared pot which is divided up, it's a fixed amount per share.
> They decide they want to dump $50,000 in on the "Yes" side. That's not going to buy them 500 shares, because they would need someone willing to sell 500 shares at the current price.
Ignoring the numbers at this point - you're generally right that they need to find someone willing to sell them the contracts. The existence of a large number of outstanding contracts doesn't guarantee this - they might be held by someone who is holding them to minimize the payout a hitman could get for killing you for instance.
The most direct guarantee is the order book The order book is the collection of open offers "I'm willing to sell X yes-contracts at Y price" that the market has for potential purchasers. The hitman can look at this and snatch up all of these simultaneously (up to some race conditions in the market - we can mostly pretend those don't exist but they do introduce some risk on the hitmans side). This can be thought of as the size of the currently available bounty.
There's a chance the market will continually over-price these yes contracts - and the hitman will never kill you as a result. That would be a huge mistake on all the financially motivated holders of yes contracts though - their positions go from worth something (if they sell to the aspiring hitman) to worth nothing if they don't price them low enough. In general you should expect the market to find the price at which a hitman will carry out the contract - so long as there's enough money in the market in the first place.
* Ignoring transaction fees and the time value of money, it's close enough for this discussion.
But the hitman still does not get the entire value of the contract. The hitman gets the value of the number of shares he can afford to buy, but that's not the whole contract by any means.
I think I understand what you're saying about the pricing. Am I correct in saying, then, that if the odds are 90% in favor of my living through the contract, the "No, smeej won't die today" price should be close to $0.10 (again, ignoring fees and the time value of money)?
If the hitman tries to buy in with 10% of the total funds already in the market, the odds/price are going to shift hard. It's going to devour a huge chunk of the order book. Any market that suddenly has someone come in at 10% of the whole market value is going to get a massive trading wick. So yeah, he'd get some shares at $0.10, but he's probably going to eat the open order book to a much higher cost. He can 10x some very small portion of his money (however many shares are on the book at $0.10), but he can only 5x his money at $0.20, or 3x at $0.33.
Even if we assume he does have $50k to dump into the market, I still don't see how he's going to more than triple his money, which is a heck of a lot less than taking the entire market's value as though it were a bounty.
A risky bet can give back much more than 3x the money. Take this absurd one for example, it seems like it's offering up to 9x on a yes bet right now: https://polymarket.com/event/us-civil-war-before-2027
(I don't know how much volume is available, nor do I endorse betting on either side of things like this)
Yes - we agree on how the pricing and odds work now :)
The hitman shouldn't expect to capture the value of the entire open interest. The market here is serving to negotiate the bounty with speculators betting that too much was offered taking the rest (a privilege they pay for by buying contracts that only pay out if they don't take too much). It's a curious form of negotiation since the people paying for the murder don't participate... but should (in a very theoretical efficient market) come to a "fair" (large enough to get the job done, and no larger) payment for the hitman.
2xing your money in a night is a huge payout, I think you're overestimating how high the multiplier on the capital requirement needs to be. That said, if you aren't, and you need a 5x payout to find a hitman then no rational speculator would purchase contracts for more then $0.20...
Why would the opposing side of that exact same bet allow themselves to be fleeced of all that money for free?
You're asking why someone hiring a hitman would be willing to part with their money?
Because that's what money is for, to purchase things, like hitmen (apparently).
OK so its much a shallower thought than I anticipated.
Why go through the "prediction market" at all then? The hitman still killed someone, payments are not anonymous in this market, and its certainly not clean. Further, you share the pot with however many are involved, proportional to the allotted bets on each side and presuming binary prediction. And if the winds change on the market for the bet proportional to the "hitman's" side, you lose out on dollars that would otherwise be paid to you (the hitman).
And it'd be so easy to stiff the hitman just by equalizing the positions by timing it.
All that risk for something that's far simpler to just pay directly?
> Why go through the "prediction market" at all then
It's there. It's not actually easy to find hitman for hire. This is a publicly advertised market for it.
Plausible deniability. We weren't paying for the witness to be murdered, we were expressing our confidence that no one would murder the witness.
Price discovery. The market tells you how much you need to pay a hitman (if you overpay hedge funds swoop in and take the difference, telling you for next time. If the hedge funds underestimate the cost they end up paying a significant penalty to the people who they prevented from hiring a hitman).
Crowd funding. The market means that every can chip in however much they want towards paying the hitman, and they only end up paying if its enough. In fact the middlemen who accepted the bets in the meantime may promise to pay some small amount of damages if enough isn't collected.
It is impossible to stiff the hitman, and there is no risk for the hitman that the "winds change". The hitman takes out the entire "yes" position before committing the murder. If it's not enough, they don't commit the murder.
The opposing side is getting paid, not getting fleeced.
Asymmetry of information. Fixed bets depend entirely on a small enough group with the ability to influence the outcome, keeping their mouths shut.
> I'm trying to understand what the criticism is here
You're correct in your understanding of prediction markets with respect to traders using insider information. There are a couple things going on here. One is the subtext from most news media now that Technology Bad. New technologies are treated as guilty until proven innocent, because that is a more engaging narrative for readers. So in this case, those covering this stuff immediately latch onto the rich get richer, insider trading viewpoint, and that gets reported without any analysis of why that might actually be desirable.
Second, prediction markets, in trying to become broadly accessible to "normal" people and desiring liquidity, need a marketing strategy that is understandable. They can't put out a Robin Hanson article as marketing material. So they market by appealing to something people do already understand, which is gambling. The public has this idea now of prediction markets as a way to make money, not as a tool for learning information. So the default perspective on insider trading is now one of unfairness: somebody used their privileged position to make money. The correct perspective is, in fact, that prediction markets are providing users with value by eliciting information from those insiders, information that the public would not otherwise have. The latter perspective is mostly foreign to degenerate gamblers, and the marketing campaigns of Kalshi and Polymarket aren't helping.
> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on them in a way that makes them known.
Except the paragraph you quoted nullify this benefit
> The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro
So we learnt nothing. For the entire duration the stock is online, its pretty much 50/50 then suddenly 1 day before, the ticker spikes to yes.
Yes, but it spikes BEFORE the attack begins, which means we learnt someone thought there was a string reason to believe things were about to change earlier than we otherwise would have.
That's the whole point, isn't it?
And if you're going to tell me the paragraph I quoted nullifies what I've said, would you please explain how? Obviously I don't currently understand it the same way you do, and I have asked for help understanding what I'm missing. Saying, "You're missing it," isn't helpful.
The missing piece is the distinction between a market that observes reality and a market that instigates it.
The criticism is about the systemic risk of converting prediction markets into "Assassination Markets"—mechanisms where the payout is not a reward for foresight, but a bounty for action.
In the case of Maduro, the operation cost around $300 million so a $400,000 payout isn’t providing a financial incentive.
But in the case of assassination, a $400,000 payout is sufficient motivation.
> In the case of Maduro, the operation cost around $300 million so a $400,000 payout isn’t providing a financial incentive.
It is if you are spending someone else’s $300 million, and getting the $400,000 yourself.
Or if you're the military commander with the option to disobey the illegal order (to go to war without congressional authorization) or take the bribe and execute the order. "Unmarked cash" (which this is) has pretty different purposes from official funds.
I think there's a pretty good chance the person who took that money was opportunistic, this time, but $400k isn't a trivial sum of money, it's not impossible it was the difference between this happening and not.
But it's not a bounty. It's a market, right? So the payout is split among everyone on your side? And the if you try to dump a ton (measured relative to the size of the market) into the market, the price tanks because there aren't enough people coming in on the other side. You get a big wick in the trading candle, so you scoop up the much less favorable terms of the bet at higher cost.
>If I knew someone wanted me dead, of course I would want a prediction market on it [...] Someone fill me in on what I'm missing here?
The assassin might place the bet at roughly the same time as they place the bullet in the chamber. Making the prediction into a bounty. Not giving you any meaningful time to ponder the new information. The notification from your phone would be the distraction they'd use when taking aim.
> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it.
Indeed. Insider trading is a feature of prediction markets, not a bug. There are two kinds of people who participate in prediction markets:
1. People who have insider information, or at least more sophisticated predictive capability than your average person.
2. Gamblers.
In effect, prediction markets are a way to move wealth from the second group to the first. If you understand that and still want to participate, cool. It's your money, and you're allowed to gamble it away if you find that entertaining.
At any rate, given the relatively small-potatoes level of bets going on at Polymarket and Kalshi, the article author's breathless anxiety about this is a bit overblown.
> 1. People who have insider information, or at least more sophisticated predictive capability than your average person.
This bucket as you've defined it is too broad.
There are a few different kinds of non-gambler participants in prediction markets:
1. People with "insider information" as we think of it - they "know" the answer to the market because they are "involved" somehow.
2. People who aim to do superior analysis of publicly available information to produce an edge. For example, an AI firm with better hurricane prediction modeling may try to monetize that by betting on whether or not a hurricane will impact an area.
2b. People who do the work to create new information. For example, the Trump 2024 election market on polymarket famously had better odds for Trump than polling. It turned out that a mega whale was bidding Trump up because he had paid for his own private polling in battleground states and that gave him confidence Trump was going to win.
In short, it's mostly incorrect to suggest that prediction market participants are either illegitimate insiders or gamblers; there is a third class of actors that are a very important cohort: those who do the work to create better predictions and monetize their work by betting in the markets. This third cohort of professional predictors is the most important in long-term prediction market growth.
>1. People who have insider information,
I mean, most stock trading prevents insider trading, unless of course you're a in congress.
Seemingly regulators consider this a bug in every other market type, but suddenly this gambling market allows it?
> breathless anxiety about this
All fun and games until people start dying from it.
Insider trading in stocks are prohibited but not for the reason most people think. It has nothing to do with someone having an unfair advantage in an informational sense, and everything to do with fiduciary responsibility.
The CEO and executive team has fiduciary responsibility to act in the financial best interest of the shareholders. Your broker too.
If you have insider info (Obtained legally) but no fiduciary responsibility you can act on it. That’s why congress members trading US equities based on decisions they’re privy to is not, from a legal perspective, insider trading. They don’t have a fiduciary responsibility to their constituents
This comment is not really correct
1. The misappropriation theory of insider trading covers anyone who trades on material non public information sourced through a trusted relationship regardless of any fiduciary duty to the company. For example, if I tell my personal attorney a non public fact about the company I work at, and they trade on that information, they absolutely can be found guilty of insider trading despite having no relationship to the company at hand.
2. Congress is explicitly covered by insider trading law, which was affirmed in the STOCK Act of 2012. The fact that they’re rarely indicted has more to do with the legal and political challenges associated with doing so, not the legality of the act.
> The misappropriation theory of insider trading covers anyone who trades on material non public information sourced through a trusted relationship regardless of any fiduciary duty to the company. For example, if I tell my personal attorney a non public fact about the company I work at, and they trade on that information, they absolutely can be found guilty of insider trading despite having no relationship to the company at hand.
Huh. A lawyer (not my lawyer) gave me his off-the-cuff opinion on this scenario:
A clinical trial participant for a novel new drug believes he did not receive placebo, based on subjective effects matching the candidate drug and not the placebo. Assume the participant has a good understanding of the pharmacology and believes he can recognize the subjective effects of the placebo/comparator drug.
However, the drug was not therapeutic for him, the side effects were onerous, or perhaps he believes the trial will be terminated early. Whatever the reasoning behind his inference, no details of others’ experiences were leaked to him, he has not had abnormal contact with anyone involved; protocol was followed. He didn’t base this on lab results either.
Based on his understanding of published research on the candidate drug, and projecting from his own experience as lab rat, he believes this trial should disappoint shareholders. At the very least, shares may be priced too high.
Can the participant, based on his analysis of his inside access, invest $$$ shorting the pharma firm? This drug is considered the firm’s last best hope.
Their answer was yes, basically. He can trade on this non-public info.
"Insider trading is not about fairness, it is about theft" is a uniquely American approach that is not shared by other jurisdictions.
Where the hell did you read that
Presumably he means theft from shareholders. It's an accurate summary.
Probably Matt Levine.
Kalshi and Polymarket have a billion dollar of open interest between them (though velocity here matters too and volume is not very useful). The important thing is they are growing fast. Which means it might become big-potatoes very soon.
It appears you are missing any cursory philosophy, ethics, logic, etc. courses.
Me too, and I wish you would have answered the clear request for enlightenment instead of pointing out the obvious fact that we weren't in your class.
I thought the reason prediction markets were useful was not that people with inside information participate in them which can provide an indicator to the rest of us, but that by providing a sense of consensus at scale we can more accurately predict things.
e.g. two sports teams participating in a fair match tomorrow, someone runs a book and after 200,000 punters bet, the odds are 90/10 in favour of Team A indicates that 90% of the time Team A is going to win that game.
This assumes perfect and fully available information with punters availing themselves of this info (or at least an equal split of passionate/casual/informed/wreckless or even slightly "inside" punters on each side).
Then pay me and I'll enlighten you.
It appears you are missing any cursory ethics courses.
Ironically, I actually have a philosophy degree. If I'm still missing the point, I really don't think it's because I haven't learned how to think.
All I can really do in this case is ask for explanation. If you're enough higher and mightier than I am that you don't care to give me one, that's fine. You don't have to. It's just kind of...unnecessarily condescending to rub my face in it without even trying?
The interesting thing to me about this example is that it had to be someone lower level in or near the administration with less wealth, but who knew about a military operation. Hard to imagine any of the rich people around him risking a bet for such a small sum.
> I'm trying to understand what the criticism is here
> If I knew someone wanted me dead, of course I would want a prediction market on it, and if the odds suddenly shifted dramatically in favor of my death
No, you definitely would not want that. You don't want to live in the world like this. That's the point.
It's fucking horrible and dystopian, people betting on extra-legal invasions of countries, murders, things that could hurt or harm people where they have incentives to do something else that you've just distorted.
Gambling has been illegal, immoral, and proscribed by religions for literally thousands of years, in all sorts of different forms and iterations, for a reason. Because it's incredibly toxic to society.
You can make some arguments that pure games of chance, like casino games, and even maybe sports betting (since sports is a spectacle) aren't that bad. Based on what we've seen recently, I tend to disagree, but at least it's an argument.
But now we're talking about betting on all sorts of political issues, things that are illegal, things where people are acting in an official capacity and shouldn't be given incentives to subvert that. And all these other examples are just bad. There's not really any upside to this at all. It's just bad for society and it shouldn't happen. It's horrible.
If you feel like you're missing a big piece of the puzzle you should take a couple of steps back and think about the consequences of a world where this is common.
I think easy gambling over the internet is terrible, tons of young people are getting stuck in it. People get addicted to it throughout history and ruin their lives, vulnerable people get in trouble with huge losses.
But I don't think we should do anything because religion doesn't like it - that's a foolish thing to use to make your crucial choices or world view. A key reason is pretty much every terrible thing ever was excused as requirement of some religion or forever. Separate from the hurtful things in religious books at times, it's too easy for leaders or authorities to somehow justify actions.
Let's instead use a goal of treating each other respectfully, stop hating and killing each other. Yeah, that's all naive stuff, we aren't there, maybe we'll never be there. Still a good goal, treat each other with kindness. And yeah, I'm an optimistic sort.
You have cause and effect backwards. I'm saying that it's horrible and toxic for society which is why almost every major religion over every major period of history noticed and banned it.
It's not toxic because religion doesn't like it. Religion doesn't like it because it's toxic.
Religion has been the primary means throughout history by which humans have tried to figure out right and wrong. You can feel however you want about it, but that's just how it's worked. It's basically the ultimate example of Chesterton's fence.
To carry my analogy further, there are many, many, many times where the fence doesn't need to be there or where the fence has outlived its useful purpose. But it's still a good metaphor.
I think the problem is that I don't think it would end up primarily being about gambling.
I already live in a world where people make odds about whether I'm going to die. They're called "actuaries," and they work at life insurance companies. There are also oddsmakers of the same kind at car insurance companies, etc.
Right now, I hate that people who can actually analyze enough data to make odds about these things can only earn a living working for companies that are incentivized to find ways not to pay out when the odds do break against them. I'd much rather these people be able to make their livings just calculating odds, placing bets, and being right. I would like to have access to their calculations, and not be in a position of "just take it or leave it" when I'm evaluating a prospective plan from a life insurance company, for example.
Yes, by all means, there will be gamblers in these markets. There will always be some amount of noise, just like there is in the stock market. But why would that end up being the bulk of the industry? Just like with Wall Street, I would expect companies to grow up around these markets that specialize in getting the odds of things right, and making money off of their predictions. If the market ever became truly efficient, I think we would have a MUCH better idea than we do now about the likelihood of all kinds of things.
Heck, even if I think of something as apparently mundane as weather forecasting, if somebody came up with a breakout model that was right substantially more often, I would expect they would be able to raise all sorts of capital around it and start winning in all the weather forecasting markets, which would then make their predictions a reliable signal, and we'd finally have better information about what the weather is going to do.
I think one part I must be missing is why so many people are assuming that the primary user of prediction markets would be gamblers instead of specialists, especially once they operated at scale. I just don't see why that would happen. Anywhere there's an opportunity to make money reliably by coming up with better analysis or prediction tools, capital will flock there and incentivize coming up with better analysis or prediction tools.
I think I really would like to live in a world where that was highly incentivized, and I'm confused why people would not want that.
ETA: I don't think the gamblers would ruin this any more than they ruin Wall Street. I don't think they have enough capital to matter. (They are, after all, prone to losing money.)
> MoviePass announced that it will begin testing a betting platform.
Huh. That's interesting. Given futures markets on box office receipts are illegal.
https://en.wikipedia.org/wiki/Onion_Futures_Act
I read the article but failed to grasp what exactly the disaster is that America would be walking into.
Is the reliability of Polymarket predictions overhyped? Sure. Is there manipulation of Polymarket odds by some people? Most likely there is. But to say that this is a disaster that America is walking into is nothing else but clickbait.
I think you are underappreciating how "manipulation of poly market odds" can be destructive when you are betting on geopolitics. Here this means that every decision is now a conflict of interest, and that doing the unpredictable (politically, economically etc) has a financial incentive for potential insiders. Sounds pretty dangerous to me.
On the other hand we have had stock markets forever. Sure you couldn't directly bet on e.g. if trump would invade iran, but you could indirectly bet on it by betting on things like the price of oil.
I dont think this is a new threat.
It's all fun and games until someone decides to bet $100K that someone they don't like won't die via assassination this year.
It was the crash of the stock markets that eventually created the social situation that pushed people into WW.
Comparing crusty old stock markets to the mass appeal of shiny, low-barrier-to-entry Polymarket is somewhat naive.
Polymarket is way higher barrier to entry than the stock market. For starters you need to sent ETH over the Polygon network. Stock market is in dollars.
How is that any different from existing financial markets?
The disaster is the consequences of people treating the data generated by these prediction markets as revealing some sort of insight into future events, rather than just a silly game played by silly people.
It's actually not a terrible idea to take some insights from prediction market data.
For example, you can expect the data to closely correlate to poll results for elections, because when it doesn't... people will notice and correct it.
I guess journalists don't like markets?
> s one viral post on X recently put it, “Got a buddy who is praying for world war 3 so he can win $390 on Polymarket.”
This is how most people are these days! Or probably thats how human nature is!
It’s “these days”, because we’ve exited the period where the last world war was in living memory. Nobody who lived through a world war would be so crass.
Unfortunately, that also means we’re likely due another one any time now.
Silver lining: We will answer Einstein's question about what weapons will fight WW3 in detail. /s
Every mushroom cloud has a silver lining?
[delayed]
Its just gambling, for the stupid to loose there money, for the rich to have a little bit of fun, for the smart ones to take it from others while having some way of moral excuse to justify it.
The stock market at least gives you ownership/partial of a real thing.
The depressing thing is, when you see all these cliches in real: Go to some casino and you will see the guy having a coke nail talking gambling garbage like 'were is the bank teller? My luck is coming back' :(
This is a problem, a net negative and a sign of a weakening society.
But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
It seems hard to be a climate change denier when you're about to gamble on it.
Or maybe people will find a way to gamble while still living in completely different reality bubbles. Probably.
If you thought your neighbor was politically extreme last election, just wait until next election when he also has $100,000 on the line...
But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
Only in a truth-agnostic sense. Good gamblers in player-banked games (poker; rock, scissors, paper) vs house-banked games (slots) are good at figuring out what the other guy is representing. The actual truth is much less significant.
> But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
5 minutes browsing polymarket comments will dispel that notion really fast.
But at least you can make them poorer
Or just ignore all that garbage.
The comments are not the bets.
In fact, they are often opposite.
> But, one silver lining, maybe, is gamblers are a little less likely to fall for fake news. Maybe?
Long time ago I was working for a betting company and we had a product where virtual (horses, dogs, bikes, cars) were racing in a virtual environment. This was displayed on a TV in physical branches and on the website, along with completely transparent information that it is all random, source of randomness was even some government audited hardware. The customers could place bets on these virtual racers, identified by numbers. Essentially if there were 8 'dogs' in a race, there was a 1/8 chance your pick would win. And then a new set of random numbers would be generated and based on that a new 'race' video would play. The 'races' would go on every day, 4 in hour or something like that.
And the customers (in the live chat or sitting in the physical locations) were often debating the form of the individual 'dogs', how they would perform in the next race and so on. Yes, really.
Am I overlooking something, or would that mean it’s super easy for a rational participant to make money?
Presumably it's a negative expected value game - the company running it has to make money after all... so likely not.
Prediction markets don’t need a bookie. Each bet has another real person taking the other side.
It’s more like the stock market brokerages. They just take a fee on each trade and don’t need to give you a spread over the stock price
This subthread is not about prediction markets
Not sure what you mean exactly. If you mean the virtual rates, a gambler has no way to make money by placing bets there (while the real probability is 1/8, the odds the betting company is selling are of course much worse). If you mean in a broader context that it is easy to take these people's money, yes and no - there is a long queue of people wanting to do the same and what they want to do is mostly either heavily regulated or illegal.
Sometimes. Often the sure fire bets have lower returns than the expected annual stock market returns.
You have to watch out for resolutions are don’t depend on the truth or could be abused.
Examples of markets to avoid are those that a single individual can manipulate. They could take the most profitable side and corrupt the result.
pigeon dancing (ala Skinner). Humans love to ascribe meaning to things, we have a real problem with randomness.
> If you thought your neighbor was politically extreme last election, just wait until next election when he also has $100,000 on the line...
I've seen the comment that prediction markets can be viewed as a tool for making conflicts more intractable.
I suspect that in practice, because a lot of online gamblers spend a lot of time specifically on X, they’re more susceptible than average to fake news.
Source for this stat?
Also hard to be a climate change doomer when you're gambling on it. Don't forget popular opinions can be extreme and wrong too. Prediction markets sound like a way to cut through the social media hysteria, although we already have insurance companies with money on the line about that and perhaps they're doing a good enough job of predicting the effects of climate change.
Good points. I also realized climate change is too slow for prediction markets. Nobody wants to bet on the average temperature in 2036.
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> gamblers are a little less likely to fall for fake news. Maybe?
Crypto bros. Remember when all of them were saying that NFTs were the future?
The gamblification of the country will go down as one of the darker chapters of USA.
The gamblification of everything is just another stepping stone on the path to the financialization of everything. Many of our best and brightest dedicate their lives to “financial innovation”. It’s sad.
Indeed. Imagine a future where all news have a permanent “place your bet on this event! No money? No problem! 36 month financing plan available” banner in the side. You’ll first just have to purchase some stable coin that the broker mints. Automatic wage garnishment if you default.
You won’t have to buy stable coins, you’ll just pay with your credit cards. This is basically sports gambling applied to the sport of news. I bet they’ll use the same kind of emotional manipulation too: “Real republicans (fans) bet here.” You’ll be watching a political debate and then you’ll have a “the DraftKings Minute” debate analysis segment which is like three guys that don’t know anything about politics screaming about odds.
This sounds exactly like the timeline we are in.
Gamblification is very, very different from financialization.
It’s the financialization of outcomes.
Who does it though? I feel that many people that gamble are the ones that feel "they know better" and they don't see any better way to use their money. Having a part of the population with those attributes seems the root cause of the issue, rather than the specific mechanism they use.
A financialization example: Somehow some company's stock became the go-to for investors that had continuous expectations just for the stock, and not about actual company health. And the company chose to prop up the stock quarter per quarter, instead of investing in long term development, until it crashed.
This is somewhat similar to dangers of gamblification I guess. Where the expectations of the investors (gamblers) start shaping the decisions of the professional management of the company.
Some of it is, but Polymarket is a horse of a different color.
The US will be the last casino he'll bankcrupt.
Gamblification is everywhere, not just in US. Eastern Europe is cooked in this regard. LATAM the same probably.
I hear bad things about the state of Australia’s gambling industry
Yep. Can't get a drink in NSW without seeing people wasting their pay check on the pokies.
Still a good chance that something will happen in these four years that makes the gambling crisis look completely trivial. I suppose I should bet on that, or would it be in poor taste?
Many, many years ago the libertarians had something they called "assassination politics", in which it was pointed out that the ability to bet on the death of famous figures also created an "untraceable" way to funnel money to someone who could make that event happen.
Isn't this just the result of unregulated capitalism?
Gambling isn't the problem (it can be regulated and safety measures can be put in place). It's the corruption that goes alongside betting on outcomes that can be easily manipulated with no common-sense oversight keeping the market fair.
The Nobel Peace Prize bet was a classic example. Any right-minded bookmaker would have voided that bet given that it was proven that the outcome had leaked ahead of time. Venezuela betting markets were equally corrupted.
The fish rots from the head what with Trump blatantly manipulating markets to enrich himself, his family and anyone who curries favour with him and says he's wonderful.
I personally will not set foot in the US, or buy services from any US company, until this administration is over.
[dead]
I'm kind of surprised the article doesn't spell out why these are "prediction markets". They're prediction markets because it used to be that what they were doing was illegal. It was illegal to just set up a gambling website in the US and so these "prediction markets" were the same thing as crypto, masking what was really happening behind some tech speak. In the same way that in the crypto market you regularly get behaviour that would get you locked up if it were to occur on the CME, what happens on these prediction markets would be illegal if you were just a betting company.
The reason they're getting big now though, is because we know none of those regulations are going to be enforced. So through regulartory arbitrage, these gambling sites are just going to eat the entire regulated industry until nothing is left.
It used to be Harry Enten's former boss would joke about Scottish teens, when talking about betting markets because frankly, the betting markets didn't seem predictive and were so niche, it seemed like the people on them were generally just betting with no idea what they were betting on.
But today, let's face it, soon we're going to see a contract on whether the S&P goes up or down tomorrow, and when you have that contract, gamblers are going to be betting on it instead of going to Robinhood and buying some Puts.
It's a real test to see if what all those people who talk about the halo effect of trusted well regulated markets are actually correct. The conventional wisdom is that most of the users of these sites are going to get their faces ripped off, and the companies will get very rich doing that.
Part of me wishes there were prediction markets for flight delays. The ETAs are wildly inaccurate, like last time the counter staff suggested I not reschedule cause our plane was arriving in 15min, when I could see on a slightly hard to find site that the plane was still grounded 500mi away.
Part of me is careful what I wish for, starting with passengers bothering staff even more.
Flightly or flightradar24 listens to air traffic control and updates the app before any announcements are made. Huge help for delays or gate changes.
I'll try that one. Last time was frantic and tried like 5 bad sites before finding at least where the plane was.
But maybe the passengers or crew on that plane had a better idea of why they were delayed, which I'm not sure any site would show. I've been on the other end too, knowing my plane isn't taking off due to a jammed door and texting updates to someone who was supposed to pick me up on the other end.
Isn't travel insurance one form of this?
Do you mean the kind that pays for cancellations? The scenario I'm sometimes in is the flight is delayed, I can switch for free anyway, but I don't want to have to wait a whole day or something. So it becomes a game of, stick with current flight or switch, and which one do I switch to.
I don’t really understand the argument for prediction markets if you don’t have inside information. The reason they beat other forms of news is because insiders are incentivised to bet, that makes some sense. But surely an investor without insider knowledge will always make less money on a market where they’re trading against insiders than one where they’re not.
You forget that people are not necessarily doing this for rational reasons.
Some people do it for for entertainment, some people are gambling addicts, some people think they have a strong grasp or inside knowledge when they don't.
It is, at root, a casino. Apply your lens to any casino game, and it shouldn't exist (some very narrow exceptions apply in the casino).
It is not a casino in the sense that in the casino you are better against the house. Polymarket is basically an arbiter with financial infrastructure.
I don’t know how this works but assuredly polymarket takes a cut, right? So if we were betting on a coin toss on polymarket, the payout would be less than 2 for both heads ands tail after accounting for polymarket’s fee. That’s not different from the rake for a poker game in a casino?
> I don’t really understand the argument for prediction markets if you don’t have inside information.
If you don't have inside information and you participate in prediction markets, you're there mostly to provide liquidity.
The argument is not that you should bet on prediction markets, the argument is that you should use the odds from the market to make decisions about the future.
But they don’t work without someone making the argument that some non-insiders should bet on them right? Because the insiders aren’t going to bother moving the market for us if there’s nobody to take money off.
The traditional way to square that circle is to say that someone who's interested in the answer should subsidize the market. Essentially they provide liquidity to the market which essentially pays people with accurate information to bet. Some work has been done to figure our effective ways of doing that. In practice, it seems like gamblers often provide enough liquidity that this is not needed
If you don't have insider info, they are betting houses. Prediction Markets is just a cynical euphemism.
What is the legality for US residents?
Right now Polymarket is subject to a federal agreement that they don't let US people participate. Apparently this is just a checkbox for the user to attest to. They don't even do IP geolocation, never mind payment checks.
So it's currently illegal for them to run this in the US. But is it illegal for users to participate?
It's okay, when the next administration enforces the laws we'll see all the VC ghouls attack and decry the government for having the audacity to protect citizens from abuse.
Polymarket has been around for a while. I thought the agreement happened under the Biden admin, but I could be wrong.
Prediction markets are highly regulated, it's just not being enforced... This is just a way to launder money to those with insider info to profit from. Also who the fuck cares if it happened under Biden? Is that some sort of gotcha you conjured up? Democratic members hate the democratic party more than Trump, no one cares about Biden or what he did but they sure do care what he failed to do.
Despite looking like a gambling website, the underlying system is a cryptocurrency exchange. With a separate cryptocurrency used as an oracle to decide (yes/no/later) if the yes or no side won. The site itself if pretty hands off with the actual financials. (though, they once did refund people when the oracle system resolved incorrectly)
I don't think this convoluted setup is enough to avoid US gambling laws, but it is important to keep in mind how it actually works.
> Right now Polymarket is subject to a federal agreement that they don't let US people participate.
This changed last month.
What changed?
They bought a CFTC regulated exchange
Yeah, but they're still enforcing the location stuff. I don't think they've fully switched over to regulated contracts.
I have the Polymarket app installed because it's a React Native app and I installed a bunch of the top apps using RN as research. About a week ago I got a notification that "Polymarket is now legal in the US!". I'm not from the US so not sure why I got the notification. Anyways, seems like something has changed.
They do check geolocation on order submit. You can read the site from anywhere, though.
Ah, I did not get that far in the enrollment process. Thanks!
Prediction markets are not considered gambling for the same reason that stock markets aren't. There's no fixed odds or random chance. A skilled analyst can make consistent returns.
Unlike stock markets, prediction markets also provide valuable data on important world events, such as elections. It's wisdom of the crowd with financial incentive.
Depends on the scope. If you take stock movement, and zoom in close enough, the fluctuations can be considered random. And suddenly you have people putting their money on things like binary options.
Surely, in the prediction market, it is possible to set up prediction bets which are practically impossible to predict. And with binary outcome, your odds will be 50/50.
> A skilled analyst can make consistent returns.
So can a skilled coach make consistent returns in his sport. But sportsbetting is considered gambling.
Equities markets allow society to collective allocate labor resources and they incentivize the public discovery of business intelligence. Prediction markets reward the public discovery of gossip. Any kind of trading can be gambling depending on how you do it. But with equities the odds are usually almost guaranteed to be in your favor if you long them and wait. I can't remember ever seeing a prediction market where I felt I could have a thesis on its outcome, unless I was spying on people. So I really don't see how they could be anything but gambling for most people.
I've seen a lot of weird stuff out of this. People now get angry about things they didn't get angry about before, or get angry with people/players where that didn't exist before.
If you're just someone playing a game of Chess, and someone decides to bet on you via some platform, and then you lose, you now face the fury of random strangers where none existed before.
This applies to all sorts of things. I've seen live streamers get bad treatment because people bet on some outcome on their streams, like innocent Track of the Day races in Trackmania; not even a commercial event.
This sort of thing will suck the fun out of literally everything, and then replace that fun with stress/anxiety/anger/frustration when outcomes aren't met, and when they are met, dangerous monetary/emotional/brain-chemical feedback.
Even disregarding the dangers of gaming the system with insider trading or other fraud, the way that everything is increasingly having a monetary value attached to it is destroying that thing just being itself.
I really, really hate how money corrupts literally everything. In part I think the current financial fuck-ups causing living expenses to be unsustainable leads many to find other ways to make some money, but people have always done this even when times were better. So I guess it's somehow human nature combined with greed and opportunity.
Other things like Pokemon cards are also increasingly about money and not at all about Pokemon itself anymore. People buy packs of cards, look for the high-value ones, then throw the rest out. It's fucked.
I don't really know where this is going but the Cyberpunk 2077 feels like a good predictor. Literal corpo hellscape, and much of it is self-induced by grubbing for the next buck at every innocent opportunity.
Similar to the VC/investment landscape. Take a good product/company, add some VC/investment, and now the incentives are aimed at satisfying shareholders over providing value to customers.
In theory I like the idea of prediction markets but how they are done right now makes a bunch of markets too insecure to put much stock into or informationally unvaluable to inform other decisions
There is little incentive for someone with significant information, reason, or intuition to reveal it early leaving the market dumb for most of its existence or also open for someone influencing the outcome late.
They also aren't currently that reliable for gauging the wisdom of the crowds for situations where trust in the market effects its outcome. It's easy due to the scale of them for someone to just burn money to skew the perception of it for rhetorical and influential benefits.
I feel like there is no getting off this train though because news media companies are still desperate for revenue. Gambling around news will either increase advertising revenue for them, or if they do real information uncovering journalism, drive subscriptions because there's now incentive for getting news early on more than just financial news.
> There is little incentive for someone with significant information, reason, or intuition to reveal it early
Yes but only if they know no one else has the same information and enough money to move the market
Why is polymarket any more or less dangerous than NFTs or naked option trading?
Fool and his money are quickly separated…
Because it is gambling.
NFTs have zero value but people seem to derive non-monetary value from them. Naked option trading is a form of gambling (as well as risk management) and, as a result, it is regulated.
Polymarket is a "financial investment" for regulatory purposes but is gambling, there is no legitimate risk management reason. As a result, there is massive scope for harm because it is gambling without any of the gambling regulations that exist in the US.
People on this site appear to be unaware that gambling is regulated where legal. I will give you an example: Polymarket do not comply with state regulator's exclusion/no market lists. This is immoral. Gambling companies should not take bets from users who have gambling problems, they should not market to them.
Offshore unregulated books will often market themselves to addicts saying that they do not comply with regulator's exclusion lists...this is an onshore book operating in Lexington Avenue New York, not out of a shed with a pig sty in Curaco. It is unbelievable at many levels.
> state regulator's exclusion/no market lists
I'm not familiar, but this sounds like lists of people who are not allowed to gamble? Do stockbrokers abide by these?
The article’s point was not that Polymarket is the problem-the point is validating and advertising Polymarket on national news outlets will have ugly consequences.
Yeah, once it's on television, it is similar to polling, which can influence elections because people like to vote for the winner. However, in this case it's even worse, because someone with deep pockets can influence the predictions.
But polling is still scientific and harder to manipulate than the betting markets. All of this is covered in th article. You should read it-it is a good article.
harder to manipulate than the betting markets.
Sorry, that was what I meant to imply with the second half of my comment. Still, in my country there have been debates about whether publishing polls shouldn't be forbidden n weeks or days before the election (currently publishing polls and campaigning is only forbidden on election day).
The solution is baked into the problem. If prediction markets become generally embraced by the public (mentioning them on CNN is part of that evolution) then they will be much harder to manipulate. Size matters.
You are assuming everyone stay rational & this becomes a pre-election itself (like poll) but it can change and multiple reasons
You got to give even a 1000$ or something in this bet, you are gonna be so vocal about support, manipulation of data to convince unconvinced voters to join you or other details
The unconvinced voters are simply gonna bet on the voting side after sometime. For context, a third of the population in US iirc doesn't vote so what's gonna happen is that a difference of few %'s Lead could turn into something massive
And that few % can easily be rigged by an irrational actor. You are thinking 1 person = 1 vote (yes/no) but I may be wrong but how these work is in the aggregate and so a rich person can cause much more disruption within the voting system "legally" as well.
The point here is the legal part where what can end/what would end up happening is that elites around the world with irrational money can basically get political bases & favours established around the world for their purposes
Suppose an election is at 49 A / 51 B but now a rich guy contacted A and said to invest x$ to now make the odds 51 A / 49 B and then this news gets to twitter or any platform and now people get false news and some undecided voters might go bet on 51 itself too so now it might be 53/47 and in real voting election 51 A/49B
Some Elections are really close so I am pretty sure something like this is bound to happen sooner than later
> the point is validating and advertising Polymarket on national news outlets will have ugly consequences.
Coinbase
Robinhood
DraftKings
FanDuel
Yes, all of those are equally problematic.
Polymarket here is one example among the companies causing the problem. Legislation that addresses the problem should affect all the listed companies and more, not just Polymarket.
Giving credence and advertisement to all of those has caused huge societal problems. Sports Betting is a huge problem.
Marketed to a broader audience with more users, like sports betting?
And to be fair options trading used to be pretty limited in users too, until apps like robinhood tried to democratize it.
Replace the word "democratize" with "unleash" and that's a far more accurate descriptor.
It's not democratic if you can't destroy it, and believe me a majority of people want to destroy it.
Zvi Mowshowitz has an excellent article on the devastating effects that legalizing sports betting has had: https://thezvi.substack.com/p/the-online-sports-gambling-exp...
Personally I find it sickening to see ads that say you can get rich betting on the weather. I haven't seen ads for polymarket but Kalshi's ads are absolutely predatory.
To be fair, when you place bets on Polymarket, your losses are limited to the money you put up.
But if you write uncovered options, your losses are theoretically unlimited.
Agreed, though. It's bizarre that this isn't regulated exactly like gambling. Because... that's what it is.
Naked option trading is certainly the worst of the three from a financial risk perspective for the beginner.
Although polymarket would do the best at "attraction" towards the average uninformed consumer because the bets and how to place them are far more understandable than the various option trading strategies.
It's a website where people can make bets on how certain geopolitical and public events shake out.
I used to think it's just yet another way to people with more money than sense to get their kicks.
But then I saw the true reason why the platform is terrifying - it gives people who have nontrivial amounts riding on the line a very powerful incentive to influence said events.
I have seen expertly crafted and highly convincing narratives - that I know to be false from firsthand experience - spring up inside (and presumably outside) the platform spring up on an issue. There was the thing where the ISW (a reputable military think tank) reported an Ukrainian city was captured (when in fact it wasn't) in order to win a bet.
Imagine if next time someone leaks some military intel in order to hedge a bet. Money, especially lots of it, is a very powerful motivator.
There's also no way to check and control who has insider info or has influence on the outcome (as betting against them is essentially suicide)
It bother lowers the threshold and increases the breadth of things that can be bet in. It's a gambling addiction nightmare.
Exactly! Friction matters a lot.
It gives people in power, wether it be the government or even an NBA ref, a vehicle to profit off of conflicts of interest / fixing games / etc...
Ive seen people point out White House press conferences do weird shit, like cut the conference 10 seconds before some polymarket prop bet of "how long will this press conference be".
Much more heinously, a few months ago right before one of Trumps asinine tariff announcements, someone took out a $300M BTC short position that was almost certainly from a WH insider.
I honestly don't care if someone loses all their money gambling, but the problem I have is how so many institutions are able to be undermined at a fundamental level do the existence of polymarket.
There's a "cloudflare outage" market. If I worked at CF I'd absolutely bet to win 5mn and then cause an outage and retire.
>It gives people in power, wether it be the government or even an NBA ref, a vehicle to profit off of conflicts of interest / fixing games / etc...
there is the stock market for those things, where insider trading is nigh invisible to public.
I think you have completey missed my point. The stock market only allows you to trade securities, and (in theory) there is a lot of regulation and enforcement on who buys / sells stocks. Additionally, no one has the power to magically set a stock price to be a certain price on a certain date.
Polymarket all of a sudden makes it much easier to make money betting on an outcome people control. Looking at polymarket, I see bets paying 100-1 based on the number of tweets Elon makes on a given day. I see another at 100-1 on wether the US airstrikes Iran today with $66m riding on it. All of a sudden theres an incentive of a life changing amount of money for goons in the whitehouse to strike Iran for shits and giggles.
Did you know that in 2007 some NBA Refs were caught rigging games for just $2000 a game? Now Refs don't even need to be payed off when you can make a position anonymously with bitcoin.
>Additionally, no one has the power to magically set a stock price to be a certain price on a certain date.
but many have the knowledge of which company or industry is about to experience legislation, which they can pass to any of their associates worldwide, who can then buy or short the affected entities and share the profit with the insider. Polymarket is just the idiocracy version of that.
I completely agree insider trading is an issue, especially with the legality of sitting congressmen being able to day trade. But with the exception of elected officials voting for bad bills / policies, the "victim" is whomever loses money on those trade. Its reactive to world events, meaning the world events aren't being changed by the insider trader.
Polymarket is worse as it gives a mechanism for proactively changing the outcome of events to a much more extreme degree, simply because someone can make money on it.
A benign version of this would be NFL employees betting $1million on the color of gatorade in the Superbowl.
An insane version of this would be Trump issuing a single airstrike on Iran after having a friend or family member place a $10M bet on polymarket that pays out $1B. It completely erodes the obligation our government officials have to not act in their self interests.
> where insider trading is nigh invisible to public
...and is illegal.
It's not illegal to throw a basketball game.
Yes it is, this happened before almost 20 years ago and the NBA ref went to jail. Yet somehow the whitehouse insider trading is. Did you know someone took out a $300M BTC Short position right before a trump tarriff announcement in October?
Hmm yes. I certainly hope they would both be illegal.
because not everyone does naked option trading or nfts... while straight up gambling on 50/50 odds is WAY more enticing.
> Fool and his money are quickly separated…
Example: I had a flutter on the US Election. The odds were well in favour of Trump winning and I figured that was never going to happen, so I thought I was putting 'smart money' on Kamala.
I stand by it being 'smart' money ;)
I underestimated 'dumb' (which, I guess, isn't 'smart').
"Why prediction markets aren't popular" [0] gives some compelling arguments (to me) about why prediction markets haven't caught on and probably never will.
As I understand it, the main argument is that for prediction markets that aim to incentivize the thing they're predicting, better to invest in the thing directly. Otherwise, "prediction markets" are successful precisely when they can't influence the outcome, like sports betting.
I remember finding the election betting interesting last presidential election, but I also remember that it was spiked when Musk invested to change the odds.
[0] https://worksinprogress.co/issue/why-prediction-markets-aren...
Musk, being the world's richest person, is something of an outlier. He can afford to give free money to the market for longer than anyone else, and the size of the market might not be big enough to handle the imbalance.
There's a level of irrational spending which only institutional investors can counterbalance, and they might not have the risk appetite to get into a single market on a relatively less regulated platform that could rug pull them.
It's somewhat interesting how the wisdom of the crowd and economic theory for rational actors are usually combined as an argument for free markets.
While the reverse is not used as an argument against unchecked wealth.
My understanding is that unchecked wealth only remains that way until its owner acts irrationally on a stock exchange, at which point it is quite rapidly checked and becomes someone else's unchecked wealth.
Which is to say that Elon Musk can inflate any market he wants, but only by losing sums of money that will become increasingly significant as more and more people find out about the free cash giveaway.
I’ve used it.
There’s no functional difference in how markets work when 99% of wealth is owned by a handful of kings vs 99% of wealth being owned by a handful of oligarchs.
I don't really think so. You just swapped the term king to Oligarchs. In fact the Oligarchs are even worse because people think that they have freedom when they might not in fact have such freedom in the first place.
I swapped “kings” plural for “oligarchs” plural
I am laughing if its a joke lmaooo, just now realized it all of a sudden lol
pardon me I wrote king instead of kings and what you wrote in this comment felt like questionable to me first but now comical LMAO.
But my point still stands and aside from this mistake, I am curious in knowing the real answer to my question even now!
I don’t have an opinion on if it’s worse or not because some people mistakenly think they are free.
I meant that from the perspective of how market forces play out, hyper concentration of wealth into a few actors looks the same whether the title of the those actors is “king” or “oligarch”.
You start losing the wisdom of the crowds effect the market gives if you have a handful of people making the decisions for the entire market
Polymarked has a 3% chance of Jesus returning _this year_ : https://polymarket.com/event/will-jesus-christ-return-before...
Good example to show when people tout how great these are at predicting.
The Jesus market is really a bet on interest rates. You should bet that Jesus will return if interest rates are >3% because "No" holders will sell to put their money in the bank instead.
You are probably right, but I believe it's a failure of prediction whatever the reason is.
Having a "betting" market whereby someone is in complete control of the outcome is just asking for it to be gamed. Betting should be on unpredictable events.
Is insider betting illegal? I know it's illegal in the sports context, but not necessarily in other areas.
Even for insider trading, it's illegal not because it's unfair, but because the insider is considered to be stealing information from shareholders. For example, it's not illegal for a company to buy back stocks while holding insider information.
Not legal advice of course.
The only material objection mentioned in the article is that prediction markets are easy to manipulate.
Well, only if they are thinly traded. If they get mentioned a lot more on CNN and CNBC, that is likely to change.
There's two forms of manipulation mentioned. One is changing the market to influence public perception, that does become harder as the market grows in size.
The other is accepting the bribe, sorry, taking the other side of the bet, and making something happen. That only becomes worse with scale. When you're in the position to accept a million dollar payout to cause the press conference to only last 64 minutes, or to invade a foreign country, suddenly you have a million new reasons to do so.
On any prediction market where a reasonably small group of humans decide the outcome, and there's enough money to matter, "betting no" is better understood as offering a fee to make it happen, conditioned on damages should someone accept your offer and fail to do so. "Betting yes" is better understood as agreeing to facilitate the outcome - or assisting in the price discovery mechanism that says facilitators are over charging.
They really aren't. Every attempt at manipulation just turns into easy money for those who predict the right odds.
That only really holds if reporting on the manipulation bets is not turned into effective propaganda for skewing events towards the manipulation outcome. So the main argument of the article holds IMO.
Edited to add: I'd like to rephrase that a bit actually. It doesn't even have to help bring about the particular outcome being bet on. It's enough that it can be used to shift public opinion in some way that's worth the cost to the manipulator.
Sure, but events where that kind of "skew" is effective are going to be quite rare. And even then, the incentive is just for everyone to try and "skew" the event as early as possible, where factors other than monetary cost or reward then become dominant. No different from what usually happens with no prediction market at all.
> It's enough that it can be used to shift public opinion in some way that's worth the cost to the manipulator.
This has been tried in the real world and is just not very effective. It's just too hard to move the price in ways that will shift public opinion when literally anyone else has a huge incentive to bet against you.
"Well, only if they are thinly traded."
Right now, they're all thin traded at their open. As soon as they are created is when you see the volatility that makes them enticing. Once you get volume, there doesn't seem to be as much value to be had.
No, completely wrong. Deep markets are not more accurate.
People who are unfamiliar with how regulated gamblings works assume that the "market" is just lots of informed people rationally trading with each other. This is not how it works. Bookmakers post lines to a small group of syndicates up to a limit, they will often do this non-publicly, and this is how prices are set. They are not set by the "wisdom of crowds", they are set by people who have invested hundreds of millions of dollars in predicting the outcome because bookmakers have an economic need for accurate lines.
When lines open to the public, there is often no significant movement after opening prices set by syndicates. That is because the public has no idea what the actual price should be, they are just uninformed noise traders clicking buttons randomly...that is the product too, the purpose of the product is entertainment not economic efficiency.
It is true that some lines are set incorrectly but the public is not able to benefit from this, because they do not have the information. I would guess that 95% of money made from gambling has been made by under 50 people. And, perhaps counter-intuitively, most of the time these people trading does not have an impact on price because they deliberately trade in a way that does not impact price. Again, the purpose is the same: they trade to make money, not produce economic efficiency.
The people who think prediction markets are useful in any way are people who never traded any markets and couldn't predict if the sun is going to come up tomorrow. If gamblers are noise traders, these people are noise speakers. These markets are completely pointless, gambling is economically pointless outside of the pleasure that people get from entertainment.
Noise traders ultimately create an even greater incentive for accurate prediction. The fact that the odds are set at the start and never change just proves that there's very little change in relevant information about upcoming sport games, races etc. where regulated bets happen. That's totally normal. Bets about real-world events are a rather different matter though.
No, they don't. If you have a line that is beatable, that line has been open for a long time, and you have informed people profiting from that line, it will usually not move. People who have information will disguise their flow, they won't bet with places that will move the line against them when they bet (if you bet this with Pinnacle, for example, they will work out you are beating their line immediately, they have quants who can work out how you are beating their line, and you have permanently destroyed your edge) so you put money down at soft book somehow and they will likely not move line against you...meaning the line doesn't move.
Again, it is fairly common assumption that people make that it must be noise traders who are incentivizing syndicates. This is the case at open but not after, and there is a significant distinction between noise traders and noise traders through retail books. Retail books do not set the lines, they do not post lines early to syndicates, their product is completely different. There is literally no incentive for accurate prediction because the economic gain from noise trading does not accrue to anyone who has information. 95% accrues to firms with the greatest marketing advantage, again...this is entertainment, it is not about accurate prediction, you are misunderstanding at a very fundamental level what is going on here. It is like going to see the Minecraft Movie and thinking this is artistic expression on the level of Tokyo Story.
This would all be different if there were real markets underpinned by economic demand for this risk but there isn't. This is why Betfair failed. This is why these "prices" you see aren't actually real prices.
Are you describing how sports gambling odds are set? Prediction markets Polymarket and Kalshi do not function the way you describe, at least, not yet.
Some of the comments here read like fear of the “wisdom of crowds” itself .. i mean yes, prediction markets can be manipulated .. but every information system can ...
I wonder if you can bet on stock prices on prediction markets.
Yes, we just call it the "options market".
I’m increasingly convinced that the single most important concept to understand in the 21st century is Chesterton’s Fence:
"Chesterton's fence" is the principle that reforms should not be made until the reasoning behind the existing state of affairs is understood.
https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...
Gambling isn’t a new problem, but apparently we thought it would turn out differently this time, for some vague unclear reason.
I think the simplified version of that reason is: no one really believes in anything anymore, except in the value that acquiring money by any means necessary is a good thing.
> Gambling isn’t a new problem, but apparently we thought it would turn out differently this time, for some vague unclear reason.
Moneyed interests saw a business opportunity, simple as that. Economic investment is becoming highly concentrated towards high-growth, high-risk opportunities and gambling has long thrived in the black market while staying current with technology.
> except in the value that acquiring money by any means necessary is a good thing.
And this will only become more true as the economy continues to worsen. Economic downturns and market collapses favor the elite.
The powers that be have always saught wealth. At some point they gained enough power to start usurping the law that was supposed to keep them in check.
We should have made it clearer that monied interests have a choice: be kept in check by the law, or by the guillotine.
The problem is, the guillotine solution to regulation only becomes feasible after the monied interest have thoroughly fucked society, to a level that would make living as blue-collar working in Detroit downtown today feel like being a banking executive living in Geneva.
Do you believe that the monied interests will stop on their own before we get there?
I'm too entralled by TikTok to build a guillotine.
Is that why the TikTok ban fell through?! …figures.
> Gambling isn’t a new problem, but apparently we thought it would turn out differently this time, for some vague unclear reason.
The things I've seen have been either "it's not right to tell me not to" or "non-participants can get useful information by observing the odds". What I haven't seen is claims that it won't be net-harmful to participants.
This seems like the contrarian argument to libertarianism. A libertarian might claim it is orthogonal to it in theory, but in practice it is very much relevant to a “break all the walls down” ideology.
> I think the simplified version of that reason is: no one really believes in anything anymore, except in the value that acquiring money by any means necessary is a good thing.
Hit the nail on the head and these are my thoughts exactly. I don't really want to be the guy that thinks his time is extra-ordinary (cue fake quote of Socrates saying "kids these days have no manners"), but... maybe it is?
For me it's like people don't even feel the need to pretend anymore. Selfish geopolitical calculations and greed have dictated all actors' actions in the 20th, that isn't new, but at least then there was a need to appear to abide by laws or to uphold human rights, even to strive for the eradication of war (and often it wasn't a disguise; people actually cared about those things).
States used to care or at least appear to care about progress, betterment, social improvement, moral improvement. Today? All any government speaks of is raw GDP growth %. And so gambling is pushed on TVs, streets, subways, kids' entertainment... The idea that a government of a nation would strive for the moral well-being of its citizens (by heavily curtailing gambling for example) seems positively quaint in 2026.
Anyway I'm tired, excuse the incoherent ramble.
Maybe, like myself, you're just aging into being a bit of a conservative.
Let's not label ourselves. Once we do it, we have this tendency to think in black and white terms. Like, I wish people didn't divorce, so kids could have stable families, does this make me a conservative? Maybe yes, or maybe no, because I don't want to FORCE people to stay married.
But once I label myself a conservative, I am stuck, and now have a new set of friends with the same label, because I am labeled myself, and they have all those radical ideas, and then I have to pretend to believe and ending up believing them too.
Of course, the same applies when you label yourself a progressive.
Eh, I don’t think not wanting gambling and amoral behavior to consume society makes me a conservative in any real sense of the word. More just common sense pragmatism, is how I’d put it.
Maybe you mean in any modern sense of the word, but I'm pretty sure that is indeed a large part of what it used to mean.
The Chesterton’s Fence argument is an argument against progressive social changes, no?
No, it’s an argument against removing rules / making changes without deeply understanding why those rules exist in the first place, and what might happen when they are removed.
It’s perfectly fine to be for progressive social changes, as long as those criteria are met.
I’d call that a pragmatic approach, not a conservative one.
> I’d call that a pragmatic approach, not a conservative one.
The other meaning of "conservative", the one that's opposite "reckless".
It should in theory be possible to take a conservative approach to being progressive.
"It should in theory be possible to take a conservative approach to being progressive"
That's likely how most of the middle see themselves (if not in those words) - open to new changes but only if they're fully understood and not drastic.
No, sometimes social change is putting up a fence. And if social change is sometimes putting up fences, that would mean that not all fences are supposed to be torn down.
Chesterton’s fence has a specific definition. It’s not supposed to mean restrictions on social conduct or mores like you seem to be implying.
Social conduct is the context, not the definition. Chesterton's fence is just about not touching things you dont understand.
IMO, the world simply functions better when we strive for virtue.
Amoral by what standard? That’s where the conservatism comes in.
Amoral, not immoral.
Sure, but Chesterton's Fence is a pretty foundational argument among many conservatives.
Conservatives think societies are hard to understand, which makes them hard to engineer, and replacing institutions that work with new inventions needs to be done carefully and slowly.
Think of it as grift and not gambling.
I think most serious left-wing people also hold a strong aversion to gambling on the grounds that it's financially exploitative and can be viewed as a regressive tax on the poor/uneducated.
Conservatives don't have a monopoly on morality.
The whole nation is eaten up by gambling and other vices at this time. It's not the first time such a thing has happened in a nation's history. Generally it occurs just after widespread monetary debasement and just before major, world shaking disasters. (You Are Here.)
Reference: Andrew Dickson White (first president of Cornell) "Fiat Money Inflation In France", published 1896:
"The government now began, and continued by spasms to grind out still more paper; commerce was at first stimulated by the difference in exchange; but this cause soon ceased to operate, and commerce, having been stimulated unhealthfully, wasted away.
Manufactures at first received a great impulse; but, ere long, this overproduction and overstimulus proved as fatal to them as to commerce. From time to time there was a revival of hope caused by an apparent revival of business; but this revival of business was at last seen to be caused more and more by the desire of far-seeing and cunning men of affairs to exchange paper money for objects of permanent value. As to the people at large, the classes living on fixed incomes and small salaries felt the pressure first, as soon as the purchasing power of their fixed incomes was reduced. Soon the great class living on wages felt it even more sadly.
Prices of the necessities of life increased: merchants were obliged to increase them, not only to cover depreciation of their merchandise, but also to cover their risk of loss from fluctuation; and, while the prices of products thus rose, wages, which had at first gone up under the general stimulus, lagged behind. Under the universal doubt and discouragement, commerce and manufactures were checked or destroyed. As a consequence the demand for labor was diminished; laboring men were thrown out of employment, and, under the operation of the simplest law of supply and demand, the price of labor--the daily wages of the laboring class--went down until, at a time when prices of food, clothing and various articles of consumption were enormous, wages were nearly as low as at the time preceding the first issue of irredeemable currency."
He's writing about Revolutionary France's debasement, but Mackay's Extraordinary Delusions documents France's debasement under John Law about 70 years earlier, which shows how easily such mistakes are repeated.
"The mercantile classes at first thought themselves exempt from the general misfortune. They were delighted at the apparent advance in the value of the goods upon their shelves. But they soon found that, as they increased prices to cover the inflation of currency and the risk from fluctuation and uncertainty, purchases became less in amount and payments less sure; a feeling of insecurity spread throughout the country; enterprise was deadened and stagnation followed.
New issues of paper were then clamored for as more drams are demanded by a drunkard. New issues only increased the evil; capitalists were all the more reluctant to embark their money on such a sea of doubt. Workmen of all sorts were more and more thrown out of employment. Issue after issue of currency came; but no relief resulted save a momentary stimulus, which aggravated the disease. The most ingenious evasions of natural laws in finance which the most subtle theorists could contrive were tried--all in vain; the most brilliant substitutes for those laws were tried; "self-regulating" schemes, "interconverting" schemes--all equally vain. All thoughtful men had lost confidence. All men were waiting; stagnation became worse and worse. At last came the collapse and then a return, by a fearful shock, to a state of things which presented something like certainty of remuneration to capital and labor. Then, and not till then, came the beginning of a new era of prosperity.
Just as dependent on the law of cause and effect was the moral development. Out of the inflation of prices grew a speculating class; and, in the complete uncertainty as to the future, all business became a game of chance, and all business men, gamblers. In city centers came a quick growth of stock-jobbers and speculators; and these set a debasing fashion in business which spread to the remotest parts of the country. Instead of satisfaction with legitimate profits, came a passion for inordinate gains. Then, too, as values became more and more uncertain, there was no longer any motive for care or economy, but every motive for immediate expenditure and present enjoyment. So came upon the nation the obliteration of thrift."
Please don't make posts consisting of quotes and nothing else. HN is a supposed to be a site for curious conversation. It's not hard to see how posts like this interrupt that and bog it down - imagine someone at a dinner party* reading entire paragraphs like this out loud.
(* I don't know why I said "dinner party", since I don't go to those, the conversation usually isn't good, and they aren't my idea of fun, but oh well, it makes the point)
It definitely bogs things down. I would have preferred even an AI summary of the text, granted that it was accompanied by additional commentary to tie that to the subject at hand, rather than dumping in text with the assumption that the reader will understand the implicit connection.
Since you have now shadowbanned my comments from the site, I'm guessing you won't read this, so it's probably safe to point out that you are a useless, whiny fag who desperately needs to get out of his mom's basement and get a life.
I don't know if this will help or not, but I didn't shadowban you. (I wouldn't post a moderation reply and at the same time ban the account without saying so; that would be incongruent.)
What happened is that, independently of my reply, HN's software started killing your posts because your account had crossed some thresholds at which the software starts doing that.
Like I said, it may be a distinction without a difference to you, but that's what happened.
I don't really understand your point. We should reject ideas that make us feel like we have to sit through a monologue at a dinner party?
We should find more interesting ways to communicate ideas than lengthy recitation.
"In this mania for yielding to present enjoyment rather than providing for future comfort were the seeds of new growths of wretchedness: luxury, senseless and extravagant, set in: this, too, spread as a fashion. To feed it, there came cheatery in the nation at large and corruption among officials and persons holding trusts. While men set such fashions in private and official business, women set fashions of extravagance in dress and living that added to the incentives to corruption. Faith in moral considerations, or even in good impulses, yielded to general distrust. National honor was thought a fiction cherished only by hypocrites. Patriotism was eaten out by cynicism.
Thus was the history of France logically developed in obedience to natural laws; such has, to a greater or less degree, always been the result of irredeemable paper, created according to the whim or interest of legislative assemblies rather than based upon standards of value permanent in their nature and agreed upon throughout the entire world. Such, we may fairly expect, will always be the result of them until the ñat of the Almighty shall evolve laws in the universe radically different from those which at present obtain.
And, finally, as to the general development of the theory and practice which all this history records: my subject has been Fiat Money in France; How it came; What it brought; and How it ended.
It came by seeking a remedy for a comparatively small evil in an evil infinitely more dangerous. To cure a disease temporary in its character, a corrosive poison was administered, which ate out the vitals of French prosperity.
It progressed according to a law in social physics which we may call the "law of accelerating issue and depreciation." It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically impossible.
It brought, as we have seen, commerce and manufactures, the mercantile interest, the agricultural interest, to ruin. It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer. It ended in the complete financial, moral and political prostration of France--a prostration from which only a Napoleon could raise it."
What's the point of posting entire book fragments here?
So that lazy people who form their worldview via a Quick Google Search, Wikipedia articles, and/or "news media" can actually have a chance to learn something real about the time they are living in.
It's like a dozen paragraphs, forming one complete argument. Is this too much material to take in all at once, in this brave new TLDR tomorrow?
Neat in theory, but in practice ineffective. Those who might read multiple large exerpts from a book would actually seek out the source.
Do as you wish, however I doubt this will have the effect you want here.
> It's like a dozen paragraphs, forming one complete argument. Is this too much material to take in all at once, in this brave new TLDR tomorrow?
The issue is not that you cited a dozen-paragraph argument, it's that you inlined all the text directly into a series of comments instead of a link to the text on a separate page. It visually overwhelms the discussion thread and is disruptive to the broader discussion, which is not strictly against guidelines but generally seen as non-normative behavior.
i enjoyed reading it thank you
I don't come here to read lengthy quotes from random authors. I come here for discussion and interesting viewpoints from our community. Posting a lengthy quote is low-effort; more valuable would be to write up your take on it in your own words, and, if you want, link to the original source material that you would have otherwise quoted.
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I am broadly in favor of the existence of prediction markets. They are powerful tools for forecasting complex events that can help enrich and empower folks from across a range of backgrounds.
The article has two core points, but fails to go deep enough in addressing either. This leads to a _somewhat_ incorrect scapegoating of prediction markets rather than acknowledging head on some more core issues with the state of American journalism. Bullet (1) addresses this core issue while bullet (2) tries to suggest some ways in which these prediction markets can better harnessed to serve the interests of journalists and readers/viewers. IMO the first point is far more important than the second to understand the broader challenges.
1. The centralization and roll-up of American media has led to a dangerous monoculture where truth and accuracy risk being compromised by pressure from big business as well as politicians.
This is by design. It is important for folks to recognize that these are systematic efforts to denigrate and marginalize critical/skeptical voices by individuals with tremendous amounts of wealth and power. A prime non-journalism example of this is the persecution and harassment of short sellers (like Andrew Left) in public markets.
2. Prediction markets are not being described / addressed with sufficient uncertainty. The article touches on this, but fails to go so far as to suggest a fix. Prediction markets should, as the editors/implementers at orgs in the article suggest they do, serve as another data point rather than the whole story.
They should be addressed with the skepticism applied to any source (a lot of "journalists" don't even do this anymore though) with the source, values and market depth questioned.
Editorial standards need to be improved to accommodate this (don't report on very thin markets, acknowledge high amounts of uncertainty, signs of manipulation, and provide a bit of market structure analysis education to readers. All of this is more feasible than ever with good analysis tooling that can be re-appropriated from what professional market analysts (and gamblers) use to assess their odds.
If journalists want to add market information to their reporting then great, just do it responsibly instead of yeeting some number from strangers on the internet.
--
Fight back by voting with your dollars and speak up in favor of the truth. Boycott garbage sources and platforms that are trying to one-shot your friends/parents and support strong investigative and local journalism with your money. Talk to your friends and family and encourage them to do the same. Voting with your dollars and presence is one of the most powerful tools you have in our heavily market based society.
> They are powerful tools for forecasting complex events that can help enrich and empower folks from across a range of backgrounds.
gross. This sounds like a press release.
It's gambling dressed-up as forecasting.
Your response is very dismissive in that it doesn't engage with any of the other parts of my comment that provide a lot of nuance and analysis for the issues presented.
My description, and appreciation, for these types of tools and their trade-offs comes from reading about their early proposals. I don't trade or engage with any of them in their current form.
Recommend reading early work on them by Phillip Tetlock, as well as the many criticisms and responses that came about at the time and basically covered all of the ground we're retreading today in these discussions.
> A billionaire congressional candidate can’t just send a check to Quinnipiac University and suddenly find himself as the polling front-runner, but he can place enormous Polymarket bets on himself that move the odds in his favor.
Maybe not with a specific pollster depending on their scruples, but you can definitely pay to be part of the poll. And that’s the first step to getting any stats whatsoever.
It doesn't really work, up until a few weeks before the NYC mayoral election. Polymarket had Andrew Cuomo winning by double digits.
It's a trash platform.
There are much better ways to tell if a prediction market is well calibrated than a single anecdote.
And if it works so poorly, there's a lot of easy money to be made.
But this isn't a prediction market... those are highly regulated. This is just making money off of insider info. So yeah, not only does it work poorly it's entire reason for existing is to help people get richer while fucking over others.
"Accounts payable: 11111. In 1 hour. John Wick. Excommunicado."
The essence of prediction markets.
Stop calling them "prediction markets" and start calling them what they really are: corporatized bookies.
Bookies determine the odds and typically refuse to take bets from skilled bettors.
A market is open to all, with the odds influenced by all participants. In established betting markets such as for stocks, pros dedicate their careers and their organizations to improving the public estimates emerging from the market (though not for the sake of that improvement).
General prediction markets might turn out bad, but the above isn't an argument why, it's namecalling.
They're also heavily, heavily fixed of course. There's nothing stopping anonymous folks from betting on things they control/influence.
That's the point. To surface non-public information as a price signal.
Disagree here. That's the stated goal and the point for some folks, but the subset I explained above also exists and their point is to benefit from a false sense of security.
I just can't take anyone who uses that term seriously. Just because a billionaire CEO told you it's not gambling doesn't mean it's true.
At least in gambling they don't let the sports referees and players gamble.
This is just another racket for those in power to continue making the world worse for just a little bit more gain for themselves.
Edit: Throttled like always, you guys hate me (and reality/law in this instance) https://www.nbcnews.com/sports/sports-gambling/20-charged-ba...
>>At least in gambling they don't let the sports referees and players gamble.
Oh c'mon now. This is completely impossible to police. Players and referees are not under constant supervision. They have families, friends, partners. Some of them got caught but you can be certain most weren't because it's just very difficult to catch.
There are always multiple people who know about key players' injuries, illness, other factors. The game is negative sum and additionally insiders take a a chunk for themselves. It's worse then roulette which at least doesn't pretend to be fair.
It isn't impossible to police. Players and referees are under supervision...I am not sure why you think this isn't the case. Regulated gambling companies i.e. not Polymarket, maintain lists of people who are connected to sports inc. through family. And they maintain systems that monitor unusual betting activity that is shared across the industry, it is quite easy to detect this activity because most of the flow that bookmakers see is uninformed. So if you see a customer that doesn't bet regularly put down $10k, line moves in their favour...that is obviously extremely suspicious because that won't happen with 95% of the volume you take.
As an example, there was a football player in England who had a friend that bet on a transfer market (a market that is extremely prone to inside information). It was detected immediately (despite being a relatively small bet of $10k, I have heard anecdotally that insiders have been detected in this market down to $500 bets), the player was banned, fined $500k, etc.
Btw, the reason these systems exist is because there are certain sports that are too lucrative not to make a market in but the economics/nature of the game mean that matches are easily fixed: 99.99% of this activity is low-ranked professional tennis, and surveillance has been very effective (all of this is funded, not by professional tennis, but by gambling companies). Generally, this isn't as prevalent with US sports because none of those preconditions exist for the major sports.
Doesn’t seem like slow-walking so much as a mad-rush. I saw a Kalshi ad on tv last night.
Prediction markets have an alluring quality that they become a pulse-check on what humanity believes is going to happen, putting your money where your mouth is, and when they work like this they work pretty well and are an interesting instrument. Brian Armstrong, the CEO of Coinbase, has even gone so far as to say that Insider Trading is a necessary source of data for prediction markets, if the goal of prediction markets is to be an accurate prediction of the future [1]. However, it seems increasingly clear that even this function of prediction markets doesn't behave how the silicon valley elite seem to think it does. In multiple markets throughout 2025, we saw insiders "snipe" correct predictions at the last minute, while odds were still against the correct outcome, moments before some finalizing event or news became public.
In theory, insiders give correct signal. But in practice, their volume is often too low to meaningfully move the market in the correct direction, and the timing of their order flow can be too late for that signal to actually be useful as a tool for predicting the future.
Its also critical to note that insider trading laws don't just exist to protect investors. They exist to protect the organizations the insiders belong to. The order flow on both prediction markets and the stock market is public information. Its one thing to short the company you work at because you know they're going to announce bad earnings. Its another thing entirely to take out a million-dollar position on "US Strikes Venezuela before Jan 3: Yes" on January 2nd. Sophisticated geopolitical opponents are monitoring these order flow feeds, and it begins to become a genuine matter of national security.
Overall, I am fine with prediction markets. I think they're an improvement over sports betting in the sense that they better-align incentives between the participants and the market-maker. In typical sports betting, the casinos running them set the odds, and participants take out positions against the casino; which means the casinos are incentivized against allowing anyone to actually make money on their platforms. This has surfaced many times in "professional sports betters" getting blacklisted. In comparison, PMs are a contract between participants, and the market-maker only takes a fee on each transaction (Robinhood's is 2.5%; quite high), which means the market-maker is only incentivized to increase PM order book volume and provide interesting markets. There's more opportunity for actual skill and dedication to shine through.
But, KYC is critical.
[1] https://x.com/itslirrato/status/2008184149450891724
since financial speculation exists, the news has been about gambling.
Regular people just didn’t know it cause the ticket to entry was to expensive.
If insiders trade, the market becomes more accurate, which is good for society. Like WikiLeaks. Thus the MSN panic, the legacy establishment wants Polymarket to follow Assange's path.
That sounds a lot like "the magical hand of the markets" and "trickle down economics". A hope surrounded by a semblance of logic but not a lot thought put on the important details of how things actually work.
With this I mean: I can think of several ways in which this would go in the other direction (bad for society). And I am not an economics expert.
The problem discussed in the article was NOT insiders trading on secret information — it is the nearly opposite problem of manipulators trading and skewing the odds.
Insider trading seeks to trade with secret information and minimally obvious trades to avoid moving the markets until their position is locked in, in order to profit when the previously secret information becomes public and the market finally moves to a different price level.
Manipulators seek to move the market to create a false narrative that market-moving info exists when actual market-moving does NOT exist; the expectation is that people will see the price change and ASSUME there is information behind it, when there is actually just a manipulator willing to lose money to create that impression.
In a small market, such manipulation can be more cost-effective (make more of an impression for the same cost) vs buying advertisements.
I am guessing you must have made huge amounts of money from this irrational behaviour then. Congrats.
Yep, some WH member trading 400k$ an hour before an attack sure did wonders for "the good of society". So does media showing rates on gambling websites as if they were an oracle and not something that can be gamed for cheaper than a TV ad.
For fucks sake...
chaos-for-profit incentive is what terrifies me
Isn't Polymarket very low stakes? For example "Will Trump acquire Greenland before 2027" market (the main one for this issue) has only 14m USD volume. This is like 2 orders of magnitude less money than is bet on El Classico 2 times a year.
There are risks connected when prediction markets run wild but Polymarket ain't it. There is also utility. It has high predictive value (it beats polls for elections from a little sample I've looked at) and allows you to make better decisions.
It beats polls for elections ONLY until someone notices it is being used as the basis of news stories and figures out it will be four orders of magnitude cheaper to manipulate that small market and make the news idiots broadcast that opinions have changed than to actually deploy all the adverts needed to change the opinions.
The very low stakes you point out make this even easier to put a thumb on the scales.
Goodhart's law: "When a measure becomes a target, it ceases to be a good measure"
The point of the article is that as soon as the "news" started reporting on prediction markets or corporatized gambling as if it was a measure of sentiment, it ceased to become a good measurement. That point has long passed.
News already broadcast tons of nonsense. Political commentary is just brain rot. Economic commentary might be just as well generated by one of those Markov chain string generators - it would make as much sense.
>>out it will be four orders of magnitude cheaper to manipulate that small market and make the news idiots broadcast that opinions have changed than to actually deploy all the adverts needed to change the opinions.
It will then become more expensive. Out of all the manipulation news and journalists do every day I am not sure why "people bet money at 1 to 4 odds that Trump takes Greenland before 2027" is particularly problematic. It's true people bet money on it at those odds. How is that more problematic that news running pro or anti Trump segments or broadcasting some random crystal ball readings to justify stock price fluctuations of the day? You can see how much money is bet on the market as well. It's not like you can spend 5 figures and suddenly shape the narrative.
Right, we agree on just about everything. Political and economic commentary is generally brain rot, and Polymarket, etc. is not an accurate predictive tool
And yes, if it starts to be seen as one of the levers to manipulate in manipulating public opinion, it will become more expensive. That does not improve it's predictive value, since we never really know how expensive it is on either side relative to the bankrolls and motivations of those who might want to manipulate it.
But for anyone who wants to use it as a crystal ball, go right on ahead — good luck with that!
There is a certain kind of person who thinks that all the news they disagree with is being faked by people who will spend multiple millions on Polymarket just to get a news story on CNN.
This person does not realise that most people do not pay attention to the news, that people in power are not glued to the news waiting for journalists to tell them what to say, or that the news is generally not very important...except to people like them who play out these fantasies about wealthy people mind-controlling them through CNN.
Text-only, no Javascript:
https://assets.msn.com/content/view/v2/Detail/en-in/AA1Upfdb
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The internet is too connected and communication too instantaneous for Polymarket to be anything but a system to be gamed by those with money and influence.
Bet appears on Polymarket? You have the ability to direct people and resources to enact the under? Congrats you're rich!
Rich might be overstatement, but WNBA dildo stir show that people are ok with risking jail time over relatively low amounts of money.
>You have the ability to direct people and resources to enact the under? Congrats you're rich!
If you have the ability, you are already rich.
Rich people continually attempting to accrue even more money is not exactly an unheard-of phenomenon
What happens to rich people when they get more money, do you think they just stop further attempts at acquiring more?
Sometimes they go on a ketamine binge shrugs
Occasionally they make historically bad bets and blow up their fortunes, and it gets eaten up it all the smaller sharks circling behind them. It used to be most billionaires only lasted (as billionaires) for 3-7 years before collapsing.
The current stock market insane binge has changed that a bit.
Yeah, they historically don't like to keep increasing their wealth, Elon musk going from 350bn to nearly 800bn in like 2 years is definitely not an example of that.
Why is polymarket worse than cell phone games? At least polymarket essentially self identifies as gambling and isn't specifically marketed to children.
Cell phone games are knowingly losing money for fun. Polymarket is a sign of a failing, rapidly deregulatory economy.
And that's before we get into discussing the social damage to country that already sees more school shootings than weeks in a year (actually, 4x more), with rising political and civil tensions including assassinated politicians, adding potential "lose your house" to random events. As if it'll help calm things down and let us all keep a level head.
Or the implications of news companies reporting on these odds as if they reflect actual statistical likelihood, and how that gives the ultra wealthy yet another lever to control the view of reality the common people have.
The writer obviously hasn’t done any deep study of prediction markets and why they often provide greater insight than other polling techniques. Are they perfect? No. They predicted Hillary would win in 2016.
Had they existed then, prediction markets would have picked Hillary to win also
They did exist and they did predict Hilary.
You obviously missed the point of the article. The point is that validating and advertising Polymarket on national news outlets will have ugly consequences.
It's amazing how many people on HN didn't bother to actually read the article.
I did not miss the point of the article. You obviously missed my point, however.