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.

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

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?

Having fire insurance and burning your car is in most jurisdictions illegal. Yes, you should be paid if your car is burned, but if you do it intentionally, you are obviously increasing the chances of getting paid, unless of course the insurance company finds out you did it. And so on.

I don't see why these situations would be illegal and, say, betting against the survival of a regime when you're actually working against it, would be legal.

Things are even harder if you coordinate multiple people. For example, let's say 100 people bet that there will be a riot in town X by the end of the year. X is normally a quiet town so most people bet against. These 100 people bet this will happen 10 minutes before actually starting a riot themselves. Yes, someone could observe last minute trends and might predict reality, but last minute or huge bets are not necessarily true - someone could bet on random things for a variety of reasons. So it's not even useful as a way to get insights into the reality.

For one, it creates insanely imbalanced systems where two sides of a 50/50 market have completely opposite world views that when the market resolves may have access to sources, whether completely fake or misinfo'd, that lead them to believe the market should be settled in their favor. This then puts the prediction market in a place where it is the "arbiter" of reality - in a world where media has become so corrupt and full of noise, finding out what actually happened can be really hard.

So then, a market such as this seems inevitable to me because you can then point to markets and say "see, it resolved this way." It does not perfectly align with truth but with market forces would probably lead to more truth than a reality where you just cherrypick whatever biased source that makes you feel good does. And of course, the market itself can become corrupt.

Am I missing something? Maybe it's already being used in that way... in that case, it would be quite scary.

Betting (risking something known for a payout which is uncertain), is ubiquitous in life, and really any game where the participants don't have perfect information. You are betting even if you don't realize it. You can't opt out, it's part of the human condition.

Gambling refers to taking on risk for the feeling it brings. The fact that humans can gamble reveals a quirk of human neurology. If we evolved to be more rational, then the phenomenon probably wouldn't exist. We know the feeling is valuable (to gamblers) because they are willing to place negative EV bets to bring about the feeling.

Anytime people criticize betting, it looks to me like some kind of utopian scheme, where everyone can have everything without risk.

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.

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...

This is how most people are these days! Or probably thats how human nature is!

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."

Part of me is careful what I wish for, starting with passengers bothering staff even more.

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.

Huh. That's interesting. Given futures markets on box office receipts are illegal.

https://en.wikipedia.org/wiki/Onion_Futures_Act

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?

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.

Good example to show when people tout how great these are at predicting.

Fool and his money are quickly separated…

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...

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.

Well, only if they are thinly traded. If they get mentioned a lot more on CNN and CNBC, that is likely to change.

Like reading some kind of Twilight Zone episode script [1] starring William Shatner…

[1] https://youtu.be/405IKLIMvJo

Any moderately intelligent people should realize why insider trading, banning athletes from betting, etc measures have been put in place. One should understand why without those (and even with) those there's perverse incentives to act in destructive ways.

Yet people here would be trying to discuss philosophy, semantics and tell you this is good because an insider betting on an attack on Venezuela 4 hours before it happened increases the accuracy of the prediction and the information being public, ignoring the elephant in the room of having the perverse incentives to influence destructive events. Just think about it: there might be people with incentives of attacking Greenland because they bet on it. This is madness.

This is the worst degeneracy of gambling and dangerous incentives combined, and it's all for nothing else but money. Just look at whose behind these projects: bs crypto adjacent fintechs and gambling companies.

I know we live in numb times where people have thrown in the towel of any hope for a better world, but ffs.

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.

The typical notion of the “attention economy” is that you build your audience by getting attention—doesn’t much matter how—and then you get paid to advertise things to them. Could be white label retail like supplements or hats, or could be “content partnerships,” or just straight up ads a la “this episode brought to you by Squarespace.”

Prediction markets only make real money if there is attention. I can predict when my neighbor will take out their trash cans, but without attention, no one will take the counter or put up funds.

Conversely if something does have a lot of attention, then literally anything about it can be predicted, bet, funded, and fulfilled.

I can’t think of a way to stop this, any more easily than I can think of a way to stop people from getting paid to shit-post ragebait slop on YouTube, X, TikTok, etc.

Attention is the complement of free expression. If we let people say whatever they want, then people can also pay attention to whatever they want.

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.

guess about the future (no money involved) = "prediction"

guess about the future (money involved) = "gambling"

"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.

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' :(

The essence of prediction markets.

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.

Prediction markets have gotten attention lately because it's so easy to manipulate them with small amounts of money and get signal amplified in subsequent reporting of the prediction markets "counterintuitive" signals. It is a form of reality shaping.

To that extent, they'll continue to exist, with just sock-puppet level activity until they are ignored.

Regular people just didn’t know it cause the ticket to entry was to expensive.

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.

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.

There's potential problems that might come from the benefits of prediction markets, like insiders getting incentivized to change the outcome or leak info.

But gambling is an old problem which emerges in many scenarios, casinos, card games, sports betting, financial markets, crypto.

This take is like a new hooters opening up on the moon and people complaining that there's alcohol addiction, food addiction, sexism, wage exploitation... yeah I know man, but it's on the moon!

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

https://assets.msn.com/content/view/v2/Detail/en-in/AA1Upfdb

Bet appears on Polymarket? You have the ability to direct people and resources to enact the under? Congrats you're rich!

Are prediction markets perfect? Of course not. But the difference is in prediction markets someone has something to lose (real money), whereas legacy news values sensationalism over accuracy and sobriety.