Prediction markets are breaking the news and becoming their own beat
niemanlab.org28 points by gnabgib 6 hours ago
28 points by gnabgib 6 hours ago
I don't understand, what's so fundamentally wrong with this form of insider trading? Is the accusation that it makes degenerate gambling unfair? Is it necessary for degenerate gambling to be fair? The gamblers don't seem to care.
beyond the general idea that we shouldn't normalize gambling, betting on some real-life events is horrid. think about insider trading on a polymarket bet for someone's death.
Or even worse what happens when people start gambling that someone won’t die today? It opens the door to crowdsourced hits with plausible deniability.
> The gamblers don't seem to care.
Which makes me wonder if it is actually just money laundering.
The obvious counter example is lotteries. People just like to gamble.
Well, you can also use normal lotteries for money laundering: https://www.ftm.eu/articles/reynders-charged-in-money-launde...
Matt Levine pointed out in a past article that the real danger of insider trading are company insiders being incentivised to damage the company to make a quick buck.
> insiders being incentivised to damage the company
I'd like to emphasize that this incentive doesn't have to be accidental either. The "market" can end up facilitating anonymous crowd-sourced bribery by enemies or competitors, who create the potential for profit knowing that it will lure an insider.
Every time I see a prediction-market executive dismissing these kinds of issues, I imagine how their tune would change if the shoe was on the other foot. For example, if someone created a "prediction market" where people could anonymously bet on unusual deaths or serious injuries of... prediction-market executives.
How is it different than shorting or buying put options and then damaging the company? The tools are already there.
These apps claim to let you turn your knowledge into money. What this means is the insiders get to cash out and the desperate suckers provide the liquidity. I'm amazed they've all gotten away with this for so long.
I (my agents) have been playing with the kalshi and poly market APIsv and whatever your opinion on the markets themselves it does feel like there's a bunch of interesting things to do with such a firehose of realtime data.
I hope they stay as open and generous as they are now with programmatic access
"I hope they stay as open and generous as they are now with programmatic access"
Make a prediction for it: When will Gamma/Data/CLOB require subscription: 2026, 2027, etc.
I didn't bet on the beat this broke on.
I dunno, I feel it's just democratizing insider trading. And as everyone knows, if it has "democratizing" in it, that means it's automatically good.