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Prediction markets have an elections problem

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Re: Prediction markets have an elections problem

#131

Post by yieldcrv »

defen wrote: post #118
bluedays wrote: post #110

Earlier quoted context omitted.

How does that work? Being a professional gambler, I mean. I'd love to know more about this.

The IRS has various rules in place that determine whether gambling is your business / profession. If you qualify as a professional gambler, you can deduct losses against your winnings (just like casual gamblers can) but you can also deduct your "business expenses" (e.g. cost of travel, hotels, meals, etc that you spend in pursuit of your business).

2017 tax reform took all of that away for gamblers. they are on as equal footing as casual gamblers, at least for when net losses exist, there are no more NOLs to carry forward (or back) which is what made that status the most useful

https://www.journalofaccountancy.com/issues/2018/oct/pro-gam...

but some deductions maybe yeah

Re: Prediction markets have an elections problem

#132

Post by skybrian »

jrm4 wrote: post #47

There's no problem here at all; except perhaps the wildly absurd fantasy of "perfectly rational (and/or intelligent) markets," which the popularity of e.g. lotteries and casinos immediately disproves. Not much to see here.

It might be a problem for the argument that prediction markets are socially useful rather than just a way to have fun?

On the other hand, maybe they're somewhat useful as a rough indicator.

Re: Prediction markets have an elections problem

#133

Post by JohnMakin »

I remember in 2020 election markets, from ~mid 2019 onward you could take whether hillary clinton would run in 2020. It was a funny market until she started missing filing deadlines and something weird happened - the line became MORE favorable towards hillary running. It went on like that for quite a long time, well past the point where anyone with a room temp IQ would figure out she had zero chance of running because she wasnt running.

Even up to about a week before the actual 2020 election, she was still trading at almost 10 cents on the dollar for “yes she is running.” Just wild. I don’t think it’s a problem for these markets, just the nature of the beast being that people easily believe conspiracy theories and propaganda and if you’re a gambler there’s a lot of money to make.

Re: Prediction markets have an elections problem

#135

Post by glerk »

> Unless we make sure that market structures are providing the right incentives in the right way, we shouldn’t be surprised if prediction markets continue to struggle.

This conclusion is incredibly vague. What are "the right incentives in the right way"? Is there anything concrete that the author proposes here?

Re: Prediction markets have an elections problem

#136

Post by joenot443 »

fulladder wrote: post #35

The author does not understand bid-ask spreads, does not understand distortions created by fees, does not understand that the last trade price is not the same as what you can get at present, and just generally does not understand the realities of trading in markets. This article is a zero-information void.

My cynical observation here is that betting odds[1] aren't looking great for the incumbent. The author, Jeremiah Johnson, is the founder of a Washington NGO for the center-left [2] and probably has some skin in the game in keeping the status-quo in the White House come November.

[1] www.electionbettingodds.com

[2] www.cnliberalism.org

Re: Prediction markets have an elections problem

#137

Post by quickthrower2 »

bluedays wrote: post #110
mattmaroon wrote: post #67

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit. Being a great gambler mostly means not gambling until you have an edge, and what he says about and market being less accurate than 538 is true in my experience. I’ve been betting on there every couple years for maybe ten or so, it’s held up well. As many ment…

How does that work? Being a professional gambler, I mean. I'd love to know more about this.

The most open information is about poker. See the forums. Many of the concepts there apply to other sports. The idea that you don’t know if you are any good until you played 10000 hands etc. Trying to make money off lots of little edges. In a sport you probably need to model every game very well, use AI/ML (mostly linear regression though). Honestly it is boring frustrating work IMO.

Re: Prediction markets have an elections problem

#138

Post by hx8 »

dexwiz wrote: post #129
Geezus_42 wrote: post #113

Earlier quoted context omitted.

Pretty sure it's a joking way of saying they used to be a day trader.

You can grind out poker games for a living, especially when there is a steady stream of rubes that think they’re hot stuff because they clear out friendly home games. In the long term those kind of people always lose to the pros.

I grinded online poker games for a summer in college. I observed opponents betting behavior and classified them into one of a half dozen strategies and then ran a strict algorithm based on who I was betting against. I ran three tables at the same time, finding success in rapid low stake games. My edge at the time was varying my play based on my opponent. Many of the other professional low stake players at the time were running simpler strategies on more tables.

Re: Prediction markets have an elections problem

#140

Post by HDThoreaun »

jrm4 wrote: post #47

There's no problem here at all; except perhaps the wildly absurd fantasy of "perfectly rational (and/or intelligent) markets," which the popularity of e.g. lotteries and casinos immediately disproves. Not much to see here.

Lotteries are rational when you consider the entertainment value. Most lottery players dont expect to win, but as long as theres the possibility it allows them to daydream about what they would do if they did.
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