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Prediction markets are ushering in a world in which news becomes about gambling

theatlantic.com

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Re: Prediction markets are ushering in a world in which news becomes about gambling

#371

Post by colinmorelli »

floam wrote: post #329
colinmorelli wrote: post #205

Earlier quoted context omitted.

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 despi…

> 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 com…

This scenario seems very different because nobody gave the person any material non-public information at all, they simply deduced it from their experience participating in the trial. This feels similar to the question of "can a passenger on the Boeing jet with the door plug that blew out trade on that information" to which the answer appears to be yes.

Misappropriation theory is the following: > The misappropriation theory of insider trading is a form of insider trading where an individual trades stock in a corporation, with whom they are unaffiliated, on the basis of material non-public information they obtained through a breach of a fiduciary duty owed to the source of the information

The important part, which you're right was unclear in my comment is that the recipient of the information must have a fiduciary relationship with the source of the information, even if they do not have one with the company in question at all. That's the distinction.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#372

Post by maaaaattttt »

Wouldn't these markets be the perfect "crime crowdsourcing" platform? Let's say a bad actor wants XYZ to happen so they organise a bet on XYZ not happening. Then make sure as many different accounts that they control directly or indirectly bet a lot of money in the same way. Now anyone willing to win the prize can decide to make sure it does happen and get the money (at least a high multiplicator of what they bet themselves).

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

Re: Prediction markets are ushering in a world in which news becomes about gambling

#373

Post by collinmcnulty »

jbstack wrote: post #319
thecupisblue wrote: post #280

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 somethi…

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 “skill” line is what gamblers tell themselves to justify it. A much more useful demarcation is “does this game have any positive impact on the world” (entertainment value of the gambling itself doesn’t count). For example, insurance is not gambling even though it is itself a zero sum game, it enables societally beneficial risk taking. Options trading on real assets like stock aid in price discovery. Memecoins, sports betting, your local poker game and the way prediction markets actually function in practice are all gambling.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#374

Post by tgsovlerkhgsel »

thecupisblue wrote: post #280

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 somethi…

There are some distinctions between gambling and prediction markets. For example, in prediction markets, some forms of insider trading are considered somewhat desirable - essentially, it monetizes insiders leaking inside information.

Other forms of insider trading can be problematic: What if someone (could be an individual or even an uncoordinated group) bets millions of dollars on you not doing X, in the hopes of you taking the opposite bet and doing X?

The most extreme that I've seen presented so far are markets where people can predict the death date of a person. On the surface, that just seems like a morbid bet. Once you consider the above form of insider trading, you realize that this can act as a reward for someone who can accurately predict the death date of said person, for example because they're making the counter-trade from a phone next to a high-powered rifle on the rooftop across the street - and like in the bribe example above, the people on the "losing" side of the bet might not mind too much. https://en.wikipedia.org/wiki/Assassination_market

Re: Prediction markets are ushering in a world in which news becomes about gambling

#375

Post by cjs_ac »

moring wrote: post #330
nl wrote: post #324

Earlier quoted context omitted.

> 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 https…

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.

More than half of all physical slot machines in the world are in Australia.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#376

Post by tantalor »

lordgrenville wrote: post #363
tantalor wrote: post #331

> 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

Matt Levine discussed this a couple of weeks back: "It’s probably fine, though; you can bet on Netflix streaming numbers or Rotten Tomatoes scores. It is fun to think that everything is gambling except onions and movies, but it’s probably not true."

Nice, found that article:

https://www.bloomberg.com/opinion/newsletters/2026-01-08/mov...

Re: Prediction markets are ushering in a world in which news becomes about gambling

#377

Post by TeMPOraL »

tgsovlerkhgsel wrote: post #374
thecupisblue wrote: post #280

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 somethi…

There are some distinctions between gambling and prediction markets. For example, in prediction markets, some forms of insider trading are considered somewhat desirable - essentially, it monetizes insiders leaking inside information. Other forms of insider trading can be problematic: What if someone (could be an individual or even an uncoordinated group) bets millions of dollars on you not doing X, in the hopes of yo…

> What if someone (could be an individual or even an uncoordinated group) bets millions of dollars on you not doing X, in the hopes of you taking the opposite bet and doing X?

From their POV, that's the purest form of voting with money. If you do X, they're presumably happy with the outcome they just paid for; if you do the opposite of X, they at least have their payouts as consolation prize.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#378

Post by MrOrelliOReilly »

I believe there are valid critiques to be made of prediction markets, particularly on the morality of allowing bets on events with serious/market outcomes (the market could create an incentive for an insider to actualize that bad outcome, hence we should ban the market as it increases the odds of a bad outcome occurring) or on the negative repercussions of gambling addiction. Instead of making either of these valid arguments, the article instead decides to critique the epistemic value of prediction markets. It comes off to me as ill-informed handwringing and tribal signaling, rather than bothering to engage critically with the topic and offering a meaningful critique.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#379

Post by banannaise »

jbstack wrote: post #319
thecupisblue wrote: post #280

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 somethi…

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…

Talking about "traditional" sports gambling rather than prediction markets: how do we account for the heavy restrictions they place on "sharps" (consistent winners)? If a game can be won through application of skill, but winning through application of skill causes you to be effectively banned, then the game cannot be won through application of skill.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#380

Post by [deleted] »

thecupisblue wrote: post #280

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 somethi…

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