Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Effort to prevent government officials from engaging in prediction markets

merkley.senate.gov

Post reply on HN
Print view View original

41–50 of 141 posts

Re: Effort to prevent government officials from engaging in prediction markets

#41

Post by zaik »

mvkel wrote: post #37
nomilk wrote: post #35

I recall a few finance papers saying (paraphrasing) "approximately all private info is reflected in stock prices". The same is obviously true of prediction markets. If government officials are banned, they'll just give a little wink to a relative or friend, and the prediction markets will reflect the private information. On a personal note, I find these markets incredibly useful in day to day life. There's been a jok…

Accurate info on what? Most markets have almost no liquidity, outside of sports and crypto

Elections usually also have good liquidity.

Re: Effort to prevent government officials from engaging in prediction markets

#42

Post by pear01 »

matthewfcarlson wrote: post #30
pear01 wrote: post #7

Earlier quoted context omitted.

Don't be needlessly cynical. This is a good effort. So is the ban on stock trading. This administration is such that it is bringing corruption to the fore in a way not seen in generations. Things are always hard to pass at the start. Keep pushing and this administration will create a massive opportunity to swing the pendulum if we can (as hard as it is now) retain some optimism.

To the people downvoting you, you just said the administration is bringing corruption into the public view. Some people believe they are exposing and some believe they are currently doing it. Either way, corruption and profiting off of a political position is certainly top of mind for many Americans atm.

Ah interesting thanks for pointing out the ambiguity in my statement. I definitely did not intend that ambiguity but you also rightly point out it sort of works either way. I would think this would lead to more upvotes than downvotes but perhaps a trend of cynicism also is reflected in assuming the least favorable interpretation.

Thanks for pointing that out.

For the record, I meant the latter. Let the downvotes commence!

Re: Effort to prevent government officials from engaging in prediction markets

#43

Post by nomilk »

mvkel wrote: post #37
nomilk wrote: post #35

I recall a few finance papers saying (paraphrasing) "approximately all private info is reflected in stock prices". The same is obviously true of prediction markets. If government officials are banned, they'll just give a little wink to a relative or friend, and the prediction markets will reflect the private information. On a personal note, I find these markets incredibly useful in day to day life. There's been a jok…

Accurate info on what? Most markets have almost no liquidity, outside of sports and crypto

Political outcomes is the biggest. Businesses (and individuals) can be strongly (financially) affected by who's elected. I'd been very curious in the past about political outcomes but had never used prediction markets, so I built a little tracker that inputed the probabilities based on scraping ~14 betting sites. I had to do it on a market-by-market basis, and there were lots of edgecases. Having them all in one place (or two; kalshi and polymarket) makes life much simpler.

Prediction markets have also directly affected my travel planning, helping me avoid a country that wasn't at war at the time but had (in my judgement) a too-high risk of war.

You're completely right about thinly traded markets; those are way, way less accurate. But they also offer the greatest opportunity for someone to bet the other way, which has the effect of 'correcting' the market.

Re: Effort to prevent government officials from engaging in prediction markets

#44

Post by ddtaylor »

tlb wrote: post #9
ronsor wrote: post #6

If we can't ban them from trading stocks, good luck with this.

It's easier to ban things before they become entrenched than after. Banning stock trading is hard today because most senators have been doing it for years before getting elected. I'd be in favor of senators doing prediction markets, just limited to small dollar trades so they can get better at predicting.

Most criminal activity is hard to change when it's already happening. There is no reason to mollify the problem further.

Re: Effort to prevent government officials from engaging in prediction markets

#45

Post by cyanydeez »

staplung wrote: post #5

Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.

I mean, North Korea has some very deadly incentives if this whole "buy your prediction" market is brought online.

Re: Effort to prevent government officials from engaging in prediction markets

#46

Post by pear01 »

ddtaylor wrote: post #40
pear01 wrote: post #7

Earlier quoted context omitted.

Don't be needlessly cynical. This is a good effort. So is the ban on stock trading. This administration is such that it is bringing corruption to the fore in a way not seen in generations. Things are always hard to pass at the start. Keep pushing and this administration will create a massive opportunity to swing the pendulum if we can (as hard as it is now) retain some optimism.

Blindly trying things without taking signals from outcomes of the past seems like madness. If you have evidence you have failed at walking many times, should you be putting your energy and efforts into running and jumping instead of continuing to pursue walking?

That's not what I'm doing and I think you know that. Reform takes time. If everyone gave up just because things were difficult n times nothing in government would ever change. The state is not a startup. Behind every significant piece of legislation is a battle.

Re: Effort to prevent government officials from engaging in prediction markets

#47

Post by plantain »

soared wrote: post #28
romaaeterna wrote: post #14

> A Mystery Trader Made $400,000 Betting on Maduro’s Downfall > Prediction market trader 'Magamyman' made $553,000 on death of Iran's supreme leader

You can review that user’s trade history. It’s a bit weird for sure, but they didn’t just stop in to bet on those. They’ve bet huge sums on every prediction relating to Iran, Israel, sp500, recessions, etc. They’ve been betting for 2 years but only recently starting profiting a lot. https://polymarket.com/profile/%40Magamyman

If they're smart they'll have multiple accounts with bets each way netting to ~0 on all kinds of topics, and just omit the losing trade on the information they actually have.

Re: Effort to prevent government officials from engaging in prediction markets

#48

Post by idle_zealot »

GaryBluto wrote: post #26
idle_zealot wrote: post #23

Earlier quoted context omitted.

Or, and I beg you to consider this radical position: we arrest people who break the law (insider trading is illegal) and those who knowingly help them to do so (the operators of the prediction markets). How quickly we accept the death of even the ideal of rule of law in favor of embracing a return to an explicit rule by might, fuck-you-got-mine mentality.

It doesn't break the law.

From Wikipedia[0] because I can't be bothered to read more than a few paragraphs:

> In 1909, well before the Securities Exchange Act was passed, the United States Supreme Court ruled that a corporate director who bought that company's stock when he knew the stock's price was about to increase committed fraud by buying but not disclosing his inside information.

Based on anti-fraud common law alone the court decided it was illegal for an insider to trade stocks with non-public information. An explicit law would be nice, but a reasonable interpretation of basic law would see most of our ruling class behind bars. This is only highly-contested and technical because we've let our standards slip so far.

0: https://en.wikipedia.org/wiki/Insider_trading

Re: Effort to prevent government officials from engaging in prediction markets

#49

Post by dogmayor »

Prediction markets and crypto will continue to ride the wave while this administration is in office. But I expect prediction markets will come to be thought of as slimy gambling dens ridden with fraud no different than crypto. The cancerous "greed is good/gamble on everything" attitude prevalent today in America will come crashing down at some point. When? Who knows. The sooner the better.

But for now, make sure you get in your bets er i mean predictions on this mega important market: "Elon Musk # tweets March 3 - March 10, 2026?"[1]

[1] https://polymarket.com/event/elon-musk-of-tweets-march-3-mar...

Re: Effort to prevent government officials from engaging in prediction markets

#50

Post by Animats »

staplung wrote: post #5

Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.

Congress was not even notified in advance of the wars on Iraq or Venezuela. Any leaks came from the executive branch.
Post reply on HN