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We haven't seen the worst of what gambling and prediction markets will do

derekthompson.org

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Re: We haven't seen the worst of what gambling and prediction markets will do

#671

Post by mcmcmc »

mquander wrote: post #431
mcmcmc wrote: post #132

Earlier quoted context omitted.

I think the difference between the two is Amazon and Meta do provide some utility to balance it out, whereas gambling is purely a net negative on society. You can be young and naive enough to believe you're "making the world a better place" in big tech. You can't work on pure gambling products without being a scammer at heart; you know what you signed up for.

This comment would make more sense if it were before the new wave of prediction markets, which are high-profile gambling products clearly largely made and popularized by true believers who think they are making the world a better place.

> clearly largely made and popularized by true believers who think they are making the world a better place.

Is it clear? To a lot of people they come off as “true believers” in the same way as Kenneth Copeland and all the prosperity gospel hustlers. A lot of people thought Elizabeth Holmes was a true believer too. Easy to believe in something when it’s making you rich. Maybe VCs are just suckers for a bit of charisma.

Re: We haven't seen the worst of what gambling and prediction markets will do

#672

Post by mcmcmc »

cowpig wrote: post #415
mcmcmc wrote: post #151

Earlier quoted context omitted.

Prediction markets advertise insider trading as a feature, and enforcement of financial crimes is a racket anyway. If you know the right people, make the right campaign contributions, laws just don't apply to you.

this kind of cynicism is malignant

See I would say the malignant part is the systems and people in power who enable and profit from corruption.

Re: We haven't seen the worst of what gambling and prediction markets will do

#673

Post by [deleted] »

nickpp wrote: post #529
krastanov wrote: post #411

Earlier quoted context omitted.

This sounds incredibly naive. Competition does not magically prevent monopolies -- once you have a dominant player they just buy or undercut the occasional competing startup.

> once you have a dominant player they just buy or undercut the occasional competing startup If they buy startups, a thousand more will spring up hoping to be bought. Investors love this game. And if you think undercutting works, read up on the story of Dow and how they broke the German bromine monopoly [1]. There is no such thing as a natural monopoly. Only governments can create monopolies, usually through regulati…

[deleted]

Re: We haven't seen the worst of what gambling and prediction markets will do

#675

Post by jacobgkau »

__MatrixMan__ wrote: post #500
jacobgkau wrote: post #79

Earlier quoted context omitted.

> For instance, I'm in favor of bets that a certain astroid will strike the earth at a certain time and place. A signal from the prediction markets might cause somebody to evacuate in a scenario where they'd otherwise cry "fake news." I understand the point you're making, but in this case, you're still incentivizing someone somewhere to not attempt to the best of their ability to intervene in that astroid. Bets that…

If the bet can't cause any change in behavior then the whole thing is useless. The whole point is to do some good with it. The constraint is that the bettor can't alter the outcome. Another one would be discovering malware in a PR and betting loudly enough that it won't get merged. The bet is how you make your certainty rise above the bot noise and attract extra attention on the maintainers' part. Granted that's also…

> Another one would be discovering malware in a PR and betting loudly enough that it won't get merged. The bet is how you make your certainty rise above the bot noise and attract extra attention on the maintainers' part.

This example seems weaker than the asteroid example. Consider that if you're betting "loudly enough" it won't get merged, the less likely option becomes the malware actually being merged. Now you have a repo maintainer who can bet that it'll get merged (probably a more lucrative bet since it's less likely), and merge it to make money from that bet.

Re: We haven't seen the worst of what gambling and prediction markets will do

#676

Post by bit-anarchist »

epolanski wrote: post #654
bit-anarchist wrote: post #644

Earlier quoted context omitted.

And the naysayers would be right. They come from two approaches: - Property rights: bettors are waging using their own property at their own direct risk. To prohitbit such a thing is to violate their property rights, plain and simple; - Information aggregation: prediction markets originally appeared to help make informed decisions about an event by proof-of-stake. If I'm not mistaken, this idea was originally develop…

No, they would be wrong. Have them have a prediction market on whether their house will be arsoned tomorrow or they will be hit by a car and instantly they will recognize the danger of the incentives and the bs of "information hedging based on price discovery". Cause way worse events allow betting and profiting. Give me a break, we're at the complete decadence of society and its intellect. Nobody can recognize right…

I suggest that you think rationally about what you just said. Why wound anyone open a bet on "rando's house will be set on fire"? Why would they bet on "yes"? You can't present a generic case such as that without going into details about motivations and actual incentives.

Those way worse events also have a lot of extra political motivations behind it. If someone starts a war with the sole intention of winning a bet, there might worser problems than prediction markets.

The third paragraph might as well have been written by a consertive nutcase. Surely, if only you can recognize rights and wrongs, then you can objectively and undeniably prove them to this forum. On its own, it isn't much more than a appeal to tradition.

Re: We haven't seen the worst of what gambling and prediction markets will do

#677

Post by HelloMcFly »

Miraste wrote: post #662
HelloMcFly wrote: post #592

Earlier quoted context omitted.

I believe they are incentivized to discourage insider bets and essentially "rigged" wins. I do not think they will ever be able to control the problem of insiders leveraging guaranteed knowledge to take money for the poor suckers who don't know the game they are playing. Maybe that's too pessimistic, but at this point I don't see how anything but a pessimistic view is warranted.

Rigged wins aren't a real problem. Everyone knows that sports betting apps are rigged, and it doesn't affect them at all. In fact, the latest explosion of customers has been accompanied by even more blatant rigging in the form of unwinnable multi-leg parlays. Hasn't slowed them down.

> Rigged wins aren't a real problem.

Aren't a problem for whom, exactly? I'm not commenting here with concern about the prediction market businesses, founders, or shareholders. I'm concerned for the suckers who are and will continue to be taken advantage of. Forgive me for not abandoning all empathy for those suckers just because they don't realize they're being mugged. These prediction markets are zero-sum, with the connected and resourced taking yet more from those with less.

That's like me complaining about Wall St. tampering with bond ratings on sub-prime mortgages, and you telling me "Don't worry, the banks will be fine." I don't care about the banks, they have enough people looking out for them, and their golden parachutes will catch them on the way down anyway.

Re: We haven't seen the worst of what gambling and prediction markets will do

#678

Post by AnthonyMouse »

NoboruWataya wrote: post #544
AnthonyMouse wrote: post #536

Earlier quoted context omitted.

> This phase is the same thing derivatives markets looked like before the 2008 crisis and Dodd-Frank, and several other waves before that of crisis and reform (Securities Act, Market Reform Act). Just because a rule was created after something bad happened doesn't mean that the rule is effective to prevent it from happening again. The most common result when they try to ban something without removing the incentive fo…

> Notice that you can use the stock market in the same way as a prediction market. After that healthcare CEO got murdered the company's stock took a hit, as anyone could reasonably have predicted it would. That's a perverse incentive in line with betting that someone will kill the CEO. We don't really have a great way of preventing stock trading from creating that incentive, we mostly just rely on the fact that if yo…

> You'd need to short a lot of stock to make that worth the risk of murdering someone (leaving aside any moral issues obviously).

When they know exactly when something is going to happen, buying put options that are cheap because they're slightly out of the money seems like it would be pretty effective.

> I guess viewed in this way a bet on a prediction market is like a very cheap, highly leveraged bet on a specific outcome. So the incentives are much stronger as the potential reward for the risk taken is greater.

You seem to be trying to make this about leverage as if that's a thing that isn't available anywhere else.

Let's try another example. Some group breaks into the systems of some publicly traded company and gets access to everything. Now they're in a position to publicly disclose their trade secrets to competitors, publish internal documents that will cause scandals for the company, vaporize the primary and backup systems at the same time, etc. Anything that allows them to place a bet against the company gives them the incentive to do this; the disincentive is that the thing itself is illegal. Leverage gives them a larger incentive, but there are plenty of wages to place a leveraged bet in the stock market.

Re: We haven't seen the worst of what gambling and prediction markets will do

#679

Post by LeifCarrotson »

MaysonL wrote: post #414
LeifCarrotson wrote: post #369

Earlier quoted context omitted.

That was a Times of Israel reporter Emanuel Fabian [1] but your point stands. Prediction markets create incentives to predict the outcome of an event, which can be done in one of three ways: develop better models to predict the event, affect the event, or affect the reporting on the event. [1] https://www.timesofisrael.com/gamblers-trying-to-win-a-bet-o...

“The best way to predict the future is to invent it.”

That's only for futures that are easy to invent, for others it is way easier to just bribe or threaten a journalist (works on most journalists, YMMV) to say that you've invented it and then run off with the money before anyone can prove you wrong.

Re: We haven't seen the worst of what gambling and prediction markets will do

#680

Post by Miraste »

HelloMcFly wrote: post #677
Miraste wrote: post #662

Earlier quoted context omitted.

Rigged wins aren't a real problem. Everyone knows that sports betting apps are rigged, and it doesn't affect them at all. In fact, the latest explosion of customers has been accompanied by even more blatant rigging in the form of unwinnable multi-leg parlays. Hasn't slowed them down.

> Rigged wins aren't a real problem. Aren't a problem for whom, exactly? I'm not commenting here with concern about the prediction market businesses , founders, or shareholders. I'm concerned for the suckers who are and will continue to be taken advantage of. Forgive me for not abandoning all empathy for those suckers just because they don't realize they're being mugged. These prediction markets are zero-sum, with th…

Aren't a problem for the companies; I was responding to you saying they're incentivized to stop it.

Believe me, I am not on their side. Gambling companies are a financial weapon aimed at the working class and a just society would shut them down. I don't blame you for assuming, though, given where we are.

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