Say whatever you want about the merits of prediction markets. But I just don't see a way those benefits outweigh the societal dangers of these constant reminders that people in or close to power can freely profit from their positions in the ways the rest of the population can't. There's always talk about the dangers of disincentivizing job creators, but what happens when a society routinely disincentives job havers in this way? We're just getting a constant barrage of information telling us that if we show up to our job and simply work as we're expected that we're stooges who won't get ahead. You'll need to look for your own individual scheme, ethics be damned, if you just want to keep up with the rest of the population. That's not healthy on an individual level or cumulatively at a societal level.
The current setup does sort of seem like a tax on being stupid. Why would any non-insider participate in these markets? You’re just asking to get screwed.
Though it’s not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green.
Gambling is a hell of a drug and there are good reasons why it is illegal in so many places. Prediction markets have some good externalities (information), but it’s another addictive outlet for those vulnerable to gambling addiction.
I think the bigger risk is changing major decisions (like war) based on the profitability of bets. Forget about drone war doctrine, if you're an adversary just place absurdly large bets which incentivize the opposition to do what you want. (i.e. bet so you "lose" the bet when the enemy changes their posture to gain the profit).
Politics is already full of these pay to play incentives but now anyone with enough cash can influence world events.
The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
Most of the other prediction markets seems rather stupid to me (they are completely detached from any real world activity), other than their prices being a fairly reliable source of information for bystanders.
> You'll need to look for your own individual scheme, ethics be damned.... That's not healthy on an individual level or cumulatively at a societal level.
I was thinking about what you said w/r/t the proximal issue (gambling in prediction markets) and my 1st though was "why is this a big deal? If you're not an insider, just don't participate in these markets ... and then the insiders don't have a counterparty to fleece."
But I thought a little more about and I think you're right. Insider's fleecing others in prediction markets just erodes trust everywhere. And we need a considerable amount of trust in people we don't know for society to function properly.
I don't know the owner at my local hardware store, but I trust that he won't sell me shoddy tools. The same goes for every societal interaction. We need to trust people we don't know. If that gets eroded, we go back a several centuries.
>>You'll need to look for your own individual scheme, ethics be damned
This is remarkably similar to how workers in the Soviet Union got ahead. Your job provided a lot of ways to make money on the side, none of them were beneficial to productivity/trust. I think this kind of reality might just be normal for societies in collapse (also, "gerontocracy")
"Prediction markets" are just scams where insiders trade against suckers. So those who are not insiders should understand that their money will be alleviated by insiders, end of story.
As a foreigner, some view making business with the US as shady in of itself. I usually stand by the US legal system, (which even american citizens might find laughable), but this is by far the most likely reason I would distance myself from doing business.
It helps that some states are bringing criminal charges vs these companies. But it looks like a no contest as to how we'll look back to these kinds of things in 5 years.
Betting on war is war, you may argue that it's an individual's right to participate in war, (I don't think so, I think that it's a war crime for unmarked civilians to participate in war), but funding bellicose action is war.
what you’re describing kind of sounds like the wild west or the settlers frontier or the Industrial Revolution, all things that were actually quite beneficial, however in our current environment where everything has been regulated and captured by corporate lobbied legal machinery it’s much worse to have heavy restriction on the masses with the monied upper class able to grease the wheels, if we’re going to have the freedom we need to boom a healthy economy for everyone we need far more wild west from top to bottom
You'd have to be spectacularly stupid to bet on these kinds of things without having insider knowledge, because you ought to know good and damn well by now that the people with insider knowledge are DEFINITELY betting on them.
There’s a recent Patrick Boyle video which puts it aptly: prediction markets are a wealth transfer from retail investors to trading algorithms and people with security clearances.
Anyway, one thing I don’t understand yet is how new markets are created. They aren’t user generated, so how did an “Iran strike” market exist to begin with?
Prediction Markets require insider trading to function... how do people not know this? It's a setup from day one. If you have the knowledge, you're going to cash in, if you don't have the knowledge, you are throwing your money away.
Without them talking about how much people LOST, this entire article is meaningless. With the advent of 0DTE options which dominate options trading, the fact that the notional number of people who made money makes sense because so many more people have lost money.
I think it’s fair to say the trajectory of all of this leads to bad actors creating the events and making decisions on policy that guarantees outcomes that they have conveniently made bets on. https://www.copingwithfootnotes.com/p/the-commodification-of...
The gamblers are obviously close to top government politicians, either relatives, friends or straw men. The corruption is escalated in levels the US have never seen. It used to be more covered and punishable but now it's happening in front of naked eyes.
It’s all manipulation and everyone knows it but when the voices are coming from inside the house, who’s going to investigate? If anything every tech company in the whole flow is going to support and add custom flows for them - “to get on their good side”
Yet more evidence of the rapid disassembly of the social contract and our collective ethics, aided of course by unregulated tech. If you work for – or are involved in the funding of – these unregulated gambling and insider trading platforms, you should be ashamed of yourself. Your greed and lack of concern for the health of the human world you live in is sickening. You can get bag after bag but it will never fill the void in your soul.
We all know the president and those close to him are making these bets. The question is are lawmakers willing to collectively take action to stop this practice?
Why wouldn’t the platforms require the identity of people cashing out more than, let’s say, $10k a year to be public? Or at least, require KYC level trail to cash out so it can be investigated later.
It protects 99% of people who want to have fun by losing money and prevents insider trading at no virtually no cost.
At some point this kind of insider trading will end up hurting any supposed "integrity" of the markets. This sort of thing is meant to be actively prosecuted, even if that didn't always happen or didn't always succeed.
This is an open kleptocracy now. Nobody will be punished for any of this. Any regulatory authorities have had milquetoast deregulatory sycophants put in charge of them. The powers of those agencies have been consistently eroded by a Supreme Court of radical ideologues.
That same court completely invented presidential immunity out of thin air for the person who appointed 6 of them. That president will continue actively selling pardons. If he's not involved in these trades, he'll sell pardons to those who are. And the president himself is free from any consequences. You might be tempted to say "impeachment". I chortle.
A lot of poeople misunderstand the source of the power of the American dollar. They then go on to say nonsensical things like "trading oil in [other currency] will destroy the petrodollar". No. Oil is traded in dollars because of the demand for dollars, not the other way around. What underpins the strength of the US dollar is the US military.
That US military has been humiliated in Iran and really hasn't won a conflict since 1945 (not countin Grenada). This latest war has alienated current allies. If this continues, I can honestly see people looking for an alternative where whoever controls the currency will actually maintain the integrity of the market by prosecuting this kind of kleptocracy.
I would be careful about attributing all of this to ordinary insider trading. Another plausible explanation is that some activity could come from state linked or intelligence adjacent actors, where the goal is not only profit but also testing or exploiting prediction markets as an auxiliary information channel.
Perhaps these trades are the result of a national security compromise. The current administration has reducing spending on cybersecurity, so perhaps Trump's own phone has been compromised and a foreign country is using the information to profit from the information. Something like this has happened before:
Now of cocourse there are bots circling watching for insider trades. Which you can "milk" by pretending to insider trade and then hedging a bet against them. A whole eco system of scoundrels
Wait until they find out how many people place perfectly timed horse racing bets on the winning horse, JUST before the start of the race. 100% of them knew to back the winning horse
These headlines always irritate me because they use notional value for sensationalism. The 950m notional is if they were paying for a price move of the whole thing from $0 in cash. But these are highly levered futures contracts. And you are getting in and out at 2 price differences that are close to each other.
It’s still shocking corruption and absolutely should be enraging. But that’s because it’s a 10s of millions dollar trade. Not a billion dollar one.
How can I evalutate if this is a real issue for cherry picked. Someone won the lotto last week. They must have had insider knowledge! Oh, no, I forgot to look at all the people who didn't pick a winner.
> Sixteen bets made $100,000 each accurately predicting the timing of the US airstrikes against Iran on 27 February
How many bets and for what ammounts were made for other days, or that it wouldn't happen on the 27th?
It's deeply American how so many of these articles about Kalshi or Polymarket frame the issue as something that can be solved on the American end with the stroke of a pen, especially in a multipolar world where American sanctions increasingly fail.
These markets are global with global demand and many of the insiders are on the receiving end of American foreign policy. If an Iranian with a starlink sees a b-2 spirit fly over their house that information will find its way to somebody who will profit from that knowledge, it's just part of the new information economy.
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Though it’s not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green.
Gambling is a hell of a drug and there are good reasons why it is illegal in so many places. Prediction markets have some good externalities (information), but it’s another addictive outlet for those vulnerable to gambling addiction.
Politics is already full of these pay to play incentives but now anyone with enough cash can influence world events.
Most of the other prediction markets seems rather stupid to me (they are completely detached from any real world activity), other than their prices being a fairly reliable source of information for bystanders.
> You'll need to look for your own individual scheme, ethics be damned.... That's not healthy on an individual level or cumulatively at a societal level.
I was thinking about what you said w/r/t the proximal issue (gambling in prediction markets) and my 1st though was "why is this a big deal? If you're not an insider, just don't participate in these markets ... and then the insiders don't have a counterparty to fleece."
But I thought a little more about and I think you're right. Insider's fleecing others in prediction markets just erodes trust everywhere. And we need a considerable amount of trust in people we don't know for society to function properly.
I don't know the owner at my local hardware store, but I trust that he won't sell me shoddy tools. The same goes for every societal interaction. We need to trust people we don't know. If that gets eroded, we go back a several centuries.
>>You'll need to look for your own individual scheme, ethics be damned
This is remarkably similar to how workers in the Soviet Union got ahead. Your job provided a lot of ways to make money on the side, none of them were beneficial to productivity/trust. I think this kind of reality might just be normal for societies in collapse (also, "gerontocracy")
Go on, I'll wait for those "merits"
It helps that some states are bringing criminal charges vs these companies. But it looks like a no contest as to how we'll look back to these kinds of things in 5 years.
Betting on war is war, you may argue that it's an individual's right to participate in war, (I don't think so, I think that it's a war crime for unmarked civilians to participate in war), but funding bellicose action is war.
> That's not healthy on an individual level or cumulatively at a societal level.
No it isn't. When this sets in, it becomes insidious and distorts the entire system.
Anyway, one thing I don’t understand yet is how new markets are created. They aren’t user generated, so how did an “Iran strike” market exist to begin with?
Because it won't be prosecuted by 2029 but could be afterwards
Personally I think it's a bigger problem when the President sues his own government for billions and then orders them to pay it out
Because -that- is not an official act. It could be prosecuted but no-one will touch it even after 2029
Just one more thing this administration has brought into mainstream.
Traders place $760M bet on falling oil ahead of Hormuz announcement
https://news.ycombinator.com/item?id=47812385
It protects 99% of people who want to have fun by losing money and prevents insider trading at no virtually no cost.
This is an open kleptocracy now. Nobody will be punished for any of this. Any regulatory authorities have had milquetoast deregulatory sycophants put in charge of them. The powers of those agencies have been consistently eroded by a Supreme Court of radical ideologues.
That same court completely invented presidential immunity out of thin air for the person who appointed 6 of them. That president will continue actively selling pardons. If he's not involved in these trades, he'll sell pardons to those who are. And the president himself is free from any consequences. You might be tempted to say "impeachment". I chortle.
A lot of poeople misunderstand the source of the power of the American dollar. They then go on to say nonsensical things like "trading oil in [other currency] will destroy the petrodollar". No. Oil is traded in dollars because of the demand for dollars, not the other way around. What underpins the strength of the US dollar is the US military.
That US military has been humiliated in Iran and really hasn't won a conflict since 1945 (not countin Grenada). This latest war has alienated current allies. If this continues, I can honestly see people looking for an alternative where whoever controls the currency will actually maintain the integrity of the market by prosecuting this kind of kleptocracy.
You need centralized regulation to make it work.
I guess, how many not perfectly timed bets did traders bet on these things?
https://www.theatlantic.com/politics/archive/2025/06/trump-p...
Would be ironic if Iran was getting funding this way.
I predict these will be banned when someone finally uses them as an "assassination market".
Nice insider trading scam you have going. Be a shame if something happened to you.
Then defenetrate them.
They aggressively pursue other leaks, including searching journalists' property.
The result is always a loss of credibility. With time, only the dumbest keep betting.
It’s still shocking corruption and absolutely should be enraging. But that’s because it’s a 10s of millions dollar trade. Not a billion dollar one.
> Sixteen bets made $100,000 each accurately predicting the timing of the US airstrikes against Iran on 27 February
How many bets and for what ammounts were made for other days, or that it wouldn't happen on the 27th?
These markets are global with global demand and many of the insiders are on the receiving end of American foreign policy. If an Iranian with a starlink sees a b-2 spirit fly over their house that information will find its way to somebody who will profit from that knowledge, it's just part of the new information economy.