I can understand that prediction markets trending towards sports gambling was overlooked by the sort of people who (i) were arguing about the creation of new markets for stuff that didn’t already have an abundance of well-marketed gambling options and (ii) generally weren’t personally interested in betting on sports.
But lack of debate at the time about preying on people with weak impulse control surprises me, given that prediction markets are by design zero-sum games (like binary options trades, which have long been dominated by boiler room outfits preying on people with weak impulse control, and are regulated equivalently to sports gambling in many jurisdictions) rather than trades between entities with different liquidity needs or risk tolerance. Even if (or especially if) some of the market participants are superforecasters whose data-driven approach makes their assessments worth paying attention to, they still need punters to win money off and most bets offered simply aren’t a good hedge for anything.
I can understand that prediction markets trending towards sports gambling was overlooked by the sort of people who (i) were arguing about the creation of new markets for stuff that didn’t already have an abundance of well-marketed gambling options and (ii) generally weren’t personally interested in betting on sports.
But lack of debate at the time about preying on people with weak impulse control surprises me, given that prediction markets are by design zero-sum games (like binary options trades, which have long been dominated by boiler room outfits preying on people with weak impulse control, and are regulated equivalently to sports gambling in many jurisdictions) rather than trades between entities with different liquidity needs or risk tolerance. Even if (or especially if) some of the market participants are superforecasters whose data-driven approach makes their assessments worth paying attention to, they still need punters to win money off and most bets offered simply aren’t a good hedge for anything.