I have been a firm believer in predictions markets since first learning about them over a decade ago (still am). I certainly did not predict this would happen, nor would have I seen it as a plausible outcome had you asked me.
I donât know of anyone else who did either, neither in the for or against camp. The counterarguments were always:
Assassination markets
Insider trading
Something something unduly influencing results of elections
I donât remember seeing any list of counter arguments which included: âwill be optimised to prey on people with weak impulse controlâ.
Yeah Iâve been interested in prediction markets for years (and usually played the âagainstâ role in discussions) and donât think Iâve ever came across a serious sports gambling objection before it seemed inevitable.
To be clear I donât think itâs a major defeater to prediction markets; sports gambling is evil (especially the Current Year implementations with algorithmic optimization of Dark Patterns) but the net contribution of prediction markets to sports gambling success is probably pretty minimal.
I also donât think itâs a defeater for prediction markets in general. However:
the net contribution of prediction markets to sports gambling success is probably pretty minimal.
Iâm actually pretty unsure about this. One issue is that by having CFTC-regulated sports betting
âprediction marketsâ, federal preemption causes sports betting to expand into states that would otherwise prohibit it.
Also, I donât think the right question is âhave prediction markets contributed to the success of sports gambling?â Rather, itâs âhas have the harms from sports gambling on prediction markets outweighed their benefits?â I donât have a strong view on this, but it seems plausible so far.
I think the biggest impact, though, is that now prediction markets are becoming strongly associated with sports betting, in a way that threatens their political viability as a project.
I wonder how much value there would be in a company that principally doesnât engage in sports betting. From my understanding, lots of people that bet on these markets like betting on non-sports claims but just hate the sports market component.
As a (not super confident) non-believer in real-money prediction markets, curious if you have a best steelman link/âpost you like or if you want to tell me why you disagree with me (basically the exact 3 reasons you listed plus some more context)?
seems to me we could get a huge chunk of the benefits with play money markets + the existing binary event contracts the cme already allowed.
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 didnât already have an abundance of well-marketed gambling options and (ii) generally werenât 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 arenât a good hedge for anything.
I have been a firm believer in predictions markets since first learning about them over a decade ago (still am). I certainly did not predict this would happen, nor would have I seen it as a plausible outcome had you asked me.
I donât know of anyone else who did either, neither in the for or against camp. The counterarguments were always:
Assassination markets
Insider trading
Something something unduly influencing results of elections
I donât remember seeing any list of counter arguments which included: âwill be optimised to prey on people with weak impulse controlâ.
Yeah Iâve been interested in prediction markets for years (and usually played the âagainstâ role in discussions) and donât think Iâve ever came across a serious sports gambling objection before it seemed inevitable.
To be clear I donât think itâs a major defeater to prediction markets; sports gambling is evil (especially the Current Year implementations with algorithmic optimization of Dark Patterns) but the net contribution of prediction markets to sports gambling success is probably pretty minimal.
I also donât think itâs a defeater for prediction markets in general. However:
Iâm actually pretty unsure about this. One issue is that by having CFTC-regulated sports betting âprediction marketsâ, federal preemption causes sports betting to expand into states that would otherwise prohibit it.
Also, I donât think the right question is âhave prediction markets contributed to the success of sports gambling?â Rather, itâs âhas have the harms from sports gambling on prediction markets outweighed their benefits?â I donât have a strong view on this, but it seems plausible so far.
I think the biggest impact, though, is that now prediction markets are becoming strongly associated with sports betting, in a way that threatens their political viability as a project.
I wonder how much value there would be in a company that principally doesnât engage in sports betting. From my understanding, lots of people that bet on these markets like betting on non-sports claims but just hate the sports market component.
As a (not super confident) non-believer in real-money prediction markets, curious if you have a best steelman link/âpost you like or if you want to tell me why you disagree with me (basically the exact 3 reasons you listed plus some more context)?
seems to me we could get a huge chunk of the benefits with play money markets + the existing binary event contracts the cme already allowed.
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 didnât already have an abundance of well-marketed gambling options and (ii) generally werenât 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 arenât a good hedge for anything.