[HN Gopher] Political betting site PredictIt to shut down after ...
___________________________________________________________________
 
Political betting site PredictIt to shut down after CFTC withdraws
approval
 
Author : akelly
Score  : 115 points
Date   : 2022-08-05 09:47 UTC (13 hours ago)
 
web link (www.predictit.org)
w3m dump (www.predictit.org)
 
| unethical_ban wrote:
| "Get money out of politics"
| 
| also
| 
| "It is a shame that a financial incentive to manpiulate elections
| or to vote for a candidate for any reason except the voter's
| confidence in that candidate got banned"
| 
| I'm not saying I definitely want political bookies banned, but I
| don't immediately see how it is anything but a detriment to
| honest decision making in choosing how to respond to issues.
| Maybe I'll vote to take away some human rights if the election is
| close and I can make a few bucks?
 
  | karlkeefer wrote:
  | Prediction markets have a built-in incentive for accuracy
  | that's absent from broadcast news. It's useful to have an
  | aggregate answer to things like "how likely is Russia to invade
  | Ukraine" that is to some degree shielded from the normal
  | filters of partisanship.
  | 
  | Or from another angle:
  | 
  | Changing your individual vote in an attempt to shift the
  | outcome of an election is extraordinarily unlikely to actually
  | make the difference, so prediction markets most likely punish
  | people (with losses) who try to game it with their own votes.
  | If you and a large group of people plan to do this, that will
  | be priced into the market, preventing you from profiting very
  | much.
 
| AccountAccount1 wrote:
| The gambling angle is straight up dumb, why are they framing it
| that way? Aggregating information (however true) provides a net
| benefit in any endeavor, and there has to be a financial
| incentive to do information arbitrage, that's the whole point,
| because people would not even worry about it.
| 
| The whole thing is that, the media now cannot say that elective x
| has a 65 approval rate (based on a survey of 6 coworkers) when on
| Predictit is at 10%.
 
| caseyross wrote:
| From the official withdrawal letter [1]:
| 
| > [Victoria University] has not operated its market in compliance
| with the terms of [the 2014 letter granting no-action relief].
| 
| Nowhere does the CFTC state exactly what the alleged violations
| where, so we can only speculate. It certainly lends support to
| the hypothesis that the no-action withdrawal is regulatory
| capture by a competing prediction market.
| 
| [1]: (Forced PDF download)
| https://www.cftc.gov/csl/22-08/download
 
| salawat wrote:
| Seems to me they've got things branded incorrectly. Don't make a
| prediction market. Make a PasteIt.
| 
| Think about it, you're trying to get people to process and offer
| up unknown information, right? Focus on that.
| 
| It's bounties for verifiable information. Not predicting, or a
| game of chance. You pay for information to be brought up that you
| would never have thought to look for.
| 
| If you do it that way, you're completely sidestepping the issue
| of providing a gambling primitive. You're just incentivizing data
| collection and dumping. The outcome becomes secondary, the
| context generated maintains primacy, and I wager what markets are
| really interested in is looking at highly accurate predictors and
| trying to infer what channels of information they're privy to in
| order to expand data observation pipelines.
| 
| Unless these "prediction markets" really are just some high brow
| word for gambling parlors. Then again, I always figured that was
| all futures and derivatives trading were, yet there is a staunch
| refusal to classify them as such.
 
  | Georgelemental wrote:
  | In an anonymous pastebin, there is no incentive for you to
  | provide info that is accurate and complete. Prediction markets
  | give you an incentive to find the right answer.
 
| seaourfreed wrote:
| We need prediction markets. It is evil that government kills
| prediction market companies. Prediction markets are needed to OUT
| establishment politicians that are far worse that challengers.
| (For both sides of the partisan spectrum) It is evil that
| government kills prediction market companies.
 
| unholiness wrote:
| Betting on PredictIt has been a side-hobby of mine for the last 5
| years, in which time I turned my fun $10 deposit into (just) over
| $1000. For me, it's a satisfying way of interacting with the
| news, motivating clear-headedness and accuracy over simplicity
| and filter bubbles.
| 
| The talk about "rational markets" in this thread is well-meaning,
| but I think it could better targeted toward BetFair and other
| uncapped foreign markets. PredictIt has a cap of $850 from any
| individual in any market, which means almost no market is
| dominated by "sharps" exploiting differences between prices and
| reality. Sure, PredictIt's prices are often more accurate than
| the average person's guess, but they still exhibit a lot of small
| and predictable biases:
| 
| - "Yes" positions are more popular
| 
| - Pro-Republican positions are more popular
| 
| - Cheap, improbable positions are more popular
| 
| - Positions confirming simple ideas are more popular
| 
| - Positions traders wish were true are more popular
| 
| - Things being discussed on the news are treated as more
| contentious than they are
| 
| Ultimately, almost all of my 100x growth just boiled down to
| finding these biases and maximizing my expected log(return) with
| them in mind.
| 
| I do believe PredictIt was good for discourse. Though it may have
| ultimately affected a small number of views, the "put-up-or-shut-
| up" mentality is much closer to the scientific method than media
| and its tendency to navel-gaze. The domain of PredictIt markets
| was small, but I often imagine a world which creates this kind of
| ecosystem for a broader array of scientific fields.
| 
| For me, though, this is the end of the line. The 2020 races (with
| Georgia runoffs) risk being unresolved by the 2/15 deadline, and
| it's impossible to predict what PredictIt will do then, much less
| if markets will properly price that in. It's been a fun run, and
| I'm glad it lasted as long as it did.
 
  | ummonk wrote:
  | The fees that PredictIt charges also make the market highly
  | mispriced. E.g. you can't arbitrage two markets on PredictIt
  | because PredictIt will take a cut of any profits you make in a
  | particular market, without deducting any losses in other
  | markets.
 
    | unholiness wrote:
    | This is true about arbitraging between markets _on PredictIt_
    | , but I do think the impact of fees on market prices (and on
    | ability to make money on PredictIt) was usually overstated.
    | 
    | PredictIt has two fees: A 10% fee on winnings, and a 5% fee
    | on withdrawals.
    | 
    | The 10% fee on winnings is _only on winnings_. So when buying
    | a share for 90C/, your $1 won will earn 99C/ and pay 1C/ in
    | fees.
    | 
    | This means in a market with multiple candidates, betting "No"
    | on all of N candidates will always earn you $(N - 1) without
    | fees. That's is a winning bet iff all the "No" shares add up
    | to $(N - 1.1111). In practice, the bias toward "Yes" shares
    | alone is strong enough that buying all "No" shares, even at
    | current asking prices, usually cost between $1.07 and $1.10
    | less than $N.
    | 
    | So, if you're only buying "No" shares in markets with
    | multiple outcomes, the prices are set close to a point that
    | entirely negates that 10% fee.
    | 
    | And of course the 5% fee on withdrawals is only on
    | withdrawals. If you send the money straight back into another
    | trade over and over, the fee is diluted enough to be
    | irrelevant to any individual trading decisions.
 
  | renewiltord wrote:
  | Same, though I went $30 to $180 or some such shit and I didn't
  | keep playing because it locks up the money. Concur with
  | everything you're saying. On PredictIt the black swan was over-
  | weighted.
  | 
  | You can take the suckers' money, but you end up still being a
  | sucker because your money is locked up.
  | 
  | What I find amusing is that they have some Plaid-type
  | integration for deposits but withdrawal still needs this
  | routing number / account number shit.
 
| jrm4 wrote:
| Okay crypto people. For better or worse, here's your use case.
 
  | flaque wrote:
  | Here you go: https://polymarket.com
 
| JoshCole wrote:
| I know many people strongly believe in rational market theories.
| For these people this sort of betting site isn't just a betting
| site: it is the mechanism by which they engage in understanding
| politics and their primary means of political discourse. Beyond
| that, it is also an incentive for their own political engagement.
| They have several mathematical models that are strongly
| suggestive that they are right to have this belief.
| 
| From that framing the government should have no authority
| whatsoever to take action against PredictIt: doing so is a
| _gross_ violation of natural rights. To me this seems like an
| error comparable to restricting freedom of religion, detaining
| someone so as to prevent them from voting, or the burning of an
| intellectuals book and the jailing of them so as to prevent the
| spread of their ideas. It seems an abomination.
| 
| What is the justification? Just that there was gambling or is
| there a deeper fundamental problem that I am missing? Gambling to
| me seems more fundamental to reality than breathing. Everyone
| engages in it all the time, but we just don't call it that when
| we think it might be a gambling category which is of benefit to
| society.
| 
| If there is no justification - what paths can be pursued to
| permanently sunder the governments ability to take this sort of
| action in the future? I say all this with no sense of judgement
| for the CFTC; clearly this is within their mandate under
| reasonable interpretations. Rather, I think other mandates - more
| important ones - supersede theirs and should be restricting their
| authority.
 
  | bequanna wrote:
  | The government has no problem with gambling or lotteries. They
  | only have a problem when their percentage of the action isn't
  | big enough.
  | 
  | An alternative theory is that this market was providing
  | information that the current regime is looking to suppress:
  | actual popularity of candidates, policies, etc.
  | 
  | Any speech that violates the official narrative is deemed
  | wrongthink and seems to be fair game for law
  | enforcement/regulators.
 
    | JoshCole wrote:
    | > An alternative theory is that this market was providing
    | information that the current regime is looking to suppress:
    | actual popularity of candidates, policies, etc.
    | 
    | I don't mean to suggest that this is the _intent_.
    | 
    | I'm saying it seems to me that something _worse than that_ is
    | the fundamental consequence of the decision. Banning the
    | mathematically rational discussion of politics is actually a
    | bit more extreme than say murdering and burning the books of
    | intellectuals; in terms of attacking truth it does so on a
    | more fundamental level, it is like banning the use of
    | addition as a method of counting - an attack on the very
    | process by which things are known, not just a person. You
    | aren 't just murdering one person - this kills an entire
    | category of rational agent; it isn't a ban on knowing a
    | particular fact that is inconvenient. It disallows the
    | seeking in a much more general way.
    | 
    | To try and maybe get across the nature of the violation: this
    | seems to me about as bad as the government declaring that the
    | scientific method was no longer allowed to be used or that
    | people were no longer allowed to have faith. For sure methods
    | of arriving at the truth can be very dangerous, but I don't
    | think it follows from that that the government ought to be
    | allowed to prevent their use for that purpose.
    | 
    | So I'm wondering what I'm missing - or whether there is
    | actually an overstep of authority that ought to be reigned
    | in.
 
    | trebbble wrote:
    | > Any speech that violates the official narrative is deemed
    | wrongthink and seems to be fair game for law
    | enforcement/regulators.
    | 
    | I see enough "democrats in disarray" or shitting on the Biden
    | admin (maybe both justifiably! That's irrelevant for this
    | post) from allegedly left-leaning outlets that this seems
    | incredibly unlikely to be true. If it is, they're entirely
    | failing at it. Or have for some reason decided to focus only
    | on minor players while major players, with 100+x the audience
    | (ask around in the real world and see how many people have
    | even heard of PredictIt), carry on as usual.
 
  | evrydayhustling wrote:
  | You could make the same argument about any market. And there is
  | a self-consistent libertarian position that no voluntary
  | economic transactions at all should be limited for this reason.
  | But if you accept any form of regulation, the same arguments
  | apply for regulating any market: historically, many markets
  | have been set up with unfair rules that cheat participants
  | because there is a information imbalance between organizers and
  | participants. The CFTC proactively sets standards of fair play
  | and disclosure to address that gap.
  | 
  | Their letter suggests that they were specifically withdrawing
  | the right of predictt to operate without registration. It seems
  | like the discussion can be advanced by registering.
 
  | JohnHaugeland wrote:
  | "For these people this sort of betting site isn't just a
  | betting site"
  | 
  | just because you choose to assign it some other emotional value
  | doesn't change that the core purpose is illegal
  | 
  | "i'm not burgling, this is how i engage in understanding
  | economics and the primary means of discourse, and the
  | government should have no authority to take action against me"
 
    | JoshCole wrote:
    | Theft isn't people coming together for the purpose of
    | aligning incentives so as to share information with each
    | other while remaining rational. This has far more in common
    | with Truth than it does with Theft. First and foremost,
    | because it was by agreement that they entered into the
    | arrangement - none were forced. Second and also motivating
    | it, because losses are taken in hope: that a better
    | understanding of the underlying conditions is obtained by the
    | whole of the community which is of benefit to even the losing
    | participant.
 
      | JohnHaugeland wrote:
 
        | JoshCole wrote:
        | > The "rational market hypothesis" has nothing to do with
        | the rationality of individual actors.
        | 
        | It sucks that the rationality community started calling
        | themselves that since now people get confused when you
        | talk about the aspirations of empirical skeptic
        | communities trying to act selflessly. Language kind of
        | sucks - even the word selfless doesn't quite capture what
        | I'm trying to say.
        | 
        | It is all to imprecise. Which is why..
        | 
        | > I think you're flying on social media knowledge.
        | 
        | I generally try to think in terms of game theory -
        | especially the equilibrium considerations. I'm very far
        | from the general consensus about what intelligence and
        | rationality are - for example, I don't believe that
        | pejorative cognitive bias and predictable irrationality
        | exist with the strength that some do. I've found studying
        | the sort of machine learning that is not often used in
        | practice because it is computationally intractable to be
        | a better guide to understanding than the inductive
        | approach most people seem to favor.
        | 
        | > This is word salad.
        | 
        | In non-cooperative games selfish play produces
        | information hiding. You play a harder to predict policy
        | because it makes you unexploitable. In cooperative games
        | you can play an easy to predict policy, because it makes
        | you predictable, which allows coordination. I think these
        | correspond with Lies and Truth. Fiction and facts and
        | lies and truth don't seem to be the same thing to me.
        | Obviously, Theft corresponds with selfish strategies, the
        | Lies strategy.
        | 
        | If this still seems like word salad sit awhile with these
        | questions: if there are three doors two labeled A and one
        | labeled B and two agents have to pick a door without
        | communicating with each other which ought they to pick.
        | Now lets say one agent is trying to kill the other agent
        | and this happens if they pick the same door. Which should
        | they pick?
        | 
        | I capitalized the words, not because I didn't know what
        | they mean, but because I have _very precise_ ideas of
        | what I 'm trying to talk about.
        | 
        | > I don't believe you've ever taken an economics class.
        | 
        | I have an intuitive feeling that there _is_ a
        | justification for preventing people from working together
        | so as to better understand things; but your approach isn
        | 't it at all. The rationality community which often
        | promotes the use of prediction markets also happens to be
        | champions of effective altruism. Some of it is probably
        | signaling - the best love is quiet since then it came
        | from the right place - but trying to pretend these people
        | are all comparable to thieves seems too far to me.
        | 
        | It doesn't give me greater confidence in the strength of
        | your argument that you've abandoned it in favor of
        | character attacks. Someone who strongly believed they
        | were right would be courageous enough to try and explain
        | their position with more depth and clarify the terms.
        | 
        | Since it seems to me you want to "win" go with the
        | perverse incentive angle. I've been rolling it around in
        | my mind for a while and while there are aspects to it
        | that seem common to all situations with hidden
        | information I'm definitely not confident enough to
        | disagree with it. You'll get to carry your "victory" over
        | me around as a mark of something. Internet points? I'll
        | even be one of the people who give them to you, because
        | generally when someone asks questions in good faith they
        | rather intended to get answers in good faith. You can try
        | to act like you meant that all along when you implied
        | that the people I was trying to discuss were thieves and
        | I'll be powerless to refute you, because I'm still
        | puzzled by the issues. On the other hand, if you actually
        | have the answers - please share. I'm not claiming
        | knowledge, but ignorance.
 
    | StanislavPetrov wrote:
    | >just because you choose to assign it some other emotional
    | value doesn't change that the core purpose is illegal
    | 
    | The bigger question here is, why is it illegal? Most rational
    | adults understand that the arbitrary decision to ban adults
    | from "gambling" their own money in certain ways, while
    | promoting gambling in other ways is absolutely ridiculous.
    | Here in New York I can today bet on sports and horse racing
    | from my phone or my computer. I am pilloried with ads to play
    | lotto - perhaps the worst form of gambling with only a 50%
    | return on investment in most games - by the state itself! But
    | it is illegal for me to gamble on a skill-based game like
    | poker or predict-it. It reeks of the authoritarian hypocrisy
    | that is the defining feature of our government on every
    | level.
 
      | phpisthebest wrote:
      | Sadly I think in modern society we have shifted from having
      | to justify why something should be illegal, and today for
      | many the default assumption is that all activity should be
      | illegal and one should need to justify the value,
      | subjective "goodness", or utility of an activity, business,
      | device, etc for it is be ruled "legal"
      | 
      | >by the state itself! But it is illegal for me to gamble on
      | a skill-based game like poker or predict-it
      | 
      | I think you have hit on the root cause, poker and other
      | games of skill is harder for the government to inject
      | themselves into it, harder to control the odds and revenue
      | (like lottery), etc.
 
  | swatcoder wrote:
  | You spent a lot of time writing that post and raising
  | questions, but all of the answers are within two clicks of the
  | article.
  | 
  | PredictIt linked to CFTC and CFTC explains their original act
  | and their justification for the withdrawal in extensive detail
  | in documents linked from there.
  | 
  | If you're actually curious and not just trading outrage for
  | upvotes (I assume not), I'd love to see how your impression
  | evolves in light of the actual facts available to you.
 
    | JoshCole wrote:
    | I did read that, but it doesn't address my questions.
    | Actually, it doesn't even begin to answer them.
    | 
    | On one level - you don't even seem to have recognized what I
    | was asking about. I wasn't asking about the justification for
    | this particular decision: you'll note I explicitly mention
    | that this is in the mandate for the organization. So any
    | reading that thinks I'm talking about that is actually just a
    | misreading of my point.
    | 
    | I'm asking if it even make sense to allow the government to
    | prevent discussion of political issues using a mechanism
    | which has some basis in being mathematically rational? It
    | really doesn't seem obvious to me that the government ought
    | to have the power to do so. I'm not asking for the
    | justification _for this decision_. I 'm asking if there is a
    | justification for political oppression of the mathematically
    | minded more generally.
    | 
    | That said - even under the framing that the letter answers
    | the misunderstanding of what I was asking about - I still
    | don't find it to have done so.
    | 
    | The letter is vague with respect to which particular issue
    | they were breaking; it listed the things not which of the
    | things they contested were not the case. The extent to which
    | it is vague is such that even on the linked page PredictIt
    | contends it still has not broken the commitments.
    | 
    | This isn't the extremely specified justification you seem to
    | think it is - at least not to someone who isn't extensively
    | familiar with PredictIt; and apparently given PredictIt
    | didn't acknowledge that it felt it was out of line - it isn't
    | even something that someone with extensive familiarity can
    | easily spot.
 
  | vkou wrote:
  | The reason we have freedom of religion is because when we
  | don't, we get things like holy wars, massacres, and genocides.
  | 
  | It's not because it's some kind of privileged form of
  | understanding the universe. You need to do a lot more work to
  | have your hobby horse hitched to the protections and privileges
  | it receives.
 
  | motohagiography wrote:
  | While I am a fan of prediction markets, I understood the main
  | argument against them is that they create perverse incentives
  | for people to engage in extreme acts to profit from the
  | outcomes.
  | 
  | I wanted to create markets for things like individual airline
  | flight delay insurance, and a futures market for airline
  | tickets, but all of these are regulated as futures with the
  | same barriers to entry that protect stock exchanges, and there
  | are some rules in insurance about not being able to take out
  | insurance on someone elses' property for related reasons. It's
  | a moral hazard. Betting on politics appears to be framed in
  | similar terms, but the counter arguments would be interesting
  | as well.
  | 
  | I gave up on prediction markets years ago, but if there were a
  | darkweb prediction market for smart contract cryptocurrencies,
  | that would be the most subversively interesting thing to become
  | real in a while.
 
    | jjoonathan wrote:
    | > darkweb prediction market
    | 
    | Dammit, I had forgotten about the whole "hire a hitman while
    | pretending to just make predictions" thing. It probably isn't
    | just a spooky theory anymore :/
 
    | theptip wrote:
    | > I understood the main argument against them is that they
    | create perverse incentives for people to engage in extreme
    | acts to profit from the outcomes.
    | 
    | Is that the line of reasoning CFTC is using though?
    | 
    | > if there were a darkweb prediction market
    | 
    | I think this is Polymarket / Gnosis right? Or are you looking
    | for something more obfuscated?
 
    | inglor_cz wrote:
    | "they create perverse incentives for people to engage in
    | extreme acts to profit from the outcomes"
    | 
    | So does the very existence of the media, which will amplify
    | any sufficiently gross act of violence to the global
    | auditorium that would otherwise never hear of it, rewarding
    | the culprit with their 15 minutes of fame and possibly
    | inspiring others to do the same.
    | 
    | That isn't a reason to censor journalists, though.
 
| ramesh31 wrote:
| They were definitely operating in an extreme legal grey area.
| Without a doubt it's straight up gambling. Yet they issue you a
| normal 1099 at the end of the year. It felt really weird having
| to claim a "political consulting" business on my taxes instead of
| just claiming it as gambling income with a W-2G. Not sure how
| they were ever legally able to operate in the US honestly.
 
  | dustyleary wrote:
  | > Without a doubt it's straight up gambling
  | 
  | Not "without a doubt".
  | 
  | Gambling means a game of chance/luck. Court cases over poker,
  | regardless of which way the decision goes, hinge on whether the
  | Court is convinced that poker is a game of skill, rather than
  | luck.
  | 
  | Predictit definitely did not want to issue W-2G, because that
  | is for gambling income, and their position is of course that
  | their platform is not an illegal gambling service.
  | 
  | I think that it's pretty easy to argue that consistently
  | winning money on a prediction market is a matter of skill. Just
  | like consistently earning money on the stock market.
  | 
  | Of course, both _can_ be used for gambling.
  | 
  | So if prediction markets are not allowed, why are day trading
  | or stock futures allowed? A casual read of a few relevant
  | subreddits will show that there are a lot of people "straight
  | up gambling" with financial markets.
  | 
  | It's a real shame that prediction markets aren't allowed to
  | operate in the US. Markets (of any sort) are incredibly useful.
  | 
  | Disallowing them because you can use them for gambling is
  | throwing the baby out with the bath water.
 
    | tialaramex wrote:
    | In my country gambling is legal but regulated. And so you
    | can, indeed, bet on political outcomes, subject to certain
    | rules. Just go to a web site, prove you're eligible, deposit
    | money, gamble.
    | 
    | Now, I don't gamble, but in December 2020 I was able to use
    | that platform to "bet" that Donald Trump had lost the US
    | presidential election he lost the previous month. I "won" a
    | bunch of money. Because lunatics had decided facts aren't
    | true, we can just make up whatever we want, and it took a few
    | weeks for that to get knocked down and meanwhile you could
    | just bet against these morons.
    | 
    | As to financial instruments: For a bunch of the instruments
    | you are actually buying something, and these are clearly just
    | fine. If you buy Oil futures or Pork futures that actually
    | literally deliver oil (or pork) and you're holding them when
    | they come due, you're getting oil (or pork). This is probably
    | not what you wanted, but that's what those instruments do,
    | the people who were _supposed_ to be buying them want oil, or
    | pork, and so they 're happy, too bad for you.
    | 
    | I agree that some derivative instruments might just be
    | gambling, these instruments are also too risky and poorly
    | understood, so if you say we should ban those with gambling I
    | don't see why not. Again, gambling is legal in my country,
    | and so are these derivatives, but the Americans can choose
    | different, as they have on many things.
 
      | ramesh31 wrote:
      | > Now, I don't gamble, but in December 2020 I was able to
      | use that platform to "bet" that Donald Trump had lost the
      | US presidential election he lost the previous month. I
      | "won" a bunch of money. Because lunatics had decided facts
      | aren't true, we can just make up whatever we want, and it
      | took a few weeks for that to get knocked down and meanwhile
      | you could just bet against these morons.
      | 
      | Yep. Betting on politics in 2020 was as close to free money
      | as you'll ever see. On _election night_ , the odds for
      | Texas flipping blue were 70/30. Literally free money.
 
    | User23 wrote:
    | > Gambling means a game of chance/luck. Court cases over
    | poker, regardless of which way the decision goes, hinge on
    | whether the Court is convinced that poker is a game of skill,
    | rather than luck.
    | 
    | I think it really just has to have an element of uncertainty.
    | For example one can gamble on chess tournaments. I suppose
    | one can broadly construe an element of "luck" if Magnus
    | somehow botches a game, but it strikes me as something quite
    | different from whether or not one's lottery numbers come up.
    | 
    | As you say, poker is the archetypical example of a skill game
    | with an element of chance. Backgammon is another good
    | example. I would say darts is another example that falls
    | further on the skill end.
    | 
    | > So if prediction markets are not allowed, why are day
    | trading or stock futures allowed?
    | 
    | As noted in another comment on this submission, it appears
    | one can greatly increase the chances of regulators approving
    | an activity by having former regulators on staff. Needless to
    | say traditional finance companies enthusiastically hire those
    | people.
 
    | kube-system wrote:
    | Prediction markets for sports is reported on a W2-G, and
    | skilled people can consistently make gains doing sports
    | betting.
    | 
    | Stocks are different because they are assets. You get
    | something for your money.
 
      | jkqwzsoo wrote:
      | Prediction markets (i.e., cash-settled futures) for
      | interest rates, FX rates, volatility, financial index
      | values, etc., on the other hand, don't require W2-Gs and
      | are even tax advantaged.
 
| usgroup wrote:
| This has happened many times before. Why do governments close
| prediction markets? What sort of problems do they cause?
 
| akelly wrote:
| This is a huge blow to political discourse. PredictIt has been
| operating since 2014 with the approval of the CFTC as the largest
| election betting platform in the US. Today they received notice
| from the CFTC instructing them to cease operations by February
| 15th without clear justification for the decision.
| 
| One year ago, YC backed betting market Kalshi launched with CFTC
| approval. They employ a former commissioner of the CFTC as Chief
| Regulatory Officer, and two weeks ago applied for CFTC approval
| to have election markets. And half a year ago, the popular
| unapproved blockchain betting market Polymarket was fined and
| shut down in the US by the CFTC.
| 
| Further reading:
| 
| https://twitter.com/NathanpmYoung/status/1555387422510264321
| 
| https://www.cftc.gov/csl/22-08/download
| 
| https://astralcodexten.substack.com/p/the-passage-of-polymar...
 
  | jdmoreira wrote:
  | I also have strong suspicions this is related to Kalshi somehow
 
  | belorn wrote:
  | In term of political discourse it is/was a good source to
  | verify the validity of some of the more up voted stuff on HN.
  | One top comment a few years ago predicted that the US would
  | abolish election and be a monarchy by 2020. An other that there
  | would be a full scale nuclear third world war in 2019. There
  | were one saying that the US would enter a new civil war by
  | 2021. In each case I checked betting sites to see if such views
  | held enough popular support, but alas I could not find any to
  | bet against.
  | 
  | If people who hold conspiracy theories put down money and lost,
  | maybe that would do more to change how people think than any
  | political debate ever could.
 
    | pessimizer wrote:
    | As far as I can tell from hanging out on Predictit for years,
    | it's actually pretty shit at predicting things. That some
    | event isn't something that you can gamble on, or that a
    | particular outcome of an event isn't an option until five
    | minutes before it actually happens, doesn't tell you
    | anything.
    | 
    | > If people who hold conspiracy theories put down money and
    | lost
    | 
    | If people who say that the government claim on X is true had
    | to put money behind it, we'd see a massive wealth transfer
    | from smirking status quo guys to little groups of conspiracy
    | theorists. Half the time (like for example the missile strike
    | on that family of saints as we left Afghanistan), the
    | government line has been disproved before the press release
    | even gets out; easy money.
    | 
    | edit: if anything, Predictit acts as a summary of current
    | media coverage/sentiment.
 
      | bombcar wrote:
      | > edit: if anything, Predictit acts as a summary of current
      | media coverage/sentiment.
      | 
      | This is exactly it; you have some small percentage of
      | people "putting their money where their mouth is" but most
      | of it is people trying to second guess and game everyone
      | else (you could reliably make money trading shares on the
      | news cycle, for example).
 
    | r00fus wrote:
    | Problem with your idea (which is conceptually valid) is that
    | you can buy and sell on Predictit well before the closure of
    | the "market/event". So many people who agreed with a
    | politician or idea (that some event would happen) would still
    | sell early (at 90c/1$) because they could use those funds in
    | other markets.
    | 
    | Worse still - you have people who would pump & dump the
    | market - pushing the contra position (Trump wins 2020) and
    | post comments showing showing holdings supporting contra, and
    | then dump after it gains a significant share. I've heard of
    | some predictit users doing this same operation 5x or more on
    | a single market (an iconic example: Iowa Dem Primary 2020).
    | 
    | So it's all speculation.
 
| frellus wrote:
| I don't understand why they can't just make them trades based on
| future political actors. Feels like that's what the futures
| market is in general - risk betting.
 
| robbrown451 wrote:
| I wonder if some sort of cryptocoin/blockchain alternative could
| be created, that would be harder to shut down.
| 
| It would probably have to be based on having an elected council
| (with an odd number of members) signing off on the outcome of a
| market. If people see a bias in their history (which of course
| should be public), they will factor that into their bids,
| hopefully discouraging people from getting on the council to make
| money on their own bids.
| 
| And of course the council should be elected with some kind of
| ranked-choice/condorcet so you tend to elect centrists rather
| than extremists.
 
| Bostonian wrote:
| This is terrible. I wish things would go in the opposite
| direction, with the CFTC allowing futures exchanges such as the
| CME to trade presidential party election futures.
 
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