“Prediction markets” (Kalshi, etc) being a euphemism for “online casino”. In their advertising “trade” is a euphemism for “bet”.
It seems to me that any gambling forum that allows bets on activities where the outcome is easily manipulated or known to insiders, is doomed. Two well-known cases in point: somebody made money betting that Maduro would be out of office … because he was in on the military planning. The guy who operates Trump’s teleprompter placed a bet on what words would be in his last speech.
A lesser-known example: months before the finale of the last season of Survivor, the eventual winner was the overwhelming favorite on Kalshi.
It seems that if everyone realizes that the fix is in, no one will be willing to participate.
I’d say anytime you can make money off gambling/trading the temptation to cheat is going to be there. So that’s inherent. Whether people actually do or not, or how much, will depend on the laws against and how strongly they are enforced.
I mean, still a risky trade. Partially kidding, I do get your point. Hopefully we know of these examples because they were investigated/consequences to doing it. It’s a new market, people are going to test what they can and can’t get away with.
Given the amount of gambling/trading that Kalshi and others are doing, so far only a few corrupt traders have be uncovered, although there may be lots of others who will never be caught. I for one have no interest in online gambling, however if someone chooses to waste their money on such a “rigged” system, that’s their decision to make, and nobody else’s.
I think that I read that a tiny percentage of people in these markets win almost all the money, so that’s evidence they are flawed.
I can’t imagine how the sites, let alone the government, could enforce any rules. Once cheaters learn to keep their bets down below some threshold they’ll never be caught.
I guess this thing is for people who think crypto-currencies are blue-chip investments.
But, in this case, the fix really is in, not just a house advantage. Apparently, you can bet on practically anything, even make your own things for people to bet on. You can bet on whether some medicine will be approved, and there are tons of insiders and FDA officials that could easily make money off of that bet, and no regulatory oversight like there is for insider trading on stocks.
If I could find a market, I could create a bet on whether I will make a typo in my next sentence. But, its to small of a market to create that kind of bet. But, insiders with knowledge of big happenings can do it all day long.
There’s an old saying that if you’re sitting in on a poker game and you don’t know who the sucker is at the table, it’s you.
This seems even truer in prediction markets. Some of the people betting have inside information on the outcomes they are betting on. If you’re not one of those people with inside information, you’re one of the people whose money they’ll be taking.
Donald Trump’s social media company has discussed charging Wall Street traders and investment firms as much as $100,000 a month for faster access to the U.S. president’s posts on his Truth Social platform, according to people familiar with the matter.
Trump Media & Technology Group which owns Truth Social, has in recent weeks also pitched a discounted plan of $60,000 per month if the firms sign up for a three-year plan, the sources said, requesting anonymity as the discussions are confidential.
Shoot, there’s regulatory oversight for Nevada casinos (the Nevada Gaming Commission), (contrary to what Babale implies, above). Prediction markets are less regulated than Vegas.
Yep, pretty much this. The main story on John Oliver’s show a few months ago was about prediction markets, and one of the findings was that most of the money was made by a very small group of insiders. Also, the guys that run these companies all seem to be disreputable scumbags.
Vegas is heavily regulated. My takeaway was Babale was getting at that everyone knows you’re going to lose at gambling in Vegas / they manipulate the outcome in their favor, yet people still gamble even when it’s well known “the fix is in”. It’s fun.
re: accuracy of predicting future events. Seems like a pretty good way to do it. Insider info is a great way to know what is going to happen in the future. It’s an interesting market that could even be manipulated to make someone think an event will occur (when it will not) or to get them to do something else. It’s kind of wild. With that said, if no one really believes the prediction market is that accurate, then there’s really not a big corruption problem / it’s not that accurate even with insider info.
It’s just a semantic difference between “fix” and “edge”. The 1919 World Series was fixed. A completely honest roulette wheel provides the house with 2% edge. Big difference.
Yeah. In prediction markets, some of the participants are like the roulette spinner if they could also choose what space the little ball will land in.
OK, first of all, there were at least two typos . Second, this is the problem – if the bet is “will X politician say certain words in the speech tonight” and I am the speech writer and can bet on the content of the speech I’m writing…
They know theoretically that the odds are against them, but are sure that variations will be for them.
My brother was a gambler, and went to Vegas often. He never played anything but poker, and preferred to play people who lost in poker tournaments, since they wanted revenge and were selected as bad players.
The number of “trades” on future unknowns is overwhelmingly more than the known ones. This form of gambling is not doomed and never will be.
They may at some point limit bets where the outcome is known and by this I mean actually known. Having insider information about a public companies gives you a big edge but it is not a guarantee that the stock will move in a completely known way. A company might have a great result and announce on the same day as a major market crash for example. The winner of an Oscar or a reality show will be known by a lot of people.
I asked a similar question on a Kalshi subreddit. They told me that I was being ridiculous because the insiders would never give out that information because it would cost them their jobs and in some cases would be illegal and besides there was a chance that they would be incorrect.
tl:dr: They are inherently corrupt but not fatally so.
. Second, this is the problem – if the bet is “will X politician say certain words in the speech tonight” and I am the speech writer and can bet on the content of the speech I’m writing…