Comment by TZubiri
6 hours ago
I can give you a concrete example
In chess, it's part of the rules that you cannot use a chess engine, a tournament may have a prize money, to enter into a tournament you agree to some clauses like following the rules of chess and not using an engine. It's a contract.
If someone were to use an engine, they would be cheating, and in this context it would be breach of contract, and possibly fraud.
It would be wrong to assume that because using computer programs in this competitive sport, it is therefore wrong to use it in more critical applications, like war, or health or construction. The core reason being because they are by nature very different events with different contracts that are entered into willingly and are controlled by very different laws, but also independent of laws, they are very different phenomenons and will of course have different moral and practical impacts. (Duh)
Ok but what difference between, say, sport bets and “prediction market” is significant enough to allow people who can directly influence the result bet on it, but only in “prediction markets”?
I think the misconception here is that there is someone or some law "allowing people" to do things. It's of course the inverse, people by default can do whatever they want. What laws or contracts you may find actually "forbid people" from doing something.
I think you are right in that often (but not always), it's fraud (which isn't the same as being ilegal, it could be a breach of contract or fiduciary duty) for someone who is working for a purpose, to sabotage it for another purpose for some additional gain. But the rule being broken is contract law, not criminal law, in this case.
Sometimes other laws would have to be broken to manipulate the events, like in the case of democratic elections, or wars. It's just that these are higher order laws and not contracts between parties.
It's entirely possible for an event to be manipulated where a party doesn't really break a rule or law or contract to win at it, like elon musk tweeting more than 500 times.
Furthermore it's worth noting that this doesn't have much bearing on the legality of the market itself, one thing is for manipulation to be illegal or fraud or somehow penalized, the other is the market itself being illegal.
I hope I have helped a little bit, I'm not sure what your legal training is, I'm not a lawyer, but since you are talking about 'allowing people' I analyzed this from a legal perspective based on the knowledge I have.