Comment by margalabargala
4 hours ago
As someone generally against gambling, I think there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.
The issue of bribing/threatening a sports player to throw a game has existed for over a century. It's not a new problem. The only thing special about Polymarket is the expansion of surface area.
My preferred solution would be to just ban it all, or if you really want to allow sports betting only allow betting on the outcome of events happening in the venue one is physically in.
The existence of sports betting absolutely encourages people to throw matches and the existence of X betting absolutely encourages people to try to make X come about.
Strong regulation and legal consequences could potentially fix this. We don't see tons of people shorting a company and then bombing that company's HQ.
At least with sports betting it's limited in scope. Polymarket applies the same warping influence to the whole of politics and daily life. That's the biggest problem and difference to me, yes it sucks if teams are throwing or players are altering their play to make or break bets but ultimately the effect/danger of that incentive is limited. And with the more limited and well enumerated pool of potential insiders places like the league can pretty easily monitor for it while on Polymarket it's down to open source monitoring and a little blip on their TOS that's nearly impossible to enforce.
> Strong regulation and legal consequences could potentially fix this.
There are regulations. E.g., in the US, 17 CFR § 40.11 prohibits contracts on "terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law" [0]. The problem is that those responsible for enforcing those regulations are currently uninterested in doing so [1].
[0] https://www.law.cornell.edu/cfr/text/17/40.11
[1] https://www.cftc.gov/PressRoom/PressReleases/9183-26
Yeah, regulations are only as strong as the consequences given those who break them.
If people can threaten journalists for money and get away with it, they will. If people who threaten journalists over money are sent to prison, then after a brief transition period it will mostly stop.
It's braindead easy to anonymously threaten people on the internet. It's getting easier to steal identities or create new ones out of whole cloth and cypto wallets means you can't functionally know where the money comes from. I'm not sure attempting to punish people you can't realistically identify can be considered an effective strategy.
Punishing a corporate entity however is much easier.
If it becomes commonplace for existing prediction markets to get undermined by this kind of manipulation, won't that just be an opportunity for people to create better prediction markets that are less vulnerable to manipulation?
And doesn't that just mean more resources and energy is going into solving the problem of determining the truth of past events (and, as a result given that these are prediction markets, the likelihood of future ones?)
And isn't that a good thing?
If those prediction markets are patronised by people who want to manipulate it, what drives customers to the new ones?
Making it less vulnerable to manipulation would entail exposing less information too. You probably wouldn't be allowed to know the current odds, which makes gambling the same as reading tea leaves.
> there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.
not fundamentally different as in "live or die" you mean? the whole point of sports is that you compete whilst appreciating each others' humanity.
I honestly don't know what your point is. The best I can come up with is:
"The whole point of sports (in my opinion) is X good thing therefore betting on sports is more acceptable"
Making bets on good things doesn't make the betting better. Just because Polymarket would allow you to bet money that the infant homicide rate goes down next year, doesn't mean it's a good thing to allow betting on.
His point is pretty simple. Sports don't inherently involve life or death, the whole point is that it's a competition that "respects each other's humanity", eg not a competition to the death.
The same can't be said for war (bombings), which Polymarket allows betting on.
Seems like a fundamental difference to me.
... if I post a multi-paragraph long reply on the incentives created by betting on less infant homicide, am I going to find out that you understand perfectly well what the incentives are, and that was the entire point of your comment?
2 replies →
Banning it sends it underground into the hands of organised crime, which will still have access to modern technology.
There's going to be a net loss, but it's probably better to regulate it than have another war on drugs.
We can ban online betting and betting advertising though. If you want to bet on ponies go to a racetrack. No apps, no phones.
This is only true if people's want for it exceeds their want to not break the law.
For illegal drugs, people who want them want them a lot, so them being illegal isn't a strong deterrent; although, legalization has still absolutely increased the number of users (i.e. legality was acting as an effective deterrent for some.)
For illegal gambling, sure _some_ people won't be deterred by legality, but most people aren't hardcore gambling addicts; they're just engaging as a form of "harmless fun." They're not looking to go to jail to toss $20 on a sports game.
As someone who at first embraced the idea of prediction markets and is now ambivalent, sending them underground vastly reduces their harm. First, because discoverability is an issue. Second, there will be much less liquidity. Third, any gains will have to be laundered or hidden, making it even more difficult.
Maybe prediction markets are net positives, or maybe regulating them will make them so, but banning them does resolve most of their negative effects.
Maybe we dedicate specific buildings to gambling, so it's legal, regulated, and localized. Call it a "casino".
It was only a few years ago that sports betting was significantly more heavily regulated and limited, and stuff like Polymarket didn't exist (just non-monetary forecasting sites like Metaculus.) Even if there was more demand for "underground gambling" before these changes, the net negative to society was still significantly less.
We should definitely ban advertising it.
> I think there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.
> Strong regulation and legal consequences...
Functionally, you are correct.
But the crux of the issue is Polymarket and Kalshi (YC W19) have successfully argued that they are technically a platform that is democratizing "futures", and thus falls under the CFTC - not gambling.
Nothing will be done to change this. YCombinator (who owns HN) [0] and Sequoia have built a fairly well oiled lobbying muscle with the CFTC and with both the GOP and DNC to maintain this status quo.
It's the same reason both Ro Khanna and Ron DeSantis went to (metaphorically) kiss David Sack's ring back in 2023 at the same donor event XD.
[0] - https://www.politico.com/news/2024/05/30/little-tech-startup...
Which is of course a blatant abuse of our legal system, since they are doing nothing different than a casino's roulette or blackjack tables.
"Red futures pay out at 2:1!"
"Get your future here on whether the dealer's cards are higher than your own!"