Comment by hydroflame7
1 day ago
'Predictions' market is the silliest loophole for gambling. Honestly, more surprised Fanduel, DraftKings and the like who have spent millions on lobbying and buying licenses, are not fighting tooth and nail on this.
1 day ago
'Predictions' market is the silliest loophole for gambling. Honestly, more surprised Fanduel, DraftKings and the like who have spent millions on lobbying and buying licenses, are not fighting tooth and nail on this.
If I made a platform like that, I'd be RICO'd after the FBI kicked down my door and confiscated everything I own.
If I had the connections Polymarket does, well, then we can just place bets on when people will die, everything will work out just fine and the President will invest in me.
If you don't mind not having US customers, it's easy enough to get an online gambling license in a few jurisdictions, maybe $20-50k all in (Nevis and Anjouan are a couple of the more notable ones), at which point you can serve a large portion of the world. This was basically the scenario polymarket was in for awhile until they started making inroads into US regulatory apparatus.
Wasn't there a crypto betting platform that was operating outside of the US, blocked US traffic and the US still went after them?
I don't remember any specifics, or if I'm remembering anything right at all, but I feel like I read something about that.
Especially when the "prediction" part isn't even part of the product, it is an accidental byproduct. No one pays for access to the predictions.
And they aren't predictions, they are more like "outcome-shaping" markets, since the more liquidity that gets dumped on a particular outcome, the more motivation there is to tamper with the real-world outcome, and at a certain point it will just always happen if it is billions of dollars.
The higher the liquidity involved, the less likely the real world outcome ends up being the same as it would have been if the prediction market had never existed. Very messy.
> the more liquidity that gets dumped on a particular outcome, the more motivation there is to tamper with the real-world outcome
This only works if there are enough people betting on the other side. It's not some kind of magical money multiplication machine. As more stuff like the one-day Iran bet or the 64:56 minute press conference happen, people will avoid taking bets on highly specific outcomes.
On more reasonable bets like "war with Iran in the next 6 months", if there is some kind of shadowy cabal putting billions of dollars on the yes side, they just aren't going to have much upside if there isn't the same amount on the no side.
Those predictions are just market data, market data is often very expensive (my data usage at work is probably about $100k a year and i'm not even a trader), I imagine polymarket will be too when they are more established.
Traders sometimes go to prison for insider trading. The wisdom of the crowd human when the crowd is following someone with insider information is deemed legal.
Happens already. Selling market data is part of how they finance themselves.
>Those predictions are just market data,
Any kind of fraud is just market data when you pay enough for it.
Give one example.
And there is a kid’s legal version! They sell them in Walmart - Pokémon packs. I don’t know how any of this is legal in a civilized country.
I have mixed feelings being a parent now. It can be fun to get a mystery box or pack. But it does feed on the anticipation and rush of surprise. Kids seem to lack the self control to stop. Video games seem the worst to me since they're so intangible it's easier to get carried away before others notice.
I feel so guilty about how often I begged my parents for new magic, Star Wars ccg, or battletech booster packs.
1 reply →
LEGO does it too, with "mystery minifigure" packages.
I watch kids squeezing the polybags trying to find an identifying bump or edge, hoping to either get the one they want, or at least not get one they already have.
And yeah, baseball cards are/were no different, going back decades.
But at least the financial loss here is constrained to a few dollars. I don't think these are the gateway drugs to gambling problems, but they are definitely exploitative.
Kids version has been around my entire life (baseball cards) it even used to come with bubblegum!
It was like sweetened emulsified chalk.
I kind of miss it.
Don't forget the other children's gambling trainers:
https://duckduckgo.com/?t=ffab&q=claw+machine&ia=images&iax=...
The average kid at these places thinks they're a skill-based game, so they aren't gambling any more than they are when they shoot hoops.
I believe they are (maybe indirectly on some though): https://www.actionnetwork.com/education/tracking-prediction-...
They totally are tho. And at the same time trying to win via the loophole if it doesn't close by launching their own efforts
I prefer prediction markets to gambling because the platform isn't the bookmaker. This reduces the adverse selection of players. For instance, if you actually win regularly on these platforms they'll actually ban you, much like a casino. My understanding of prediction markets is that it's pure market making which is preferable
In theory this should limit the damage insiders can do, since as the probability of encountering an insider rises the market makers will need to widen the spread.
> I prefer prediction markets to gambling because the platform isn't the bookmaker.
Just because you prefer poker to slots, that doesn't suddenly mean that poker isn't gambling.
Slots have odds which change throughout the day and are usually (on average) pretty bad. In Poker, you play against other players, not the house. There is a rake which is very minor when compared against the average returns against other players.
They are fundamentally different. In slots, you bet against the house, in poker you bet against other players. So slots are gambling in the traditional sense. Poker however is no different than buying a house. There is still a house fee in both cases and in both cases you are betting against other people. And in poker, new players can enter and inject capital just like the housing market. You going to ban buying houses next? You can't eliminate risk from life.
You are basically trying out outlaw luck and randomness at this point.
1 reply →
poker and slots are two very different variants of gambling. Sure, there is plenty of chance/variance in poker but there is an undeniable skill component that is lacking in slots.
2 replies →
Where did I say it wasn't gambling. I said prediction markets are preferable to sports books like DraftKings. I don't like either personally but its an important distinction
Except there is still adverse selection, just like there is in the stock market. People who have inside information are going to bet more, and you will take the other side of that bet not realizing that has happened.
Actually I believe DraftKings just added a prediction market...
Actually, prediction markets are closer to stock markets (insofar as you consider stock trading to be gambling). Insider trading is the bigger issue
Insider trading does not (and should not) apply to prediction markets.
When gambling companies make markets on Oscars, for example, they make those markets knowing 100% that people who know the outcome will bet on it. It is inherent to the product, they put protections in place. Equally, with some sports markets (i.e. transfers), they put in place protections to identify activity that IS a legal breach of player's agreements with sports leagues.
But on prediction markets, there is inherent insider knowledge and people should have the sense not to trade on markets where you are trading with insiders. It should be obvious. Financial markets are different, they are supposed to be open. Prediction markets are not.
There has been a strong drive to apply the concept of insider trading. In the UK, people were actually charged under a law intended to protect bookmakers...to be clear, this is happening whilst people close to central bankers and Treasury civil servants are being paid 7 figure sums to leak information, and all the stuff that happens with transfer/TV show markets. As ever, it is only when politics appears that these rules get invented (and to be very clear, politics markets have always had insider action too...it is inherent to the market, bookmakers know this, they did not ask for these people to be charged).
Btw, the Gambling Act has also been used to prevent payments to gamblers who exploited casinos that failed to ensure their games were fair. If you told the people saying "insider trading" that there was a law whose only purpose was to protect casino's margins, they wouldn't lose their mind...these same laws are being used to prevent "insider trading".
I've heard people say this but it really only makes sense if you don't think about it for more than 10 or 20 seconds.
Prediction markets by definition always resolve to one side being completely wiped out and losing everything. Stocks going to zero happens pretty seldomly, in prediction markets it's guaranteed to happen every single time.
Prediction markets are not binary options. They are closer to a liquid equity option market (and most equity option markets aren't liquid at all). That means you can trade into and out of positions at any time and for different prices depending on where the market is. You can even do time spreads where you can't lose it all no matter what happens. Maybe your 10 or 20 seconds of thinking wasn't as perfect as you think since you don't seem to understand how prediction markets actually work.
That's only true if you leave your money in...which you don't have to do.
You can play prediction markets by betting on a swing. E.g. I made a few hundred dollars betting on Harris in 2024 when Trump was at ~65% odds and then selling before the election when it was closer to 50%.
9 replies →
So options markets then?
Prediction markets are nothing like stock markets. Maybe they are more like binary options markets. In the UK for example, these were for a long time regulated as a gambling product, and for the past 7 years have been banned to retail consumers.
Kalshi has Trump Jr on its board and is federally regulated. I'm not sure FanDuel and DraftKings will win that fight for the next 3 years.
[flagged]
I thought the “daily fantasy” loophole was pretty silly too.
Both have a prediction market product.
It truly is insane.
The CFTC is granting "no-action" exemptions on the basis of....nothing, really.
The "educational" value of these markets.
On the basis of nothing, or on the basis of gifts and connections?
the Kalshi legal team is a revolving door with the CFTC