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Prediction markets exist to bypass gambling restrictions and monetize insider trading. It isn't a problem, it is their raison d'etre.

gtowey 7mo ago
Jinx!
juleiie 7mo ago
Yeah but someone has to give the money to the insider traders. Betting and insider gambling wouldn’t work if people were educated and just didn’t gamble and so never used these platforms in the first place. It’s an old question of whether government is responsible to protect people from themselves or should we give everyone freedom to go bankrupt in this specific way if they so desire. I don’t know if there is a healthy way to gamble really. With drugs and substances at least there is some continuous spectrum but you either gamble your money or not.
- logicchains 7mo ago
  >I don’t know if there is a healthy way to gamble really. The majority of gamblers keep it within limits, only a small minority lack that control and inevitably end up impoverishing themselves.
  - juleiie 7mo ago
    The majority of people can’t even control their daily screen time, yet we are supposed to believe they can masterfully restrain their urges when money and dopamine are on the line? Nothing I’ve seen indicates human impulse control is that bulletproof. Furthermore, the 'I have it under control' narrative isn't proof of a healthy habit; it’s practically the universal slogan of active addiction.
- somenameforme 7mo ago
  Many, I suspect the overwhelming majority, of the markets are impossible to engage in insider trading in. So it's genuinely just an interesting way to monetize expertise. Chess is a great example. A lot of the money in that market is people turning on the latest chess engines and betting in accordance to position evals, but skilled players can see much more - like how a position that the computer gives as a dead drawn is, in reality, extremely difficult for one side to hold. So the market might give near 50% when it's perhaps more like 65/35. That's quite a large edge. There's also quite a lot of opportunities for arbitrage betting, which is by definition risk free.
somenameforme 7mo ago
Would you not say that somebody could equally cynically describe options trading in this way? Prediction markets are very valuable because they provide information on issues that's generally much more accurate than alternative sources, such as polls. For instance Polymarket predicted 94% of the results for the 2024 election a month out, including the presidential. It can also provide more information than the news. For instance the chances of Khamenei being out as Supreme Leader of Iran by March 31st just skyrocketed up to 78%. That tells me far more than the various news sites minute by minute coverage.
- throwaway5752 7mo ago
  Help me understand the relatively regulatory frameworks around each activity.
ThePowerOfDirge 7mo ago
Gambling = investing. Buying stocks is also gambling. Share buybacks, dividends, fancy words for forking money from workers to some joe schmoe that bought a lottery ticket, i.e., a stock.
- tjwebbnorfolk 7mo ago
  A stock is ownership in a business, same as ownership in a house. It is an asset that you own. When you bet on blackjack or the superbowl, you own nothing and are simply wagering on the outcome of an event. Gambling and equity ownership are not the same.
  - dilyevsky 7mo ago
    There's more to stock trading than just "buy and hold". Not all investing has gambling motivations but it is absolutely used as gambling tool by many
    - tjwebbnorfolk 7mo ago
      You can gamble on literally anything. Stock prices is just one such vehicle.

gtowey 7mo ago

Jinx!

juleiie 7mo ago

Yeah but someone has to give the money to the insider traders. Betting and insider gambling wouldn’t work if people were educated and just didn’t gamble and so never used these platforms in the first place. It’s an old question of whether government is responsible to protect people from themselves or should we give everyone freedom to go bankrupt in this specific way if they so desire. I don’t know if there is a healthy way to gamble really. With drugs and substances at least there is some continuous spectrum but you either gamble your money or not.

logicchains 7mo ago
>I don’t know if there is a healthy way to gamble really. The majority of gamblers keep it within limits, only a small minority lack that control and inevitably end up impoverishing themselves.
- juleiie 7mo ago
  The majority of people can’t even control their daily screen time, yet we are supposed to believe they can masterfully restrain their urges when money and dopamine are on the line? Nothing I’ve seen indicates human impulse control is that bulletproof. Furthermore, the 'I have it under control' narrative isn't proof of a healthy habit; it’s practically the universal slogan of active addiction.
somenameforme 7mo ago
Many, I suspect the overwhelming majority, of the markets are impossible to engage in insider trading in. So it's genuinely just an interesting way to monetize expertise. Chess is a great example. A lot of the money in that market is people turning on the latest chess engines and betting in accordance to position evals, but skilled players can see much more - like how a position that the computer gives as a dead drawn is, in reality, extremely difficult for one side to hold. So the market might give near 50% when it's perhaps more like 65/35. That's quite a large edge. There's also quite a lot of opportunities for arbitrage betting, which is by definition risk free.

somenameforme 7mo ago

Would you not say that somebody could equally cynically describe options trading in this way? Prediction markets are very valuable because they provide information on issues that's generally much more accurate than alternative sources, such as polls. For instance Polymarket predicted 94% of the results for the 2024 election a month out, including the presidential. It can also provide more information than the news. For instance the chances of Khamenei being out as Supreme Leader of Iran by March 31st just skyrocketed up to 78%. That tells me far more than the various news sites minute by minute coverage.

throwaway5752 7mo ago
Help me understand the relatively regulatory frameworks around each activity.

ThePowerOfDirge 7mo ago

Gambling = investing. Buying stocks is also gambling. Share buybacks, dividends, fancy words for forking money from workers to some joe schmoe that bought a lottery ticket, i.e., a stock.

tjwebbnorfolk 7mo ago
A stock is ownership in a business, same as ownership in a house. It is an asset that you own. When you bet on blackjack or the superbowl, you own nothing and are simply wagering on the outcome of an event. Gambling and equity ownership are not the same.
- dilyevsky 7mo ago
  There's more to stock trading than just "buy and hold". Not all investing has gambling motivations but it is absolutely used as gambling tool by many
  - tjwebbnorfolk 7mo ago
    You can gamble on literally anything. Stock prices is just one such vehicle.