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Effort to prevent government officials from engaging in prediction markets
- stopbulying 7mo ago> Following multiple public reports on the growing influence of prediction markets and their potential for corruption, Merkley and Klobuchar introduced the End Prediction Market Corruption Act — a new bill to ban the President, Vice President, Members of Congress, and other public officials from trading event contracts. The bill will ensure that federal elected officials maintain their oath of office to serve the people by preventing them from trading on information that they gained through their role.
- aurareturn 7mo agoIt makes sense to ban government officials from betting. It's hard enough to enforce insider trading. With legal betting, it's literally impossible. Another worrying issue with betting is just how prevalent the last election was in betting markets. In elections won by thousands or even just hundreds of votes, betting markets can skew results where betters vote for someone just purely for the bet and persuade, shill for the person they bet on. I can imagine betters placing a bet on a candidate and then launching a defamation campaign against the other.
- gosub100 7mo agoOr campaigns could hedge their risk by buying the other guy. They either win the election or get all their expenses refunded.
- stopbulying 7mo agoThat's like "South Park" S01E10 (1998); Damien (South Park) - Wikipedia https://en.wikipedia.org/wiki/Damien_(South_Park) https://en.wikipedia.org/wiki/Damien_(South_Park) : > The majority of South Park's residents bet on Satan to win the match due to his enormous size and muscular physique, but Satan ultimately throws the fight and reveals he bet on Jesus, thus winning everybody's money.
- stopbulying 7mo ago> They either win the election or get all their expenses refunded. How would that work with something like the WH Press Secretary who has refused to give back some $350K in campaign donations (though currently FEC can't prosecute any campaign finance violations because they don't have a quorum because Trump has not nominated and confirmed enough FEC commissioners.)
- gosub100 7mo agoI think trump has identified the inefficacy of our supposed checks and balances. In school, we were taught that the 3 branches of government protect against a rogue leader, which is obviously not true. After he is removed or ends his term, I hope the weaknesses in the system are fixed. Yeah I hate him, but the system was supposed to protect us from this outcome.
- stopbulying 7mo ago"David Letterman Was DISGUSTED When Trump Showed His True Character" in re: to promoting professional boxing and boxers: https://youtube.com/watch?v=E9MB4CUraGc https://youtube.com/watch?v=E9MB4CUraGc : > As soon as he gets out, he's going to fight in my casinos
- stopbulying 7mo ago> With legal betting, it's literally impossible. Murphy v. National Collegiate Athletic Association https://en.wikipedia.org/wiki/Murphy_v._National_Collegiate_Athletic_Association https://en.wikipedia.org/wiki/Murphy_v._National_Collegiate_... : > State of New Jersey, represented by Governor [Chris Christie], sought to have the Professional and Amateur Sports Protection Act (PASPA) overturned to allow state-sponsored sports betting. How does Murphy v. National Collegiate Athletic Association affect or affirm states' rights on cannabis regulation and legalization? Wasn't Christie against Medicalization and Legalization? IMO it's less fun to see scared gamblers at sporting events. A quote from the film "Two for the Money": "See, most gamblers, when they go to gamble, they go to win. When we go to gamble, we go to lose."
- themafia 7mo ago> you have the perfect recipe to undermine the public’s belief that government officials are working for the public good The public already does not believe this. Less than 25% approve of your work. > This legislation strengthens the Commodity Futures Trading Commission’s ability to go after bad actors And this is designed to "increase trust?"
- staplung 7mo agoUnfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.
- treetalker 7mo agoDon't forget relatives, useful idiots, and billionaire special envoys!
- 9dev 7mo agoThe latter two groups often overlap, even
- lukev 7mo agoIf we're not going to ban prediction markets, we could at least make it a requirement that all bets are public and associated with a real identity. That'd go a long way towards curbing the corruption of these things, while preserving (or even greatly enhancing) their "predictive power."
- ronsor 7mo agoIf we can't ban them from trading stocks, good luck with this.
- pear01 7mo agoDon't be needlessly cynical. This is a good effort. So is the ban on stock trading. This administration is such that it is bringing corruption to the fore in a way not seen in generations. Things are always hard to pass at the start. Keep pushing and this administration will create a massive opportunity to swing the pendulum if we can (as hard as it is now) retain some optimism.
- matthewfcarlson 7mo agoTo the people downvoting you, you just said the administration is bringing corruption into the public view. Some people believe they are exposing and some believe they are currently doing it. Either way, corruption and profiting off of a political position is certainly top of mind for many Americans atm.
- pear01 7mo agoAh interesting thanks for pointing out the ambiguity in my statement. I definitely did not intend that ambiguity but you also rightly point out it sort of works either way. I would think this would lead to more upvotes than downvotes but perhaps a trend of cynicism also is reflected in assuming the least favorable interpretation. Thanks for pointing that out. For the record, I meant the latter. Let the downvotes commence!
- ddtaylor 7mo agoBlindly trying things without taking signals from outcomes of the past seems like madness. If you have evidence you have failed at walking many times, should you be putting your energy and efforts into running and jumping instead of continuing to pursue walking?
- pear01 7mo ago
- tokai 7mo agoIt wouldn't be a problem if the law was actually applied to prediction markets. If crime is de facto already legal, more laws seems like the least of ones worries.
- sapphirebreeze 7mo ago[dead]
- Steinmark 7mo ago[flagged]
- ikiris 7mo agoAll of these things were managed by the SEC before it was defanged. You don't need 47 laws, you just have to enforce the basic behavior ones. We don't. Nothing else will fix this.
- literatepeople 7mo agoThis is a bot account
- idle_zealot 7mo agoWhat's the HN policy on LLM-generated comments and linked content? There's so much of it on the front page and in threads that I feel increasingly like I'm in a crowd of machines chasing karma points rather than seeing what people think or care about. Is the engagement also botted? Or can people just not tell? Or do they not care and reply to the obvious robot anyway?
- tomhow 7mo agoDownvote it, flag it and if you want to be super-helpful, email us about it (hn@ycombinator.com). We want HN to be free of generated articles and comments, and will kill such submissions/comments and ban accounts that do it repeatedly. We also ask commenters not to make accusations in the discussion threads, because it's off topic. Please just flag generated content and email us if you really want to.
- literatepeople 7mo agogotcha, apologies for my comment! will do in the future, appreciate the response
- ferfumarma 7mo agoIs there anything we can do to make it better?
- romaaeterna 7mo ago> A Mystery Trader Made $400,000 Betting on Maduro’s Downfall > Prediction market trader 'Magamyman' made $553,000 on death of Iran's supreme leader
- soared 7mo agoYou can review that user’s trade history. It’s a bit weird for sure, but they didn’t just stop in to bet on those. They’ve bet huge sums on every prediction relating to Iran, Israel, sp500, recessions, etc. They’ve been betting for 2 years but only recently starting profiting a lot. https://polymarket.com/profile/%40Magamyman https://polymarket.com/profile/%40Magamyman
- plantain 7mo agoIf they're smart they'll have multiple accounts with bets each way netting to ~0 on all kinds of topics, and just omit the losing trade on the information they actually have.
- schnebbau 7mo agoThe answer is simple - you price in the chance that an insider could have an edge on you when making your prediction. It's all part of the game.
- wizzwizz4 7mo agoWe also care about the world outside the prediction markets. If decision-makers have an incentive to "throw the match" by making surprising decisions, that will impair the decision-making, which will affect the rest of us. Likewise, sufficiently-wealthy actors will be able to manipulate the behaviour of officials by betting against the behaviour they want to see, much like an assassination market.
- Terr_ 7mo ago> manipulate the behaviour of officials by betting against Right, it becomes regular bribery with middleman and a funny hat. "I didn't pay the judge to dismiss the case against me, I just hedged by betting I'd be convicted and he just happened to be betting I'd go free, and now my money is coincidentally in his pocket.
- idle_zealot 7mo agoOr, and I beg you to consider this radical position: we arrest people who break the law (insider trading is illegal) and those who knowingly help them to do so (the operators of the prediction markets). How quickly we accept the death of even the ideal of rule of law in favor of embracing a return to an explicit rule by might, fuck-you-got-mine mentality.
- GaryBluto 7mo agoIt doesn't break the law.
- idle_zealot 7mo agoFrom Wikipedia[0] because I can't be bothered to read more than a few paragraphs: > In 1909, well before the Securities Exchange Act was passed, the United States Supreme Court ruled that a corporate director who bought that company's stock when he knew the stock's price was about to increase committed fraud by buying but not disclosing his inside information. Based on anti-fraud common law alone the court decided it was illegal for an insider to trade stocks with non-public information. An explicit law would be nice, but a reasonable interpretation of basic law would see most of our ruling class behind bars. This is only highly-contested and technical because we've let our standards slip so far. 0: https://en.wikipedia.org/wiki/Insider_trading https://en.wikipedia.org/wiki/Insider_trading
- jpmoral 7mo agoAren't there already basic laws against officials profiting from their role?
- trinsic2 7mo agoHow is any of this going to get passed without enforcement of anti-trust and an end to citizen united?
- int32_64 7mo agoThe prediction market trend will "work itself out". It will become common knowledge that these platforms are exploited by insiders so people "trust" apparent flagged insider bets, so people will try to piggyback insiders, then it will be revealed that a sophisticated party with infinitely deep pockets burns massive amounts of cash to manipulate odds and these piggybackers will be burned badly, so in the end classical gambling and sports betting will resume as preferred ways for gamblers to lose money because of their disgust with the manipulation.
- guidedlight 7mo agoI agree. The market is flawed because there isn’t a guaranteed entropy. Because of this, the prediction market will remain niche.
- CamperBob2 7mo agoEven in the presence of insiders, these markets may still function well as hedges.
- bee_rider 7mo agoPrediction markets do seem basically corrupting. So yeah, maybe the winning move for society is to just not regulate them at all so they just become obvious “cheaters only” leagues.
- nitwit005 7mo agoPeople give plenty of money to mobsters who are running illegal gambling operations (This used to be common in the US). Unsurprisingly, those mobsters cheat people, but they keep doing it.
- ChrisArchitect 7mo agoRelated: War Prediction Markets Are a National-Security Threat https://www.theatlantic.com/technology/2026/03/polymarket-insider-trading-going-get-people-killed/686283/ https://www.theatlantic.com/technology/2026/03/polymarket-in... (https://news.ycombinator.com/item?id=47291036 https://news.ycombinator.com/item?id=47291036)
- nomilk 7mo agoI recall a few finance papers saying (paraphrasing) "approximately all private info is reflected in stock prices". The same is obviously true of prediction markets. If government officials are banned, they'll just give a little wink to a relative or friend, and the prediction markets will reflect the private information. On a personal note, I find these markets incredibly useful in day to day life. There's been a joke for a while that putting site:reddit.com in your google search is the only way to get (some) real information. It's becoming true that putting <search terms> AND (kalshi OR polymarket) is how to get accurate info.
- mvkel 7mo agoAccurate info on what? Most markets have almost no liquidity, outside of sports and crypto
- zaik 7mo agoElections usually also have good liquidity.
- nomilk 7mo agoPolitical outcomes is the biggest. Businesses (and individuals) can be strongly (financially) affected by who's elected. I'd been very curious in the past about political outcomes but had never used prediction markets, so I built a little tracker that inputed the probabilities based on scraping ~14 betting sites. I had to do it on a market-by-market basis, and there were lots of edgecases. Having them all in one place (or two; kalshi and polymarket) makes life much simpler. Prediction markets have also directly affected my travel planning, helping me avoid a country that wasn't at war at the time but had (in my judgement) a too-high risk of war. You're completely right about thinly traded markets; those are way, way less accurate. But they also offer the greatest opportunity for someone to bet the other way, which has the effect of 'correcting' the market.
- BSVogler 7mo agohttps://en.wikipedia.org/wiki/Efficient-market_hypothesis https://en.wikipedia.org/wiki/Efficient-market_hypothesis
- fkarg 7mo agoDoes this include the stock market?
- dogmayor 7mo agoPrediction markets and crypto will continue to ride the wave while this administration is in office. But I expect prediction markets will come to be thought of as slimy gambling dens ridden with fraud no different than crypto. The cancerous "greed is good/gamble on everything" attitude prevalent today in America will come crashing down at some point. When? Who knows. The sooner the better. But for now, make sure you get in your bets er i mean predictions on this mega important market: "Elon Musk # tweets March 3 - March 10, 2026?"[1] [1] https://polymarket.com/event/elon-musk-of-tweets-march-3-march-10#CLRYZHM4 https://polymarket.com/event/elon-musk-of-tweets-march-3-mar...
- baq 7mo agothis is important from an operational security perspective and hence will probably pass. if they cared about actual insider trading they'd close that gap years ago.
- ting0 7mo agoPrediction markets should just be globally illegal. Nothing good can come from them. Public identity is not a solution, proxies would be used.
- jmye 7mo ago> Prediction markets should just be globally illegal. 100%. But you’ll get yelled at by the “freedom to do literally anything I want, no matter how detrimental to everyone else it is” crowd.
- avaer 7mo agoInsider trading has been a staple of making money in US politics for a long time, it's just more transparent now. I don't believe a targeted ban on participating in prediction markets would do much to weed out corruption while "predictions" hide behind government officials pumping memecoins, buying stocks, using proxies, or simply sharing war plans over messaging apps. The floodgates are already open, prediction markets are just the most honest and obvious version of the corruption. This approach to legislation is an interesting contrast to the CCP's supposed 2.3 million people prosecuted for corruption, if you believe Wikipedia [1]. [1] https://en.wikipedia.org/wiki/Anti-corruption_campaign_under_Xi_Jinping https://en.wikipedia.org/wiki/Anti-corruption_campaign_under...
- genxy 7mo agoNot just insider info. Folks in the government can make those things happen, making the payout for super rare events even higher and more catastrophic. It is obvious how prediction markets could be used to put blind hits out on people.
- yieldcrv 7mo agothat’s kind of the point, everyone is just cooperating right now unless you are a head of state it’s what the crypto anarchist paper Assassination Markets described in the 90s freaked the FBI out at the time, I think that guy just got out of prison for “unrelated” reasons
- genxy 7mo agoThat was an interesting read on Jim Bell. https://www.motherjones.com/politics/2026/03/at-largest-ice-detention-camp-staff-bet-on-detainee-suicides-ap-reports/ https://www.motherjones.com/politics/2026/03/at-largest-ice-... > Staff at the nation’s largest Immigration and Customs Enforcement detention facility have placed bets on which detainee will be the next to die by suicide, according to new reporting from the Associated Press based on 911 calls and detainee accounts. > Owen Ramsingh, a legal permanent resident who spent several weeks at the Camp East Montana detention facility in Texas, told AP that he overheard a security guard talking about a betting pool for which detainee would next die by suicide. The guard said he had paid $500 into the pot, which would all go to the winner with the most accurate predictions on detainees harming themselves.
- brucehoult 7mo agoMaking insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets. Read the original papers on them. http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf http://li.mit.edu/Stuff/CNSE/Paper/Hanson90.pdf https://www.jstor.org/stable/3216893 https://www.jstor.org/stable/3216893 https://mason.gmu.edu/~rhanson/insiderbet.pdf https://mason.gmu.edu/~rhanson/insiderbet.pdf
- derektank 7mo agoTrue experts need not be the people with the ultimate ability to effect change. Professional sports organizations ban their players from betting on games because it creates bad incentives to throw a winnable game. Banning elected representatives from gambling on prediction markets doesn’t make it impossible for insider information to surface, but it does prevent the governance equivalent of match fixing.
- TarasBob 7mo agoEXACTLY! We want insiders to participate in prediction markets and profit!
- yieldcrv 7mo agoprofit is the participation incentive
- Retr0id 7mo agoIt might've been the original purpose but in practice prediction markets have turned into a tool for gambling. It also creates weird incentives. If I want to pay a politician to do something, bribing them would generally be illegal. But what if I instead bet lots of money that they won't do it?
- yieldcrv 7mo ago> a tool for gambling they require liquidity from people that are not in the know for adequate price discovery and exit liquidity worthwhile for participation
- brewdad 7mo agoAll this focus on some insiders who made thousands on betting markets to distract from those who made billions on Wall Street or the oil markets this week. Both should face consequences but only one will.
- li-ch 7mo agoHow about stopping politicians from engaging in stock markets first.
- bagacrap 7mo agoCan't individuals just avoid participating, knowing that there's always someone who knows more than you?
- alex_young 7mo agoWhy do “prediction” markets benefit from bets over nominal sums? Isn’t the power of them based on the wisdom of crowds? Wouldn’t capping bets at say $1 be better than trying to hunt down cheaters? Seems like they actually are less predictive if you can get more votes with larger amounts of money.
- stratos123 7mo agoIf the bets on a prediction market are capped, then even if you have a better-than-average prediction (for example, if are an expert on the topic the prediction market is about), you can't bet any more than a layman. So a prediction market with capped bets will always be less accurate. Or taking a longer timeframe: if you think you are a great forecaster but aren't, and are very stubborn, with capped bets you might get to keep trading forever. With uncapped bets you lose all your money and can't trade anymore, leaving the markets to the people who are better than you at forecasting.
- JumpCrisscross 7mo agoAnyone in the financial industry is required to report their brokerage accounts to their employer. Elected officials, servants of the public, should be required to make public their trades in public securities and on prediction markets. Public servants, elected or not, should have to disclose this to their relevant inspector general. (Yes, I know. We fired them.)
- totony 7mo agoHaving to put this much effort everytime a new technology comes out is so unproductive. How about have standards for elected officials not to abuse their power? Maybe have an ethics comittee or something? In academia, there's not a rule for every situation; ethics comittee handle this
- speedylight 7mo agoPredictions markets need to be outlawed, no exceptions, just erased from existence.
- sharp_runner_84 7mo agoThe interesting side effect of officials being banned is it reduces liquidity on geopolitical contracts, which makes the remaining prices less informative. Right now on Kalshi, some policy contracts have so little depth that a single 5k order can move the price 10+ cents. That thinness already makes the prices unreliable as forecasts — banning one of the most informed participant classes just makes it worse.
- SergeAx 7mo agoI think every sane person today should abstain from insider trading markets (stop calling them "prediction markets", BTW). If you are not an insider, you are a sucker - someone who will definitely lose out to insiders' gains.