'America Is Slow-Walking Into a Polymarket Disaster' (theatlantic.com) 55
In an opinion piece for The Atlantic, senior editor Saahil Desai argues that media outlets are increasingly treating prediction markets like Polymarket and Kalshi as legitimate signals of reality. The risk, as Desai warns, is a future where news coverage amplifies manipulable betting odds and turns politics, geopolitics, and even tragedy into speculative gambling theater. Here's an excerpt from the report: [...] The problem is that prediction markets are ushering in a world in which news becomes as much about gambling as about the event itself. This kind of thing has already happened to sports, where the language of "parlays" and "covering the spread" has infiltrated every inch of commentary. ESPN partners with DraftKings to bring its odds to SportsCenter and Monday Night Football; CBS Sports has a betting vertical; FanDuel runs its own streaming network. But the stakes of Greenland's future are more consequential than the NFL playoffs.
The more that prediction markets are treated like news, especially heading into another election, the more every dip and swing in the odds may end up wildly misleading people about what might happen, or influencing what happens in the real world. Yet it's unclear whether these sites are meaningful predictors of anything. After the Golden Globes, Polymarket CEO Shayne Coplan excitedly posted that his site had correctly predicted 26 of 28 winners, which seems impressive -- but Hollywood awards shows are generally predictable. One recent study found that Polymarket's forecasts in the weeks before the 2024 election were not much better than chance.
These markets are also manipulable. In 2012, one bettor on the now-defunct prediction market Intrade placed a series of huge wagers on Mitt Romney in the two weeks preceding the election, generating a betting line indicative of a tight race. The bettor did not seem motivated by financial gain, according to two researchers who examined the trades. "More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout," they wrote. The trader lost at least $4 million but might have shaped media attention of the race for less than the price of a prime-time ad, they concluded. [...]
The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolas Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money. [...] As Tarek Mansour, Kalshi's CEO, has said, his long-term goal is to "financialize everything and create a tradable asset out of any difference in opinion." (Kalshi means "everything" in Arabic.) What could go wrong? As one viral post on X recently put it, "Got a buddy who is praying for world war 3 so he can win $390 on Polymarket." It's a joke. I think.
The more that prediction markets are treated like news, especially heading into another election, the more every dip and swing in the odds may end up wildly misleading people about what might happen, or influencing what happens in the real world. Yet it's unclear whether these sites are meaningful predictors of anything. After the Golden Globes, Polymarket CEO Shayne Coplan excitedly posted that his site had correctly predicted 26 of 28 winners, which seems impressive -- but Hollywood awards shows are generally predictable. One recent study found that Polymarket's forecasts in the weeks before the 2024 election were not much better than chance.
These markets are also manipulable. In 2012, one bettor on the now-defunct prediction market Intrade placed a series of huge wagers on Mitt Romney in the two weeks preceding the election, generating a betting line indicative of a tight race. The bettor did not seem motivated by financial gain, according to two researchers who examined the trades. "More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout," they wrote. The trader lost at least $4 million but might have shaped media attention of the race for less than the price of a prime-time ad, they concluded. [...]
The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolas Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money. [...] As Tarek Mansour, Kalshi's CEO, has said, his long-term goal is to "financialize everything and create a tradable asset out of any difference in opinion." (Kalshi means "everything" in Arabic.) What could go wrong? As one viral post on X recently put it, "Got a buddy who is praying for world war 3 so he can win $390 on Polymarket." It's a joke. I think.
"shredding whatever shared trust we still had" (Score:5, Interesting)
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Re:"shredding whatever shared trust we still had" (Score:5, Insightful)
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That's just you projecting.
Who cares? (Score:2, Insightful)
especially heading into another election
I don't vote based on popularity, social pressure or what some gambling market predicts. That some people do is one reason why this is NOT a democracy. It's a democratically elected republic.
It's a sad commentary on the electorate when they can be influenced in their choices even when they are casting secret ballots and no one will know how they voted. And it has little to do with recently developed prediction markets. The press and biased polling organizations have been manipulating the weak little minds
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I don't think it is that people go the ballot box wanting to 'vote for the winner' or 'support the under dog' etc.
It is more a function of if they vote at all. If you think your guy/gal does not stand a chance maybe you just stay home. Similarly if you think they got it in the bag maybe you don't bother to show up.
I doubt this is as impactful as it used to be though, given early voting and mail in voting. I still believe both of those things actually undermine the democratic process and encourage lazy vot
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I don't think it is that people go the ballot box wanting to 'vote for the winner' or 'support the under dog' etc.
But that's exactly how ranked choice voting is sold to the public. "Your first choice didn't win. But don't feel too badly, because you still got to put a check mark next to the winner." Which doesn't really matter in the grand scheme of things. But it keeps the plebiscite soothed. And docile when some screwball third or fourth place candidate wins, because the election observers got tossed out just before those suitcases of ballots were pulled out from under the table.
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Wow, you've completely missed the point of ranked choice voting. It's not to make the voter feel good about having been able to vote for the ultimate winner. That's absolutely backwards. It's so we can elect a politician more in line with the desires of the voters.
Super simplistic example: Say you have two major candidates, Lion and Gazelle. A majority of the voters, 60%, would happily vote for Lion. But a third candidate, Tiger, is also running. Tiger is a lot like Lion, but has a few interesting new ide
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In America, we solve that problem in a different way. We have Primaries.
This allows the big cat people can decide which big cat they want to run against the herbivore. Then we all can decide which is the preferred choice in the main election: team herbivore or team carnivore.
Go TEAM! (yes... this is a problem too, but it is a different problem than the one you allude to.)
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Primaries help but they aren't a complete solution. First, primary results can be overridden by the party leadership. It's best to think of primaries as a non-binding poll of the electorate. This alone makes primaries a pretty unreliable way to filter candidates.
Second, some states allow voting in either party's primary; there's no declaration of party affiliation and no check to make sure you're a member of the party whose ballot you're marking. So if your own party's nomination is pretty much settled,
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We don't do ranked choice voting in America.
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The definition of republic is "not monarchy". It can be a democracy, it can be an oligarchy, it can be a tyranny.
What you probably mean is "representative democracy".
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It cannot be an oligarchy because republic also implies some equality between members, as it is defined as power resting with the people and their elected representatives and there not being a monarch.
And since we know that America has in fact always operated as an oligarchy, it's therefore not actually a republic, it's just dressed up as one to trick the rubes.
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Nope, it is defined just as not a monarchy. Originally, of course, res publica was simply the Latin equivalent of the Greek demokratia, but that has been millennia ago. Even a dictatorship can be a republic nowadays.
Basically, the UK is democratic, but not a republic, Russia is a republic, but not democratic, Germany is both, Saudi Arabia is neither.
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Nope, it is defined just as not a monarchy
Whose definition are you considering to be authoritative?
Public opinion (Score:4, Insightful)
The articles I've seen have used Polymarket as a signal of public opinion. That's probably useful for predicting who wins an awards show, but if you equate that with "reality" in total, the resulting befuddlement is on you.
Unrelated, but if you pay any money into these sites, you're basically inviting someone to insider-trade your money away from you. It's like walking into a casino where all the dice are funny and the decks are marked.
Re: Public opinion (Score:5, Insightful)
The problem is a market exchange that is pliable to manipulation is by definition a strong predictor of its market movements.
If its purely 'stock markets', its all fun and games until the speculative assets infect the core economy. If you have any memory if 2008 that should be a concern, and that was a "could have gone terribly worse" scenario.
Polymarket brings speculation and feedback loops with consequences far out of the financial world. The risk of insider trading reaping "undeserved riches" is real, but the non-financial consequences of reckless insider trading influencing IRL policies is even greater.
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Re:Public opinion (Score:5, Informative)
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The problem is that if the house has the slot machines loose enough, and the Three Card Monty, that a lot of people start braying about their gains, it will start attracting people. Then one quietly adjusts the odds in their favor, and people will keep playing and playing because all their friends came out wealthy.
Sort of like cryptocurrency where if you were in the pre-mining group or initial mining group, it was worth it. Everyone else is financing your wins.
Gambling (Score:5, Insightful)
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That degenerate with the recently broken knees? Market player.
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You can try and add as many layers of obfuscation as you like, but it is still just gambling. Everything you just described is an element of or factor in gambling. Overestimating the viability of a libertarian candidate? Chasing an inside straight.
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Hold on a sec, that is suspicious. Never mind.
All gambling is a "prediction market". Renaming things doesn't make them something else. I think we are in general agreement again.
Complete nonsense (Score:3, Interesting)
There is well established theory that posits that prediction markets are more accurate than the most accurate expert (who is basing their opinion on publicly available information). It has been empirically validated numerous times, and you can do this yourself, that these markets are very accurate.
If this were not the case, it would be trivial for said expert to simply buy low / sell high based on the mispricing, and effectively make money for free, which moves the price towards the correct price. They would continue to do this until the mispricing was less than the trading cost. This especially applies if someone tries to manipulate the price of something obviously worth a different price.
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"There is well established theory that posits that prediction markets are more accurate than the most accurate expert (who is basing their opinion on publicly available information). It has been empirically validated numerous times, and you can do this yourself, that these markets are very accurate."
This is almost the perfect example of magical thinking. I don't know just how you are using the word theory in that sentence, but its almost certainly not the scientific usage. If it was you would need to show t
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It's very easy to demonstrate from a thought experiment.
Suppose there was an expert who could better price prediction markets than the market itself. This expert would simply trade the market accordingly and get rich quick, in doing so moving the market towards the price he/she believed were fair. This expert would grow their money exponentially and quickly, eventually trading with huge influence on the market price due to their large pot of money they accumulated. The market price would now incorporate the
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I'm buying “No” at $0.99 (Score:2)
Brexit vote and the market (Score:4, Informative)
Banks actually took this as legitimate market data, over the actual polling, and set up their positions accordingly. Everything was in place for a Remain vote, hugely axed towards it. So when the result came through...financial chaos. All because they took spread betting data as a legitimate signal over the actual controlled polls, which never supported a huge axe in either direction.
Be very careful as to the weightings placed on data.
America is slow-walking into all disasters (Score:5, Interesting)
That it can walk into. Well, some disasters it is walking into faster.
I wonder whether the Republicans will manage to assist in removing the demented child rapist. Might be far better for their chances to get elected again in the next 20 years. Although the amount of irreversible damage is pretty impressive by now.
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I think the Republicans are counting on there never being another election, or if there is one last one, it will be fully manipulated.
That raises the question of whether those Republicans who have already announced they will not be seeking re-election either
a) Aren't in on it
b) Are in on it but think it will fail
c) Are in on it but discovered the last vestiges of their spine
But I have no particular opinions on that except that MTG is in the a) group both because she doesn't play the game as instructed relia
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Maybe. But this may well end in a civil war. And, quite frankly, to do a coup like this like in some "shithole" 3rd world country, the US "administration" would need the military firmly on its side. My assessment would be that the joke of a wannabe "Secretary of War" has made sure that is not going to happen. There is probably no military person left with any respect for him.
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the US "administration" would need the military firmly on its side
The military has a long history of doing terrible things when they are told to. It doesn't seem that there is any trouble finding soldiers happy to do crimes. Bonus Army, Kent State...
Get in line bub (Score:3)
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Toss it behind the student loan defaults, the real estate bubble, the AI bubble, the ad bubble, the cryptocurrency bubble, and other stuff.
IMHO, this stuff is just sports betting. The student loan mass defaults that are coming up will make make people forget this existed.
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Forgot us treasury bond market cratering. EU investment groups are already starting to step back from us treasuries.
https://www.businessinsider.co... [businessinsider.com]
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Be careful about those feedback loops... (Score:3)
The risk, as Desai warns, is a future where news coverage amplifies manipulable betting odds and turns politics, geopolitics, and even tragedy into speculative gambling theater
We'd be fools to think that the "speculative gambling theater" won't in turn significantly affect "politics, geopolitics, and even tragedy". Some of this will happen casually: what the gambling markets say will influence - subtly or not - political and business decisions. And some of it will happen on purpose.
As the stakes become high enough, political and business outcomes will inevitably be rigged the way a fight or a horse race might. Of course this already happens; now, it will happen more frequently. Also, there will be more instances of those not directly involved in said politics or business trying to affect the outcomes merely in order to win a bet. In addition to voting blocks, betting blocks may also become significant political forces.
Odds != Predictions (Score:2)
Gambling odds determinations have nothing to do with predictions of winners or losers. Instead, they have everything to do with how the "house" can balance bets against each other to maximize their profit, usually via the "juice." That's why betting odds change over time, and vary from "house to house."
Prediction markets like Polymarket are public sentiment only, so far as I can tell. True "predictors" are rarely any more accurate the the Magic 8-Ball.
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