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Discussion (116 Comments)Read Original on HackerNews
How many crypto people (with legitimate backgrounds just like the founders of Polymarket and Kalshi) stood up and said big things about freedom and the unbanked etc., turns out they were literally just scamming people- there are so many examples besides FTX.
Letting people bet on any random thing is not at all related to this "price everything" theory. If that was their real goal they wouldn't behave so much like a normal sports betting company. I have yet to actually hear anyone defend their actual actions in a plausible way.
In other words, prediction markets require suckers to lose money to insiders in order for the public to learn new information. In this case, people lost over a million dollars to an insider so the public could learn that "d4vd" was searched a lot.
Is this good?
I would imagine that in theory, everyone thinks they have the best information at the time, something like:
House: "Odds that X happens? We'll put $1 on both sides to get it started. 50/50."
Someone comes along: "Oh dang, I'm definitely more than 50% confident that X is happening. Let me put $1 in." Now it's 67:33.
Someone else comes along: "Oh I'm more than 67% confident X is happening, let me put $1 in." Now it's 75:25.
And of course, you get people going: "I'm more than 25% confident that X is _not_ happening, let me put $1 in!" And now it's 60:40.
The murky part, I would imagine, comes when the odds and the payout actually act as something that influences the outcome, but in perfect theory-land, if everything goes as planned, this should move the odds to the most informationally-accurate measurement, which should, in theory, benefit observers by making this measurement public.
And the people they're both making money from, are people who think they have enough expertise + exposure to function as superforecasters — and who probably could function as superforecasters, in a market with fewer "sharks" in the pool — but who lose out simply because they were slightly less well-calibrated than whoever they were trading with.
Which is to say: prediction markets can still work and be worthwhile to participate in, even if everyone in them is rational. They don't require suckers.
But, in practice, they certainly do seem to attract them.
it is good if the losers are voluntarily participating. They are not coerced (stupidity is not coercion) into it, and therefore, it is reasonable that they expected to win the bet.
The only problem i have with polymarket (and others like it) are that insiders can often remain anonymous. It should not, and if an insider earns, but their win requires they remain anonymous or face some social/reputational repercussions, then that should happen.
Therefore, as long as KYC is enforced for these markets, i would have zero issues with their existence.
It's been written about extensively and is in every undergraduate economics course.
How have dots not been connected?
You could also take the other side to hedge some risk. It's up to them to define the value, not you for them.
Polymarket might be different, but conventional Vegas-style lines change with the amount of $$ bet, if the pool is $50M and an insider bets $10k on the long shot, the line isn't moving -- I don't see how insider information can be surfaced in this scenario except after the fact (and only maybe then).
In other words, if the line changes enough to signal insider info, it's not really insider info anymore.
And yes, the whole purpose of prediction markets is to turn insider info into public info.
Because the prediction market community is filled with liars and fraudsters, of course, it does seem to be common knowledge that this restriction isn't meant to be taken seriously, much like Polymarket's fake rule that Americans aren't allowed to use it.
But once you start from the premise that everything prediction markets say about their rules and practices is a lie, why should we believe they provide any genuine signal for anything?
https://www.reddit.com/r/CryptoCurrency/comments/1jki1lj/pol...
https://xkcd.com/1570/
Not much in between. The efficient market hypothesis claims many victims.
You bet against skilled people who set the stakes, so, yes, by observing numbers you can win in Keno, but if you comply to the TOS you will not win big money. The only chance to be able to "game the system" is to bet on something that lotteries brokers does not have time to look at, like 3rd Bulgarian bocce league matches.
The problem is that you need to somehow become an expert in 3rd Bulgarian bocce league and the money which are there are generally small.
I was investigating this (again) when AI showed up, as in theory it makes easier some analysis, but the big guys are also using AI.
Betting on a final score in most markets is fine.
When betting gets extremely narrow and specific e.g. "Player X will be subbed on for Player Y" it gets morally dubious.
There is a lot of overlap with insurance markets. The incentives have to be aligned (life insurance) with sensible guard rails against abuse (cooling off periods to be covered for suicide)
The short answer seems to be that he stole private information from a US company and used that information to enrich himself. And then got that charge enhanced with things like wire fraud and transacting on systems involving US currency.
And another commentor suggests that punishing insider traders in a step towards legitimzing and regulating prediction markets in the US.
The first problem doesn't seem to be all that hard in the US (unless the inside traders are part of the US government, of course), the second problem can be as simple as having Google organise an all-expenses-paid team activity to bait the subject into jurisdiction.
If the basis for their charges really is just that he traded in dollars, then this is yet another example why nobody should trust Americans and their currency when it comes to trade. I hope they can come up with something better than that.
This actually happens. I know that the FBI once organized an all-expenses-paid trip to a "conference in Hawaii" for certain Chinese chemists it wanted to nab.
The corollary is that if you have reason to expect you're wanted by American Feds, never travel outside China, Russia, and certain European states that are extraordinarily hesitant to extradite to the US (e.g. Ireland).
When will the white house insiders see the same fate?
No, they are pretending they are _commodities_. Pretending things are securities is disfavoured by the current administration.
The sounds extremely fascist.
- Paul Newman
Maybe there’s a chance he can get pardoned before 2029 lol
Kinda? It's not like people making an order of magnitude less don't get busted for crimes where they're stealing an order of magnitude less.
Which is obviously false, we all know the FAKE NEWS Google lies about this and they STOLE the designation of the most searched for person on the Internet.
Donald J Trump is the greatest person which ever lived, who ended 11 wars, and to imply that he is not the most searched person in the world is FAKE NEWS from the FAILING google.
Thank you for your attention on this matter
I think that the person misused Google internal information and deserves termination or other discipline, but I’m struggling to otherwise see the harm in what they did. Is insider trading a crime on prediction markets? Doesn’t it contribute to the accuracy of the pricing of prediction contracts, and therefore is good for the prediction market?
Yes, it is both against the CFTC's regulations and against the companies' T&Cs.
> Doesn’t it contribute to the accuracy of the pricing of prediction contracts, and therefore is good for the prediction market?
That's irrelevant, the purpose of these markets is to provide fair bets for entertainment, not information.
Not a crime, or certainly shouldn't be.
b. lobbied the president to attack Iran
c. neglected critical aid spreading Ebola
By the way there are reasons why we ban sport people from betting or insiders to disclose their (and relatives) trades to the sec: incentives.
It seems like the prediction market crowd cannot understand the economics of incentives and their harmful consequences.
Even though we already see the harm in the real world with journalists receiving death threats for reporting news or randoms tampering with meteorological equipment to win bets.
And that's only what we know.
A few more cases like this and people will go back to gambling
Shayne Coplan: Uh-huh. Yeah. I think that people going and having an edge to the market is a good thing. Obviously, you need to curate them and you need to be really clear and stringent on where the line is drawn and, like, sort of ethics and we spend a lot of time on that. But it's sort of an inevitability that this will happen, and there's a lot of benefits from it. And, you know, people will adapt.
[1] https://www.cbsnews.com/news/polymarket-ceo-shayne-coplan-on...
See also: https://www.nytimes.com/2026/05/24/us/how-prediction-markets...
Not really. But I can get your point.