> "This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election," a Polymarket spokesperson tells Axios.
When I saw that statement, from a company spokesperson, it was striking.
Is it now respectable and advisable for a corporation to make official statements like this?
There’s people in the comments characterising this as political positioning, and I think they’re dead on. However, it continues to do my head in how utterly ridiculous this statement is. Literally, there’s not even a motive.
Unless my memory is completely off, I don't recall Polymarket giving "Trump will win" vibes in the general lead up to the election. When they did, it was probably in the last few days.
If that's the case, I would've expected to the statement to be something like, "From our understanding, our only crime is to have presented an analysis that the outgoing administration also understood to be valid."
> It is not clear what the FBI was seeking when numerous agents entered Coplan's apartment at around 6am, or if Coplan and/or Polymarket are the targets of an investigation.
We have no information about why they are there, so you conclude it must be political retribution and they must be protected. THIS is why Trump won. So many people have zero critical thinking skills. When you see something that for which you have no information, you can say "I wonder what is going on." Then, you stop. Things that could be:
* Using collected data to facility spear phishing campaigns.
* Running a child pornography/sex trafficking ring.
* Participating in dogfighting.
* Been a back channel for selling trade secrets.
* Had some people killed.
* Routing all the information collected to foreign groups, like Russia.
* or.. has the other half of messages to someone under investigation whose phone locked.
But, given I have zero evidence to support any of this, let's stick with "let's see what they say."
Each of these are _completely_ invented and then dishonestly presented as valid:
- Using collected data to facility spear phishing campaigns.
- Running a child pornography/sex trafficking ring.
- Participating in dogfighting.
- Been a back channel for selling trade secrets.
- Had some people killed.
- Routing all the information collected to foreign groups, like Russia.
- or.. has the other half of messages to someone under investigation whose phone locked.
A real-world example of "zero evidence". Let's stick with "no lying". Also, in late 2024, giving the monstrously corrupt FBI the dishonesty-based benefit-of-the-doubt is beyond naive and comfortably in the realm of dishonest.
It has been days since I have seen such an example of "zero critical thinking skills"
Elon likes to weigh in on all sorts of matters outside his domain, such as UK or Italian politics. He's a classic example of intensity matching. Building rockets and cars doesn't transfer to credibility on non-scientific matters.
Respectable is subjective. Advisable? If they're probably guilty then appealing to the biases of the incoming administration is probably a good idea. On the other hand, if they're innocent and their accusation of bias is accurate, then saying as much is probably a good idea too.
Yeah, the reflexive accusations of "witch hunts" and "crooked hit jobs" are a recent development. Their lineage is obvious and ... I guess you can't blame them because they (somehow) play with a significant percentage of the population.
Serious answer: I don't know, but we shouldn't rush to judge until all the facts come out. All we know is they did a raid on the CEO home (not the business?) and the CEO claimed politics is involved.
I sincerely hope Congress performs their duty of oversight on the FBI well, so we can learn the truth of the matter. Overt politicization of federal law enforcement is a scary development.
Their audience here is the incoming administration, which is founded on party loyalty and an "us-vs-them" mindset, where "them" are the corrupt elites.
They're making a bet that whoever is prosecuting them in 4 months is going to be a lot friendlier to them if they act like victims of a vengeful democratic elite, and they're probably right. Really smart, honestly.
Before you place bets on Polymarket you need to check the box which says something like this: "I promise I'm not from US". Pinky swear that I'm not using VPN to place illegal bets. That's why FBI is investigating them, so case still hangs in the balance.
Wild take that might actually be true: by attacking the Biden administration, the company wants to appeal to Trump and maybe even get Trump's attention (and favor), hoping that the Trump administration will loosen the regulations on betting and eventually make it legal to operate their business in the US.
This is not a wild take at all. Every major corporation in the US is currently sucking up to Trump because his presidency will be entirely transactional and without regard to the constitutional purpose of the office. If you scratch his back, he will find a way to scratch yours - until it’s no longer convenient for him to do so.
Does it have anything to do with his statements about firing and enacting severe penalties, federal investigations in, and changes around the censorship requirements that many of these corporations engaged in with government agencies? He promised retraction of billions in federal funding- and many of these corporations are implicated.
No, it has much more to do with he changed his tone on EVs after Musk started to publicly supported him and pretty much said the phrase "I had to, he's helping me".
Or all the people he pardon'd in exchange for indirect money.
If they can curry favor with the incoming (extremely crypto friendly) administration, their problems with the FBI go away.
This kind of conspiratorial thinking dominates the Republican party and such a story would play well with the base. There is a clear motive for this approach - and it seems likely to work.
Ridiculous is also that they say this when Polymarket gave Trump only 60%-40% odds. They're falling for the same logical fallacy as everyone who knows nothing about prediction markets.
Polymarket also had Harris at 70% to win the popular vote right up to election day, which has transpired to be wrong.
Plus; all the betting markets had similar odds for Trump winning; smarket, predictit etc.
Sounds par for the course with the Biden administration. Watch what Ben and Marc have to say about them: https://www.youtube.com/watch?v=g4jWb-0nj44 They talk about how Biden has spent the last four years going beyond the law to destroy all the a16z crypto startups. So it doesn't surprise me that they'd use all their power to go after prediction markets too. I'm really glad I'm not working in upstart finance.
If this were aimed at Polymarket and their betting activities, then their lawyers would be getting subpoenas and the like, and a raid on their president would most likely be in concert with raids on their offices. AFAICT, it was only his person targeted.
That the FBI raided the home of an individual most likely means a criminal investigation of that person, for a federal crime or a crime that crosses state boundaries.
Bloomberg explicitly says it is part of an investigation of Polymarket allowing US users[1].
I guess it follows the pattern of the Binance investigation where they were able to show the Binance CEO instructed people to make sure the technical measures they implemented to ensure only non-US people were on their exchange were easy to bypass.
It is 2024... how are people still credulously using DiscloseTV as a source?
It's not about political inclination but rather that
there's no reason to keep trusting a source that has lied repeatedly, sensationalized repeatedly, and seems to have a very loose relationship with being "journalism" rather than entertainment (bait).
> Pournelle's Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people:
> First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.
> Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.
> The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.
I have no idea why your comment was killed, I resurrected it. Apparently people don't want to confront reality.
In my experience, this is accurate, but in the case of the FBI and the DOJ, they are much more interested in making a name for themselves on an individual level.
A supervisory special agent can push an investigation very far and has a lot to gain from it in terms of credibility among peers and career gains. Investigations into low profile targets are heavily deprioritized in favor of high profile targets.
The same pattern extends through to the US Attorney’s Office. Prosecutors are highly motivated to target high profile individuals and organizations.
Obviously there are no details yet, but I suspect it's as simple as:
- Polymarket is still very illegal in the US
- Lol. We all know it's easy to get around that
- If the CEO knew or was complicit in US citizens breaking laws, he could be in trouble. And if there was evidence he was encouraging it, he could be in big trouble
Kalshi got the goahead from an appeals court to list election bets. I think Robinhood added election bets soonafter. Is there a reason that wouldn't apply to Polymarket? Granted, Polymarket was operating before that ruling.
The Wall Street Journal version of the OP article seems to indicate that the ruling did not apply to Polymarker due to it’s settlement with the CFTC in 2022 - but the language used is a little unclear:
> Polymarket has blocked access to Americans since 2022, following a settlement with the Commodity Futures Trading Commission, which accused the company of running an unregistered derivatives-trading platform. Traders say the ban on U.S. users can be circumvented using virtual private networks.
>Election betting was legalized in the U.S. under a recent federal court ruling, but only for CFTC-regulated markets, so Polymarket has remained off-limits to Americans.
Kalshi is allowed to offer Futures under supervision of the CFTC[1]. The CFTC had previously said that prediction markets are not futures (they claimed they are illegal gaming), and Kalshi sued to get a ruling that they are futures.
Polymarket has avoided coming under regulation by the CFTC by avoiding US users. For their markets to be legal under current regulations they'd have to have all their markets approved by CFTC.
I think it's the perception that your comment assumes that the accusations by Polymarket that the Biden admin are targeting them for predicting Trump are true.
Yes, because Polymarket offers sports markets, which are still illegal in the US (for US users, anyway). Kalshi has been careful to offer markets in basically everything except sports.
It should be obvious what happened here: Polymarket has been offering grey or black markets to users, using only IP address as the discriminator, which is very easy to work around. They've operated under the Feds' radar for quite some time, and the Feds noticed them after they started getting significant press regarding the election.
The election is the reason they got noticed, but the likely crime itself is sports, not elections.
Can someone explain to me how this is? It's a company HQ'd in New York, but it's not allowed to do business in the very country it's HQ'd in? What am I missing?
You're not missing anything — that's exactly how it is. There's nothing that stipulates that US companies must sell to other US companies, and it's a great place for investments & startups, so even if Polymarket isn't licensed to operate in the US it still makes sense for them to be there.
> and it's a great place for investments & startups, so even if Polymarket isn't licensed to operate in the US it still makes sense for them to be there.
Well, maybe for startups in general, but it apparently didn't work out for Polymarket. Also, it's probably a better case if you're just not targeting US customers, rather than being actually forbidden from trading with US customers.
As I understand it (very much not a lawyer), the company complies with US laws by not allowing people in the US to use it, so there’s no issue doing business.
States like money. If you're complying with local laws and regulations then why wouldn't they want the tax revenue?
Fireworks are illegal in NY and have been illegal in PA for much of the past two decades. Despite this, the border is crawling with fireworks stores. PA made it illegal to sell fireworks to PA residents, but totally legal to sell to residents of neighboring states provided they immediately transport them over state lines.
It was like this for fireworks in the past too. Used to go to Pennsylvania where it used to be illegal for PA residents to purchase them, they'd check your drivers license when you came in to validate it was from elsewhere and issue a 24hr transport permit to get it out of the state. Naturally the fireworks shops were mostly near state borders.
The CEO or the company can only be in trouble if they are found guilty in court. That's not going to happen in the next two months, and Trump probably couldn't care less about this.
I'm not in the US, but as far as I know about the country the legal system there keeps running whether the current US President cares about individual cases or not...
Such cases would be pursued by DOJ or FCC or some other federal agency that the President has 100% control over. If the president asks to drop the case, it will be dropped.
> some other federal agency that the President has 100% control over
Neither Civil Servants nor Senior Executives can be directly terminated by the President without due process. Only appointees can be fired on a whim, and their replacements must be confirmed by the Senate. The only exception to this is "recess appointments" made when the Senate is not in session, but those appointments are temporary, and Congress can stay in session as long as needed (until the next seating after an election) to block these as long as both Houses agree to do so.
Many federal agencies today are actually governed by boards of commissioners, with limits on the number of them that can be from the same party.
The first amendment of the US constitutions says that it's illegal for the government to make a law which abridges people's freedom of speech. There are many cases of government entities working with social media companies to suppress speech as the Twitter Files have proved. As the government created and upholds those federal entities on the basis of laws, the government is responsible.
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
The part where Elon's mum said she was shocked by the contents of the Twitter files and that's why she stopped being a democrat. That's all the info I needed.
Haha. How leftist/neoliberal of me to outsource my opinion! Well, in my defence, Elon's mum is more trustworthy than CNN. She hasn't lied yet.
Unlike your typical leftist, I actually keep score of such things.
As a former user of in-trade and more recently of poly market, it is so annoying that there are laws against these sites. They serve an incredibly important function: letting people learn what’s happening in the world around us by observing a single number (e.g. % win probability).
I most receently used the site yesterday to see what the incumbent Australian government’s reelection chances are after they tabled ‘ID and age requirements to use social media’ laws, but polymarket didn’t seem to have Australian politics odds, so I was left using oddschecker, which is inferior due to the annoying way it displays odds and it not storing historical data.
> letting people learn what's happening in the world around us
I think that phrasing is a bit too optimistic. Even in cases where the "prediction" cannot influence the outcome, the primary "learning about the world" involves the imputed opinions of bettors.
Betting at horse-races doesn't teach you nearly as much about horses as actually going to the stables. :P
Err, checking the line on a horse race is a much more reliable way to tell who has what chance of winning than going to the stables as a random person, and most likely for a professional as well.
My point is that the "learning about what is happening in the world around us" part falls flat when what comes next is "by finding which person to copy test answers from."
I mean, yeah, you technically learn something, but the limitations undercut the sales-pitch.
If there is a better predictor than what is implied by the market then someone could make money on it. Hence the odds tend to be pretty accurate (with enough volume) because obvious edges like that tend to go to zero. A good example of that was the last election where people with access to private polls betted heavily and shifted the market one way.
This comment appears to be downvoted for ideological reasons? To me it seems manifestly true. The comment isn’t saying the market is perfect, just that it tends towards the best estimate because of incentives.
These imputed opinions tend to do a better job than traditional news. On election night, polymarket was ahead of the news channels every step of the way.
Edit: to be clear, I’m referring to polymarket essentially “calling” each swing state well before the networks did. I’m not just referring to the overall outcome.
DDHQ was also significantly ahead of the large media, and seemed to be what lead some of the moves in the betting markets. Seems like anyone at DDHQ with the fore-knowledge of the race calling could have easily front ran the betting markets. Same with Nate Silver and his daily releases. In the back of my mind I also wonder about that last minute Iowa pollster who released an outlier poll.
I would be interested in a blog post explaining it.
The classical fallacy is attributing skill to someone who has successfully predicted 10 coin flips (or market trends) in a row, ignoring the fact that there were many other people making different predictions and there was always going to be one of them who was successful.
Of course this is true, and the observation is underpowered. However, on election night it wasn’t just about being right it was about digesting information in real time and promulgating information faster. For example, polymarket had trump at like 99% likelihood of winning when the networks were still playing “horse race”.
The AP does not in fact call who wins. They publish their opinion, some people trust the AP to be accurate (or not!). The election is only "called" when all the states have certified their results and the US Congress has accepted those certifications. That happens early in the new year.
Polymarket had each state at above 95% likelihood of trump well ahead of the networks suggesting he was winning each state. It’s not just calling winner, it’s ingesting information faster
When these sorts of things get in the cross-hairs of the government, it's often not so much "laws against" but rather the lack of laws / regulation. We have seen this with Poker, Crypto, Crypto Exchanges, the lost goes on. If you're operating at the edge, you probably need to be working closely with someone to make damn sure the laws are covering your ass. Or that the laws can be created / changed for the new industry. If you're not big enough to do this, then danger ahead.
The US was not founded on this "permission" mindset. It's a free country. If you are not harming anyone or violating any existing laws, you are free to build new products and services. You do not need permission from bureaucrats to invent something new!
I'm pulling examples from actual US history. If it involves gambling (or similar) or creating alternate forms of money, then watch out. You can believe that you don't need permission, then tell that to the FBI as they are raiding your house.
you don't have to tell the FBI! you get a chance to tell the judge when the FBI/DOJ presents their case against you.
There are many recent examples of fed agencies doing aggressive tactics and getting overturned in the courts (Rare Breed Triggers or Polymer80 vs. ATF, or Apple vs. FBI for forced phone unlocks). Don't let them bully you into not building something that you believe is good for society!
> They serve an incredibly important function: letting people learn what’s happening in the world around us by observing a single number (e.g. % win probability).
I've heard this point argued a few different ways, and I have to say: this is the most idiotic way of analyzing the world I can imagine. Don't listen to gamblers or people who think superforecasters are a real thing. Studying the world and reflecting on it thoughtfully will get you a lot further than these probabilities ever will.
Public perception of what it means to be convicted has shifted with this election. Thiel of all people wouldn’t care if he is doing business with someone who is convicted, as long as they continue to make him money and push whatever agenda Thiel has.
"The President ... shall have Power to grant Reprieves and Pardons for Offenses against the United States, except in Cases of impeachment" [1]. Everything after that is, at best, case law.
> [1] The pardon would have put Nixon in a difficult position on the witness stand since he would not have been able to assert any Fifth Amendment privilege when questioned about his actions as president.
Nixon is the typical example of somebody pardon'd without an indictment. Like it would be wise to imply it could happen because it has!
There are a other trivial examples. Confederate solders weren't indicted [1]. The Vietnam draft dodging pardons didn't even name people [2] [3].
Why they would do it? I mean to nullify the 5th amendment right. Maybe you want to prosecute a crime boss so you give somebody a pardon (or immunity) so they can't/don't plead the 5th and have to testify against them.
You're arguing, with no evidence, for a claim with counterfactual precedent. (And look up preemptive pardons. Not been done. But you're lacking imagination if you can't see the utility of a pardon absent indictment or even accusation.)
Actually, it's not. As someone who has been both raided by the feds and been arrested. Being raided is way more traumatic and gave me PTSD. Being arrested is easy as fuck. Being raided involves fully armed people busting into your home and tearing it apart and seizing all of your electronics.
I still don't understand the Polymarket business model. Why take the legal risk of $3 billion in volume as an unlicensed commodities exchange if you're not even going to get paid for it? 1% would be $30,000,000!
Idealism, probably. The objective of prediction markets is to improve the collective cognitive capacity of humankind (see Earthweb for a science-fiction exposition of this by way of a rather heavy-handed plot device). Certain people are willing to take great risks to achieve things like that, maybe including Coplan, who I'm not personally acquainted with.
Here's an interesting question. We know that if a bettor in a prediction market wants to manipulate the market's prediction, it's likely to be extremely costly for them (though Théo's big bet on Polymarket seems to have shifted it a lot, so maybe we should doubt this theory). Does the operator of a prediction market have less-costly ways to manipulate the prediction?
Other than just shutting down the market permanently on Election Day, Mt. Gox style, which is an extremely profitable scam whether you manipulated the predictions or not.
> if a bettor in a prediction market wants to manipulate the market's prediction, it's likely to be extremely costly for them
About a decade ago I was told by someone on GOOG's anti-spam team that they had thought they'd finally made it too costly to spam, only to discover that political spammers just didn't care how much it cost.
That's one of the potential weaknesses in the idea. Ten trillion dollars might be too much to lose in a prediction market on how long it will take for Moscow to conquer Kiev, if it happens at all, conditional on Russia invading Ukraine; but is it too much to lose in a prediction market that could swing the US election?
Observably, so far, political spammers do not obtain ten trillion dollars per US election to spend on influencing it. Arguably this is only because they haven't found an effective way to spend that much money, and we should be very concerned that a mere 50 million dollars seems to have been enough to influence the prediction market results quite seriously in this case.
But that's not necessarily inherent to markets, even prediction markets. Foreign exchange rates were a major issue in our last election, because our rate of inflation was top in the world last year, but it isn't plausible for political parties to bet enough in forex futures markets to influence their predictions of those exchange rates—because banks bet almost 8 trillion dollars per day in the forex markets, so to intentionally maintain an irrational prediction in the market over the several months of the campaign, you'd need to be rich enough to expend roughly the entire world yearly GDP, and willing to lose it.
If sending spam required posting a bond set by the receiver, to be paid to the receiver if they decided the email was unwanted, I think you'd find that even political spammers did start to care a great deal about the cost. Until they cared, I'd set up domains with billions of potential receivers, each setting a ten-dollar bond. After the political spammers transferred their first few billion dollars to me, they'd run out of money.
> If sending spam required posting a bond ... to be paid to the receiver if they decided the email was unwanted...
Come to think of it, that sounds a lot like diplomatic exchanges during the Bronze Age: sending your ambassador along with a bunch of gifts like exotic animals and spices and slaves was an implicit way of saying "I'm confident you'll want to hear my guy out; confident enough that if you don't think his proposal is worthwhile, just keep these gifts and don't reciprocate them".
speaking of which, any chance I could get you to double check my math in https://news.ycombinator.com/item?id=42125052 ? If Jim Gray's 5 minute rule has, via SSDs, really turned into the 1 week rule, that ought to be reflected in any new OS development?
for good measure, Mark Twain on lagniappe:
> The shopman always responds; gives the child a bit of licorice-root, gives the servant a cheap cigar or a spool of thread, gives the governor—I don't know what he gives the governor; support, likely.
I disagree, I think you paint gambling in a way too positive light. We're not using prediction markets to bet on how much % of silica is in some rock a Mars rover finds, or to bet on the topology of a folding protein. This is gambling and whoever thinks this gambling is any more profound than other kinds is going to find out sooner or later.
By your yardstick, humanity is learning the outcome of sports events ahead of them happening and this is a profound world wide tool for the advancement of humanity. For me it's gambling, for that other guy too. Switching "sports event" for "election" doesn't make it more profound. And people will still kill themselves when they are at the end of the gambling spiral.
Your comment is significantly higher quality, and I appreciate that. It still has three problems:
1. I didn't make any claims about prediction markets†. I made claims about what prediction-market advocates like Shayne Coplan and Alex Tabarrok believe, because the question was what could motivate someone to operate an unprofitable one. Since I am not not currently operating a prediction market or working on a prediction-market project of any kind, it is wholly irrelevant which shit I do or don't believe about prediction markets.
Analogously, if I were to claim that the Nazis killed ten million people in death camps because they believed that Jews and Roma were subhuman, you could not validly argue that, in fact, Jews and Roma are not subhuman, and therefore the Holocaust could not have happened.
2. You do not present any arguments that the worthless comment by "FactKnower69" (!!) was itself worth posting, or even correct; you only present an argument about why you think prediction markets are not worthwhile.
Presenting any argument at all puts your comment head or shoulders above the comment I was criticizing. But "FactKnower69"'s claim was not that prediction markets were harmful; it was that advocates of prediction markets were both insincere and highly profitable, in particular the people operating PMs like Polymarket and Kalshi, and also that I am a fucking idiot. I concede that I am a fucking idiot; "FactKnower69" nailed that one entirely by chance. But, with respect to the rest of their comment, it is not only possible but actually common for people to sincerely advocate policies that are, unbeknownst to them, harmful, as well as to profit from those policies. So, even if prediction markets are not worthwhile, their advocates may be sincere and/or unprofitable.
Moreover, even if prediction-market advocates are insincere and/or profitable, "FactKnower69"'s comment contains no information tending to show that; it's just an unsupported assertion. Worthless unsupported assertions of both true and false claims are also common, so even if you were to show that prediction-market advocates were insincere and/or profitable (a task you did not attempt), that still doesn't rescue "FactKnower69"'s comment from the sewer it was born in.
3. Your argument is at least equally applicable to stock, commodities, and forex markets; "knowing" how much hard red winter wheat or aluminum will cost a year from now, or how profitable PPG Industries will be over the next few years, is even less of a "profound world wide tool for the advancement of humanity" than "knowing" who will win the US election, and those markets are also well known to cause suicide. So your argument is not a very strong argument; it would entail that those markets are also net harmful and should be eliminated if possible, which I am sure you will concede is a position far out on the fringes of extremism.
______
† Well, except that I did claim that it would be very profitable for an unethical prediction-market operator to disappear with everyone's money on the eve of a major event like an election, but that seems to be irrelevant to the rest of the discussion.
The most likely explanation is that the issue is not election related (for example, they knowingly allowed US bettors), but that they waited until after the election to avoid even the appearance of interfering in the election
We clearly don't have enough information about what went down, but betting on political outcomes should be legal. In my opinion, at least. If you can bet on a sports game, you should be allowed to bet on an election.
I thought thid would happen when I see Kalshi launched an almost exact copy of Polymarket but claiming following US laws. This will follow the path of Binance.
>This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election
I don't even understand what the conspiracy theory is here. Why would that be something the Biden administration would seek retribution for? And even it were, how would they possibly achieve it before the new administration takes office?
It’s not a conspiracy theory. It’s a barely coded message to the next administration to pull on the FBI’s leash and/or push for legalization in the US.
“Political retribution by the outgoing administration” = “I’m the enemy of your enemy”. “Correctly called the 2024 presidential election” = “I’m flattering you on your glorious victory over our shared foe, now hook a brother up.”
Yeah, it doesn't make much sense. I think these are the (tenuous) claims:
- Many in the "crypto community" have perceive the Biden administration as hostile to it (Polymarket uses Polygon crypto).
- Peter Thiel is an investor in Polymarket. Thiel backed Trump in '16 and is often Republican aligned. Additionally, JD Vance once worked for Thiel. Thiel was a (very) major funder of Vance's senate election campaign.
- Polymarket's markets predicted Trump to win. This, to me, is the biggest stretch of all the conspiracy type stuff. But I guess it goes, "You put your thumb on the scales to show Trump was going to win. <...some causal chain of events...> We lost. Now we're going to punish you."
My guess is that it's as straightforward as: many bettors on Polymarket are U.S. citizens. Polymarket knows this and in all likelihood facilitates this, maintaining the thinnest possible veneer of plausible deniability. While betting on U.S. elections by U.S. bettors is apparently legal [1], it still requires market makers to submit to some registration process. That requirement has not been fulfilled by Polymarket. Also, in 2022 Polymarket settled a case with the CFTC for operating an unregistered derivatives market [2]. Who knows, it might just be related to a violation of that settlement?
I'm also confused, but I'd imagine that if Trump lost the election and betting sentiment on polymarket predicted strongly that Trump would win, it could be used as further "proof" that fraud occurred and that the democrats stole the election.
Polymarket probably thinks that the Biden administration is angry with them for showing how the population truly feels as all other sources are obviously corrupt /s
The conspiracy theory is that Polymarket was rigged by nefarious forces to promote Donald Trump. It was widely promulgated in the mainstream press* leading up to the election. If you view Polymarket as an illegitimate tool used to help put a dictator in the White House, not surprising the the party being being replaced would attack it.
* E.g. the New Yorker, "Polymarket has seen a recent surge in pro-Trump election bets. Is it the movement of a rational market or a concerted campaign?" or Newsweek, "Polymarket Prediction Platform Possibly Manipulated to Favor Trump"
So why not raid the corporate offices too? Why, out of all of the people and organizations involved, just the CEO?
The FBI is quite good at serving multiple warrants in multiple locations at the same time when pursuing conspiracies. Presumably, in the scenario where they are the conspiracy, they could do just as well.
It doesn't seem like a great conspiracy theory to explain what actually happened.
Polymarket is crypto adjacent, and the current administration has been going against the whole crypto ecosystem. I don't think it's just about predicting that Trump would win.
No, because even though insurance companies make profit, the primary motivation of insurance is risk pooling amongst the policyholders. This is not the case for those trading binary options or similar instruments (except for "hedging" - a legitimate use case of producers buying futures, for example).
An insurance company sells options contracts. We call it healthcare. It is , aside from a few small differences, the same as a put or a call.
An insurance company's day-to-day operation is indistinguishable from a derivatives hedge desk. Insurance companies absolutely take massive bets. These are managed by re-insurers.
Insurance is not a prediction market whatsoever, not even a little bit. A market has a buyer and a seller; Geico does not allow you to bet on how many accidents will happen in America this year.
since I like gambling on stock exchanges and table games I prefer the more nuanced term for the specific game I'm playing.
its more wasteful for some segment of our society to need a distinction between investing or gambling at all, the people they're competing against don't care, don't have any cultural limitation, religious limitation, or peer group that needs this distinction. and your "legitimizes" wording looks based on needing a distinction.
even with the "positive or negative expected value" metrics to distinguish some financial games, I've traded options contracts with a lower expected value than a table game at a casino. so just don't worry about the distinction and use our words for the specific game we're playing. prediction markets are prediction markets.
I am not familiar with the term 'gambling exchange', where'd you get it? Many 'sportsbooks' are referred to as 'betting exchanges', but that has become something of a term of art, much like the term 'prediction market'.
In any case, attempting to use a derogatory or denigrating euphemism to refer to something is usually less productive than simply exposing (what you perceive to be) its faults. What specific issues do you have with these markets/exchanges?
Not GP, but I suspect it's the gambling part? Hence the name?
Gambling is a destructive addition that the vast majority of participants cannot manage well. It harms not only them, but their children and their spouses. How many a kid's college fund has gone up in smoke? A lot of harm is done to very innocent people in pursuit of a ten second rush. (Much like all other addictions.)
I also very respectfully disagree that inventing a name for something is not productive - it's incredible effective, in fact. That's why political campaigns often favour duelling names over hot button issues: it's easier to win broad based support from soccer moms and football dads for 'marriage equality', whereas 'homosexual marriage' may be a harder sell. See also 'medicare for all' versus 'socialized medicine', 'pro-choice' v 'pro-life' etc.
These markets are no more "gambling" than other markets are.
A traditional sportsbook maintains a house vig anywhere from 5 to 15%, which is, indeed, a pretty fast path to ruin. They typically don't allow you to exit your position once you're committed.
Polymarket's sports markets, in contrast, have comparable bid/ask spreads to financial markets (maybe slightly wider), and the market is liquid such that you can sell your contract to someone else whenever you want.
> These markets are no more "gambling" than other markets are.
Whoever said other markets aren't gambling?
> Polymarket's sports markets, in contrast, have comparable bid/ask spreads to financial markets (maybe slightly wider), and the market is liquid such that you can sell your contract to someone else whenever you want.
'Financial markets' is a slippery term - you could be using it to refer to traditional investing (holding a diversified share portfolio for years because you believe in the fundamentals of the companies in question), or you could be using it to refer to things like frenetic speculating in short-dated out-of-the-money 'binary option' contracts.
The former is not gambling (no 'rush', not generally addictive, very hard to go broke, mathematically sound), and the latter is absolutely 100% gambling (all rush, totally addictive, incredibly easy to lose your shirt, mathematically stupid). There have been many attempts at 'finance-washing' straight up gambling schemes in recent years, and I wouldn't be surprised if we see more crackdowns soon.
Pretending that betting on election results is some complex financial derivative that is totally magically immune to laws about gambling isn't going to fool any judge.
IIRC There is only one prediction market with a single regulatory exemption granted for the University of Iowa and the bets are limited to $500.
The rest of what we see are (binary) event contracts (options)
Based on my understanding, which may be incorrect, they seem to be basically a rebranding of binary options which were illegal in the US for the longest time. With a clever renaming trick things now work :)
> Rules and limits
> The IEM is neither regulated by the U.S. Commodity Futures Trading Commission (CFTC) nor by any other agency due to its academic focus and the small sums that are involved. Indeed, the IEM has received two no-action letters that extend no‑action relief. A speculator may put at risk in the IEM only between $5 and $500.
> They are banned across Europe, Australia, the U.K., and many other jurisdictions because of their volatility and are often seen as wagers more akin to gambling than sound investing.
The weird part: In all of these jurisdictions, there is a large "structured products" market, where large investment banks structure complex derivs with (often multiple) embedded binary options (called knock-out or knock-in), and sell them to high-net-worth people via private banks. I guess the "embedded" part makes them legal? To be clear, this market is over 20 years old at this point, so if regulators did not allow, they would have stopped it by now.
The structured part is because these options are most likely replicated with existing option products. A binary call can similarly be replicated with other options and packaged
> A binary call can similarly be replicated with other options
I don't think that this statement is true. Using vanilla call and put options, it is not possible to exactly replicate a binary option. Please correct me if wrong.
But it is not derogatory or euphemistic, it is descriptive. Polymarket is gambling by any definition. Gambling is known and proven to have great harms and risks to society.
(And I got the term "gambling exchange" from the UK where Betfair Exhange basically does what Polymarket do since 2000, without the Crypto glamour.)
> But it is not derogatory or euphemistic, it is descriptive. Polymarket is gambling by any definition. Gambling is known and proven to have great harms and risks to society.
I can only speak from a UK perspective, but many financial instruments can be used in a gambling sense by retail "investors". In 2019, our regulator banned binary options, saying this:
"Binary options are gambling products dressed up as financial instruments. By confirming our ban today we are ensuring that investors don’t lose money from an inherently flawed product."
Everything in finance is isomorphic to some combination of borrow-lend agreements. Betting markets and futures markets are functionally one in the same. The only difference is the oracles and the series of bets required to construct your position.
Good? These gambling machines are predatory and destructive institutions and needed to be shut down a long time ago. Everything a casino touches turns into hyper-capitalistic dystopia, they are the wealthy elites' worst exploitation, distilled and refined into a poison.
And now they are trying to play with society from the top-down by rebranding as "prediction markets for everything", not only pretending to sell a crystal ball but also setting up the incentives for those at the top of the financial system to destroy society and bet on the destruction of society at the same time. I say: shatter their poker chips, dissolve the house, don't allow them to accumulate any more of this type of power.
Why would you think I don't know how it works? Because I'm calling it a gambling machine and not hyping it up as a prediction market? Is it somehow different from all of the new sports betting sites that have wreaked havoc through the sports industry in a very short span of time? Don't fall for their dumb marketing, it's letting them spread poison.
It’s sad that something based on the Wisdom of Crowds by James Surowiecki is being politicized as gambling. It’s crucial that we have prediction markets so that we can better understand the risks of things happening in our world.
1. We do have prediction markets -- Kalshi, IB, and Robinhood all offered binary options contracts on election outcomes this year.
2. A ton of options trading is gambling, and binary options on events particularly so. Doesn't mean it should be illegal, of course, but I think that's just a facially obvious truth that we should all be honest with one another about.
I think the key factor here is that the website allowed Americans to bet on the political market. Which I still don't quite understand, the FBI waiting until after the election for this. Why didn't they go after them sooner?
> " Any action likely to raise an issue or the perception of an issue under this provision requires consultation with the Public Integrity Section, and such action shall not be taken if the Public Integrity Section advises that further consultation is required with the Deputy Attorney General or Attorney General. "
One explanation is it gives Polymarket more rope to hang themselves with. Trading volume likely spiked in the lead up, and during, election night. Big numbers make for splashier headlines.
Another could be concern of doing anything visibly election related prior to the election, in case the winner didn’t like the action.
While I understand that logic, I also find it a bit distasteful. Law enforcement shouldn't tolerate crimes being committed on its watch any longer than necessary.
Of course, the exact meaning of "necessary" is the problem. We can probably all agree that letting a serial murderer kill more people in order to have more evidence against him would be an absolute abomination. But the situation is not that clear with white-collar crime, especially the sort of crime where the harm is not immediately obvious.
Maybe the fact that the FBI could wait that long before pouncing indicates that this sort of betting is, in fact, a victimless crime.
They probably have a different definition of what is "necessary" than you. If waiting for further crimes to be committed makes the case more of a sure thing in their eyes) then it's necessary. Or if it gives them more serious crimes to prosecute or a higher up person to prosecute. I believe this is common in organized crime investigations.
> Law enforcement shouldn't tolerate crimes being committed on its watch any longer than necessary.
That is simply not how it works and for good reason. If it were, imagine the consequences. Most charges would never lead to a trial or a conviction because law enforcement would have acted on the very first sign of criminal action instead of investigating further or working their way up the chain. We'd only end up arresting low level foot soldiers and the higher ups would get away every single time.
The wheels of justice move slowly, and for good reason.
I'm confused what your point is? Is it when cops/prosecutors build cases that take time they are tacitly saying the crime is victimless? Do you think law enforcement should only target street level dealers/car thieves because to spend time building cases against drug distributors/chop shops renders the crime victimless?
OK but what if that serial murderer were running for president? It would be wrong to deny the people their chance to be governed by a gleeful psychopath.
As HL Mencken once said 'Democracy is the theory that the common people know what they want, and deserve to get it good and hard.'
Robinhood launched a new feature where we could bet on the presidential candidate. I've heard of a couple others too, so I think that laws were created and funded by competitors, and they defined what was legal in a way that excluded polymarket.
I think in this case, polymarket allows betting on anything, competitors got betting on the election legalized (https://www.barrons.com/news/last-minute-legal-ruling-allows...), so they get the cash from polymarket's idea then get them banned/stopped long enough to take their market share.
VC's call it Regulatory Capture, politicians call it corruption.
Polymarket could've easily registered as an exchange at any point in the last 4+ years, and then itself filed the suit that its competitors filed. Instead they chose to just ignore the law.
> VC's call it Regulatory Capture
This isn't regulatory capture. You can disagree with the regulation, but the barrier to entry here is not that high. Kalshi is like 5 years old.
"Capture" is a thing, and it does not just mean "any regulation that I happen to disagree with".
You do need capital to stand up a regulated exchange, but, then, you also need capital to stand up an unregulated exchange. And the difference between those two numbers is not nearly big enough to come anywhere close to creating capture.
You're right, I had been using a definition of regulatory capture that doesn't really fit what I'm seeing when I look it up. I learned it to mean capture of market share through regulation, either by getting your competitors banned, forced creation of consumers through law (like car seats/helmets/paper straws). Maybe someone knows what that is called?
Instead, it means regulatory agencies become dominated by the interests of those they were originally charged to regulate.
I still speculate this raid to be Kalshi/Robinhood/whomever to be going after polymarket at a prime time- the concept of betting on events got huge and the industry of event-hedging directly (avoiding the stock market proxy) no longer needs to band together to get the idea out- now it's a matter of getting all the consumers to choose your particular product vs a competitors.
The Prediction Market industry got out ahead of regulation and effectively chose their own (weak and hands-off) regulator in the CFTC. The requirements involved are not onerous. There are certainly jurisdictions where actual gambling is more tightly regulated. I am not exaggerating when I say that any pair of a good programmer and a decent lawyer could do the technical work to stand up a compliant exchange (they'd need capital, but, again, nothing insane compared to the capital you'd need for an unregulated exchange anyways).
I don't think you are at all correct about the relationship between Polymarket and other event trading venues. For one thing, Kalshi and polymarket are basically contemporaneous. For another, Polymarket plays at these games too (Polymarket has a former Commissioner of the CFTC on their board).
To the extent that Polymarket is playing in the legal grey zone, it's an active choice on their part, not a result of competitors' regulatory advantage or Polymarket's lack of access to regulatory leverage.
You seem to be anti-polymarket. I'm speculating that one or more of their competitors are behind the timing on this raid, and not offering any opinion on whether polymarket made a wise choice in not seeking regulation or whether or not they would also pull the same move on competitors.
IMO, the counters to my speculations would be that the raid was because they got too popular and the gov didn't want a million people starting up their own exchanges, or they reached a monetary tipping point the gov set to warrant a raid.
> Which I still don't quite understand, the FBI waiting until after the election for this. Why didn't they go after them sooner?
Because the conspiracy theorists wouldn't have gone to town if the market predicting Trump's win were shut down before the election?
Polymarket hit popular imagination in the summer of 2023 with the Titan submersible [1]. American political betting didn't hit papers until earlier this year. We're well within normal FBI timelines for executing a first search.
> "This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election," a Polymarket spokesperson tells Axios.
When I saw that statement, from a company spokesperson, it was striking.
Is it now respectable and advisable for a corporation to make official statements like this?
There’s people in the comments characterising this as political positioning, and I think they’re dead on. However, it continues to do my head in how utterly ridiculous this statement is. Literally, there’s not even a motive.
Unless my memory is completely off, I don't recall Polymarket giving "Trump will win" vibes in the general lead up to the election. When they did, it was probably in the last few days.
If that's the case, I would've expected to the statement to be something like, "From our understanding, our only crime is to have presented an analysis that the outgoing administration also understood to be valid."
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It’s a signal to the incoming President to protect them ASAP
> It is not clear what the FBI was seeking when numerous agents entered Coplan's apartment at around 6am, or if Coplan and/or Polymarket are the targets of an investigation.
We have no information about why they are there, so you conclude it must be political retribution and they must be protected. THIS is why Trump won. So many people have zero critical thinking skills. When you see something that for which you have no information, you can say "I wonder what is going on." Then, you stop. Things that could be:
* Using collected data to facility spear phishing campaigns. * Running a child pornography/sex trafficking ring. * Participating in dogfighting. * Been a back channel for selling trade secrets. * Had some people killed. * Routing all the information collected to foreign groups, like Russia. * or.. has the other half of messages to someone under investigation whose phone locked.
But, given I have zero evidence to support any of this, let's stick with "let's see what they say."
Each of these are _completely_ invented and then dishonestly presented as valid:
- Using collected data to facility spear phishing campaigns. - Running a child pornography/sex trafficking ring. - Participating in dogfighting. - Been a back channel for selling trade secrets. - Had some people killed. - Routing all the information collected to foreign groups, like Russia. - or.. has the other half of messages to someone under investigation whose phone locked.
A real-world example of "zero evidence". Let's stick with "no lying". Also, in late 2024, giving the monstrously corrupt FBI the dishonesty-based benefit-of-the-doubt is beyond naive and comfortably in the realm of dishonest.
It has been days since I have seen such an example of "zero critical thinking skills"
>Elon Musk, the richest man in the world and one of the president-elect’s closest advisors, wrote, “This seems messed up” in response to the news.
https://www.theguardian.com/technology/2024/nov/13/fbi-raid-...
Elon likes to weigh in on all sorts of matters outside his domain, such as UK or Italian politics. He's a classic example of intensity matching. Building rockets and cars doesn't transfer to credibility on non-scientific matters.
He shits out his perspective into every conversation and buys himself a bigger voice, let's not spread his drivel for him.
Respectable is subjective. Advisable? If they're probably guilty then appealing to the biases of the incoming administration is probably a good idea. On the other hand, if they're innocent and their accusation of bias is accurate, then saying as much is probably a good idea too.
Corporations have been making these kinds of statements for almost the past decade.
> Corporations have been making these kinds of statements for almost the past decade.
For ever...
Have corporations ever not played the "aggrieved victim" card?
The social/political appeal part is the new part. Companies have always released "we did nothing wrong" statements.
Yeah, the reflexive accusations of "witch hunts" and "crooked hit jobs" are a recent development. Their lineage is obvious and ... I guess you can't blame them because they (somehow) play with a significant percentage of the population.
Blaming the incident on “political retribution” (their words) implies that the US government is corrupt.
Such a weird thing to blame it on.
why? Is the US gov immune from corruption?
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Serious answer: I don't know, but we shouldn't rush to judge until all the facts come out. All we know is they did a raid on the CEO home (not the business?) and the CEO claimed politics is involved.
I sincerely hope Congress performs their duty of oversight on the FBI well, so we can learn the truth of the matter. Overt politicization of federal law enforcement is a scary development.
What evidence do you have of that being the case?
Are you joking?
The current US government is the most corrupt entity in the history of the world, if you multiple corruption times power.
And I love my country (USA), but just hate what the government has become over the past 60-80 years.
Respectable and advisable? No. Smart? Yes.
Their audience here is the incoming administration, which is founded on party loyalty and an "us-vs-them" mindset, where "them" are the corrupt elites.
They're making a bet that whoever is prosecuting them in 4 months is going to be a lot friendlier to them if they act like victims of a vengeful democratic elite, and they're probably right. Really smart, honestly.
Given Peter Thiel is a big investor in polymarket, and is JD Vance's daddy, I'm sure they will have no problem getting this case dismissed.
Before you place bets on Polymarket you need to check the box which says something like this: "I promise I'm not from US". Pinky swear that I'm not using VPN to place illegal bets. That's why FBI is investigating them, so case still hangs in the balance.
Wild take that might actually be true: by attacking the Biden administration, the company wants to appeal to Trump and maybe even get Trump's attention (and favor), hoping that the Trump administration will loosen the regulations on betting and eventually make it legal to operate their business in the US.
This is not a wild take at all. Every major corporation in the US is currently sucking up to Trump because his presidency will be entirely transactional and without regard to the constitutional purpose of the office. If you scratch his back, he will find a way to scratch yours - until it’s no longer convenient for him to do so.
Does it have anything to do with his statements about firing and enacting severe penalties, federal investigations in, and changes around the censorship requirements that many of these corporations engaged in with government agencies? He promised retraction of billions in federal funding- and many of these corporations are implicated.
No, it has much more to do with he changed his tone on EVs after Musk started to publicly supported him and pretty much said the phrase "I had to, he's helping me".
Or all the people he pardon'd in exchange for indirect money.
It's literally transactional.
If the bar for decorum is the President-elect, then yes this would be considered an acceptable statement.
If they can curry favor with the incoming (extremely crypto friendly) administration, their problems with the FBI go away.
This kind of conspiratorial thinking dominates the Republican party and such a story would play well with the base. There is a clear motive for this approach - and it seems likely to work.
Ridiculous is also that they say this when Polymarket gave Trump only 60%-40% odds. They're falling for the same logical fallacy as everyone who knows nothing about prediction markets.
Polymarket also had Harris at 70% to win the popular vote right up to election day, which has transpired to be wrong. Plus; all the betting markets had similar odds for Trump winning; smarket, predictit etc.
Polymarket is a market. Not sure if AMM or order book but whatever. Anyone attempting to control it wasting money.
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Sounds par for the course with the Biden administration. Watch what Ben and Marc have to say about them: https://www.youtube.com/watch?v=g4jWb-0nj44 They talk about how Biden has spent the last four years going beyond the law to destroy all the a16z crypto startups. So it doesn't surprise me that they'd use all their power to go after prediction markets too. I'm really glad I'm not working in upstart finance.
If this were aimed at Polymarket and their betting activities, then their lawyers would be getting subpoenas and the like, and a raid on their president would most likely be in concert with raids on their offices. AFAICT, it was only his person targeted.
That the FBI raided the home of an individual most likely means a criminal investigation of that person, for a federal crime or a crime that crosses state boundaries.
Bloomberg explicitly says it is part of an investigation of Polymarket allowing US users[1].
I guess it follows the pattern of the Binance investigation where they were able to show the Binance CEO instructed people to make sure the technical measures they implemented to ensure only non-US people were on their exchange were easy to bypass.
[1] https://www.bloomberg.com/news/articles/2024-11-13/polymarke...
https://x.com/disclosetv/status/1856841521334816928
they are investigating Polymarket itself
It is 2024... how are people still credulously using DiscloseTV as a source?
It's not about political inclination but rather that there's no reason to keep trusting a source that has lied repeatedly, sensationalized repeatedly, and seems to have a very loose relationship with being "journalism" rather than entertainment (bait).
What about Bloomberg?
https://www.bloomberg.com/news/articles/2024-11-13/polymarke...
Its 2024, Donald trump is president elect backed by "geniuses" of silicon valley
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I mean. People still read the Washington Post!
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> Pournelle's Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people:
> First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.
> Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.
> The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.
I have no idea why your comment was killed, I resurrected it. Apparently people don't want to confront reality.
https://www.jerrypournelle.com/reports/jerryp/iron.html
In my experience, this is accurate, but in the case of the FBI and the DOJ, they are much more interested in making a name for themselves on an individual level.
A supervisory special agent can push an investigation very far and has a lot to gain from it in terms of credibility among peers and career gains. Investigations into low profile targets are heavily deprioritized in favor of high profile targets.
The same pattern extends through to the US Attorney’s Office. Prosecutors are highly motivated to target high profile individuals and organizations.
> The FBI is NOT an organization that’s dedicated to keeping Americans safe.
The new Attorney General just said that if the FBI doesn't now begin to serve the interest of the american people, he'd get rid of the FBI altogether.
So using the FBI for political targeting may very well soon.
Obviously there are no details yet, but I suspect it's as simple as:
- Polymarket is still very illegal in the US
- Lol. We all know it's easy to get around that
- If the CEO knew or was complicit in US citizens breaking laws, he could be in trouble. And if there was evidence he was encouraging it, he could be in big trouble
Kalshi got the goahead from an appeals court to list election bets. I think Robinhood added election bets soonafter. Is there a reason that wouldn't apply to Polymarket? Granted, Polymarket was operating before that ruling.
https://www.reuters.com/legal/us-federal-court-upholds-rulin...
The Wall Street Journal version of the OP article seems to indicate that the ruling did not apply to Polymarker due to it’s settlement with the CFTC in 2022 - but the language used is a little unclear:
> Polymarket has blocked access to Americans since 2022, following a settlement with the Commodity Futures Trading Commission, which accused the company of running an unregistered derivatives-trading platform. Traders say the ban on U.S. users can be circumvented using virtual private networks.
>Election betting was legalized in the U.S. under a recent federal court ruling, but only for CFTC-regulated markets, so Polymarket has remained off-limits to Americans.
https://www.wsj.com/us-news/law/fbi-polymarket-ceo-investiga...
Would scream civil instead of criminal.
Has nothing to do with elections and all to do with being an unregulated market that has zero KYC.
Kalshi is allowed to offer Futures under supervision of the CFTC[1]. The CFTC had previously said that prediction markets are not futures (they claimed they are illegal gaming), and Kalshi sued to get a ruling that they are futures.
Polymarket has avoided coming under regulation by the CFTC by avoiding US users. For their markets to be legal under current regulations they'd have to have all their markets approved by CFTC.
[1] https://kalshi.com/blog/article/how-is-kalshi-regulated
Even if election bets are legal, the betting market is still highly regulated.
What rake did I just step on? I'm getting downvoted for this.
I think it's the perception that your comment assumes that the accusations by Polymarket that the Biden admin are targeting them for predicting Trump are true.
I see. Well that was not my intention here.
Yes, because Polymarket offers sports markets, which are still illegal in the US (for US users, anyway). Kalshi has been careful to offer markets in basically everything except sports.
It should be obvious what happened here: Polymarket has been offering grey or black markets to users, using only IP address as the discriminator, which is very easy to work around. They've operated under the Feds' radar for quite some time, and the Feds noticed them after they started getting significant press regarding the election.
The election is the reason they got noticed, but the likely crime itself is sports, not elections.
Can someone explain to me how this is? It's a company HQ'd in New York, but it's not allowed to do business in the very country it's HQ'd in? What am I missing?
You're not missing anything — that's exactly how it is. There's nothing that stipulates that US companies must sell to other US companies, and it's a great place for investments & startups, so even if Polymarket isn't licensed to operate in the US it still makes sense for them to be there.
> and it's a great place for investments & startups, so even if Polymarket isn't licensed to operate in the US it still makes sense for them to be there.
Well, maybe for startups in general, but it apparently didn't work out for Polymarket. Also, it's probably a better case if you're just not targeting US customers, rather than being actually forbidden from trading with US customers.
As I understand it (very much not a lawyer), the company complies with US laws by not allowing people in the US to use it, so there’s no issue doing business.
US Cellular <https://en.wikipedia.org/wiki/U.S._Cellular>, the US's fifth-largest mobile service provider, as of 2012 no longer operates in its headquarters city of Chicago. <https://www.prnewswire.com/news-releases/us-cellular-to-sell...>
States like money. If you're complying with local laws and regulations then why wouldn't they want the tax revenue?
Fireworks are illegal in NY and have been illegal in PA for much of the past two decades. Despite this, the border is crawling with fireworks stores. PA made it illegal to sell fireworks to PA residents, but totally legal to sell to residents of neighboring states provided they immediately transport them over state lines.
It was like this for fireworks in the past too. Used to go to Pennsylvania where it used to be illegal for PA residents to purchase them, they'd check your drivers license when you came in to validate it was from elsewhere and issue a 24hr transport permit to get it out of the state. Naturally the fireworks shops were mostly near state borders.
You can do it, but it's an incredibly foolish way to operate, as the CEO is finding out.
> If the CEO knew or was complicit in US citizens breaking laws
the frontpage being almost exclusively about US politics is kind of a giveaway
From what I can gather online, US citizens can indeed legally bet on elections: https://www.nbcnews.com/politics/2024-election/election-bett...
The CEO or the company can only be in trouble if they are found guilty in court. That's not going to happen in the next two months, and Trump probably couldn't care less about this.
I'm not in the US, but as far as I know about the country the legal system there keeps running whether the current US President cares about individual cases or not...
Such cases would be pursued by DOJ or FCC or some other federal agency that the President has 100% control over. If the president asks to drop the case, it will be dropped.
> some other federal agency that the President has 100% control over
Neither Civil Servants nor Senior Executives can be directly terminated by the President without due process. Only appointees can be fired on a whim, and their replacements must be confirmed by the Senate. The only exception to this is "recess appointments" made when the Senate is not in session, but those appointments are temporary, and Congress can stay in session as long as needed (until the next seating after an election) to block these as long as both Houses agree to do so.
Many federal agencies today are actually governed by boards of commissioners, with limits on the number of them that can be from the same party.
He would have to care about the case to bother doing so…
Trump not caring will mean the case proceeds. Why would they drop it?
The person who financed the vice president is a major investor in Polymarket.
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The standard is (a) whether the act was illegal, (b) the company knew it was illegal and did it anyway.
None of what you listed is relevant since it isn’t illegal for example to suppress speech or mislead the public.
> The standard is (a) whether the act was illegal, (b) the company knew it was illegal and did it anyway.
Allegedly...
The first amendment of the US constitutions says that it's illegal for the government to make a law which abridges people's freedom of speech. There are many cases of government entities working with social media companies to suppress speech as the Twitter Files have proved. As the government created and upholds those federal entities on the basis of laws, the government is responsible.
No the first amendment says:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
If you’ll humor me - what specifically did the Twitter files show in that regard?
The part where Elon's mum said she was shocked by the contents of the Twitter files and that's why she stopped being a democrat. That's all the info I needed.
Haha. How leftist/neoliberal of me to outsource my opinion! Well, in my defence, Elon's mum is more trustworthy than CNN. She hasn't lied yet.
Unlike your typical leftist, I actually keep score of such things.
The constitution does not make anything a crime
Except treason.
Sort of. It’s more of a limit on what the crime of treason can be.
As a former user of in-trade and more recently of poly market, it is so annoying that there are laws against these sites. They serve an incredibly important function: letting people learn what’s happening in the world around us by observing a single number (e.g. % win probability).
I most receently used the site yesterday to see what the incumbent Australian government’s reelection chances are after they tabled ‘ID and age requirements to use social media’ laws, but polymarket didn’t seem to have Australian politics odds, so I was left using oddschecker, which is inferior due to the annoying way it displays odds and it not storing historical data.
> letting people learn what's happening in the world around us
I think that phrasing is a bit too optimistic. Even in cases where the "prediction" cannot influence the outcome, the primary "learning about the world" involves the imputed opinions of bettors.
Betting at horse-races doesn't teach you nearly as much about horses as actually going to the stables. :P
Err, checking the line on a horse race is a much more reliable way to tell who has what chance of winning than going to the stables as a random person, and most likely for a professional as well.
Excellent point. I’d go further and say it’s likely to be the single best information, much better than consuming media about horse racing.
My point is that the "learning about what is happening in the world around us" part falls flat when what comes next is "by finding which person to copy test answers from."
I mean, yeah, you technically learn something, but the limitations undercut the sales-pitch.
If there is a better predictor than what is implied by the market then someone could make money on it. Hence the odds tend to be pretty accurate (with enough volume) because obvious edges like that tend to go to zero. A good example of that was the last election where people with access to private polls betted heavily and shifted the market one way.
This comment appears to be downvoted for ideological reasons? To me it seems manifestly true. The comment isn’t saying the market is perfect, just that it tends towards the best estimate because of incentives.
These imputed opinions tend to do a better job than traditional news. On election night, polymarket was ahead of the news channels every step of the way.
Edit: to be clear, I’m referring to polymarket essentially “calling” each swing state well before the networks did. I’m not just referring to the overall outcome.
DDHQ was also significantly ahead of the large media, and seemed to be what lead some of the moves in the betting markets. Seems like anyone at DDHQ with the fore-knowledge of the race calling could have easily front ran the betting markets. Same with Nate Silver and his daily releases. In the back of my mind I also wonder about that last minute Iowa pollster who released an outlier poll.
Any the folks running the NY Times needle.
Making these statements after the fact is tricky.
Very tricky.
I would be interested in a blog post explaining it.
The classical fallacy is attributing skill to someone who has successfully predicted 10 coin flips (or market trends) in a row, ignoring the fact that there were many other people making different predictions and there was always going to be one of them who was successful.
Of course this is true, and the observation is underpowered. However, on election night it wasn’t just about being right it was about digesting information in real time and promulgating information faster. For example, polymarket had trump at like 99% likelihood of winning when the networks were still playing “horse race”.
I am not sure what that has to do with calling elections. The Associated Press calls who wins, not some random person with $5 to throw away.
The AP does not in fact call who wins. They publish their opinion, some people trust the AP to be accurate (or not!). The election is only "called" when all the states have certified their results and the US Congress has accepted those certifications. That happens early in the new year.
Polymarket had each state at above 95% likelihood of trump well ahead of the networks suggesting he was winning each state. It’s not just calling winner, it’s ingesting information faster
When these sorts of things get in the cross-hairs of the government, it's often not so much "laws against" but rather the lack of laws / regulation. We have seen this with Poker, Crypto, Crypto Exchanges, the lost goes on. If you're operating at the edge, you probably need to be working closely with someone to make damn sure the laws are covering your ass. Or that the laws can be created / changed for the new industry. If you're not big enough to do this, then danger ahead.
The US was not founded on this "permission" mindset. It's a free country. If you are not harming anyone or violating any existing laws, you are free to build new products and services. You do not need permission from bureaucrats to invent something new!
I'm pulling examples from actual US history. If it involves gambling (or similar) or creating alternate forms of money, then watch out. You can believe that you don't need permission, then tell that to the FBI as they are raiding your house.
you don't have to tell the FBI! you get a chance to tell the judge when the FBI/DOJ presents their case against you.
There are many recent examples of fed agencies doing aggressive tactics and getting overturned in the courts (Rare Breed Triggers or Polymer80 vs. ATF, or Apple vs. FBI for forced phone unlocks). Don't let them bully you into not building something that you believe is good for society!
> They serve an incredibly important function: letting people learn what’s happening in the world around us by observing a single number (e.g. % win probability).
I've heard this point argued a few different ways, and I have to say: this is the most idiotic way of analyzing the world I can imagine. Don't listen to gamblers or people who think superforecasters are a real thing. Studying the world and reflecting on it thoughtfully will get you a lot further than these probabilities ever will.
He’ll get pardoned. It’s a Thiel company.
Counter point, Mark Cuban is an investor.
Accepting a presidential pardon requires an admission of guilt. Would being a confirmed criminal aide them in business in any way?
Public perception of what it means to be convicted has shifted with this election. Thiel of all people wouldn’t care if he is doing business with someone who is convicted, as long as they continue to make him money and push whatever agenda Thiel has.
For a crypto based business for something that crypto enthusiasts wouldn't consider a crime, probably would help.
If the alternative is prison, yes.
Incorrect. A pardon does require a conviction, however. And it will probably never get that far.
> A pardon does require a conviction, however
No.
"The President ... shall have Power to grant Reprieves and Pardons for Offenses against the United States, except in Cases of impeachment" [1]. Everything after that is, at best, case law.
[1] https://en.wikipedia.org/wiki/Federal_pardons_in_the_United_...
Can't stand these sort of arrogantly wrong comments. If you're going to be snarky about it at least be right.
Incorrect. There is no requirement that even an indictment has occurred in the past.
"I hereby pardon you for murder. Nope, you didn't murder anyone, and you haven't been indited on murder charges!"
Technically sure, you're correct. The worst kind of correct.
>"I hereby pardon you for murder. Nope, you didn't murder anyone, and you haven't been indited on murder charges!"
You have a reading challenge. GP said conviction required, which is not true. You can be pardoned for something you did but nobody knows you did it.
It can backfire though, you no longer have 5th amendment privileges because you can't say anything incriminating (you're pardon'd from the crime).
So you have the take the stand and testify.
Testify to what?
Pretty much whatever you got pardon'd for.
> [1] The pardon would have put Nixon in a difficult position on the witness stand since he would not have been able to assert any Fifth Amendment privilege when questioned about his actions as president.
[1]: https://en.wikipedia.org/wiki/Pardon_of_Richard_Nixon#Afterm...
> Incorrect. There is no requirement that even an indictment has occurred in the past.
This thread started with that statement, which is what I based my comments on.
To take the piss on it, only a fool would pardon someone for a crime of which they are not accused.
Are you implying that point?
Nixon is the typical example of somebody pardon'd without an indictment. Like it would be wise to imply it could happen because it has!
There are a other trivial examples. Confederate solders weren't indicted [1]. The Vietnam draft dodging pardons didn't even name people [2] [3].
Why they would do it? I mean to nullify the 5th amendment right. Maybe you want to prosecute a crime boss so you give somebody a pardon (or immunity) so they can't/don't plead the 5th and have to testify against them.
[1]: https://en.wikipedia.org/wiki/Pardons_for_ex-Confederates#An...
[2]: https://en.wikipedia.org/wiki/Draft_evasion#Pardons
[3]: https://www.nytimes.com/1977/01/22/archives/texts-of-documen...
Sorry, those are your examples? Besides the Nixon disaster (stop hiding behind that) and confederate soldiers, any other examples?
You're arguing, with no evidence, for a claim with counterfactual precedent. (And look up preemptive pardons. Not been done. But you're lacking imagination if you can't see the utility of a pardon absent indictment or even accusation.)
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Even a single example of something happening is abundantly adequate to demonstrate that it is not impossible.
Hence how all the draft dodgers were pardoned after Vietnam.
How then did Ford pardon Nixon?
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Please don't post LLM output as comments here.
Maybe he shouldn’t have been arrested in the first place?
> he shouldn’t have been arrested in the first place?
Was he arrested? The article only mentions a search.
Have you considered that the police or prosecutors in this case may be incorrect or corrupt?
Innocent until proven guilty is a cornerstone of our civilization. We should not shame anyone who has been searched or arrested by the police.
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I’m willing to let the government make their case, but let’s not pretend that a 6am raid from the feds is better than getting arrested.
A 6am raid from the feds is better than getting arrested. It is.
Actually, it's not. As someone who has been both raided by the feds and been arrested. Being raided is way more traumatic and gave me PTSD. Being arrested is easy as fuck. Being raided involves fully armed people busting into your home and tearing it apart and seizing all of your electronics.
Makes sense.
Would you be willing to share more about any of those situations?
I’ll add to the other comment: bursting in and searching your house will tramautize your whole family.
Compare that to an arrest warrant where you willfully turn yourself in.
I still don't understand the Polymarket business model. Why take the legal risk of $3 billion in volume as an unlicensed commodities exchange if you're not even going to get paid for it? 1% would be $30,000,000!
Idealism, probably. The objective of prediction markets is to improve the collective cognitive capacity of humankind (see Earthweb for a science-fiction exposition of this by way of a rather heavy-handed plot device). Certain people are willing to take great risks to achieve things like that, maybe including Coplan, who I'm not personally acquainted with.
See Alex Tabarrok's triumphant take from before the raid: https://marginalrevolution.com/marginalrevolution/2024/11/pr...
Here's an interesting question. We know that if a bettor in a prediction market wants to manipulate the market's prediction, it's likely to be extremely costly for them (though Théo's big bet on Polymarket seems to have shifted it a lot, so maybe we should doubt this theory). Does the operator of a prediction market have less-costly ways to manipulate the prediction?
Other than just shutting down the market permanently on Election Day, Mt. Gox style, which is an extremely profitable scam whether you manipulated the predictions or not.
> if a bettor in a prediction market wants to manipulate the market's prediction, it's likely to be extremely costly for them
About a decade ago I was told by someone on GOOG's anti-spam team that they had thought they'd finally made it too costly to spam, only to discover that political spammers just didn't care how much it cost.
That's one of the potential weaknesses in the idea. Ten trillion dollars might be too much to lose in a prediction market on how long it will take for Moscow to conquer Kiev, if it happens at all, conditional on Russia invading Ukraine; but is it too much to lose in a prediction market that could swing the US election?
Observably, so far, political spammers do not obtain ten trillion dollars per US election to spend on influencing it. Arguably this is only because they haven't found an effective way to spend that much money, and we should be very concerned that a mere 50 million dollars seems to have been enough to influence the prediction market results quite seriously in this case.
But that's not necessarily inherent to markets, even prediction markets. Foreign exchange rates were a major issue in our last election, because our rate of inflation was top in the world last year, but it isn't plausible for political parties to bet enough in forex futures markets to influence their predictions of those exchange rates—because banks bet almost 8 trillion dollars per day in the forex markets, so to intentionally maintain an irrational prediction in the market over the several months of the campaign, you'd need to be rich enough to expend roughly the entire world yearly GDP, and willing to lose it.
If sending spam required posting a bond set by the receiver, to be paid to the receiver if they decided the email was unwanted, I think you'd find that even political spammers did start to care a great deal about the cost. Until they cared, I'd set up domains with billions of potential receivers, each setting a ten-dollar bond. After the political spammers transferred their first few billion dollars to me, they'd run out of money.
> If sending spam required posting a bond ... to be paid to the receiver if they decided the email was unwanted...
Come to think of it, that sounds a lot like diplomatic exchanges during the Bronze Age: sending your ambassador along with a bunch of gifts like exotic animals and spices and slaves was an implicit way of saying "I'm confident you'll want to hear my guy out; confident enough that if you don't think his proposal is worthwhile, just keep these gifts and don't reciprocate them".
The lagniappe has many uses.
speaking of which, any chance I could get you to double check my math in https://news.ycombinator.com/item?id=42125052 ? If Jim Gray's 5 minute rule has, via SSDs, really turned into the 1 week rule, that ought to be reflected in any new OS development?
for good measure, Mark Twain on lagniappe:
> The shopman always responds; gives the child a bit of licorice-root, gives the servant a cheap cigar or a spool of thread, gives the governor—I don't know what he gives the governor; support, likely.
I'll try! I think I'll need to read Gray's paper to understand the rule; I vaguely remember that I once knew what it was.
> The objective of prediction markets is to improve the collective cognitive capacity of humankind
Do you actually believe this shit? The people running the casinos making millions off you don't.
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I disagree, I think you paint gambling in a way too positive light. We're not using prediction markets to bet on how much % of silica is in some rock a Mars rover finds, or to bet on the topology of a folding protein. This is gambling and whoever thinks this gambling is any more profound than other kinds is going to find out sooner or later.
By your yardstick, humanity is learning the outcome of sports events ahead of them happening and this is a profound world wide tool for the advancement of humanity. For me it's gambling, for that other guy too. Switching "sports event" for "election" doesn't make it more profound. And people will still kill themselves when they are at the end of the gambling spiral.
Your comment is significantly higher quality, and I appreciate that. It still has three problems:
1. I didn't make any claims about prediction markets†. I made claims about what prediction-market advocates like Shayne Coplan and Alex Tabarrok believe, because the question was what could motivate someone to operate an unprofitable one. Since I am not not currently operating a prediction market or working on a prediction-market project of any kind, it is wholly irrelevant which shit I do or don't believe about prediction markets.
Analogously, if I were to claim that the Nazis killed ten million people in death camps because they believed that Jews and Roma were subhuman, you could not validly argue that, in fact, Jews and Roma are not subhuman, and therefore the Holocaust could not have happened.
2. You do not present any arguments that the worthless comment by "FactKnower69" (!!) was itself worth posting, or even correct; you only present an argument about why you think prediction markets are not worthwhile.
Presenting any argument at all puts your comment head or shoulders above the comment I was criticizing. But "FactKnower69"'s claim was not that prediction markets were harmful; it was that advocates of prediction markets were both insincere and highly profitable, in particular the people operating PMs like Polymarket and Kalshi, and also that I am a fucking idiot. I concede that I am a fucking idiot; "FactKnower69" nailed that one entirely by chance. But, with respect to the rest of their comment, it is not only possible but actually common for people to sincerely advocate policies that are, unbeknownst to them, harmful, as well as to profit from those policies. So, even if prediction markets are not worthwhile, their advocates may be sincere and/or unprofitable.
Moreover, even if prediction-market advocates are insincere and/or profitable, "FactKnower69"'s comment contains no information tending to show that; it's just an unsupported assertion. Worthless unsupported assertions of both true and false claims are also common, so even if you were to show that prediction-market advocates were insincere and/or profitable (a task you did not attempt), that still doesn't rescue "FactKnower69"'s comment from the sewer it was born in.
3. Your argument is at least equally applicable to stock, commodities, and forex markets; "knowing" how much hard red winter wheat or aluminum will cost a year from now, or how profitable PPG Industries will be over the next few years, is even less of a "profound world wide tool for the advancement of humanity" than "knowing" who will win the US election, and those markets are also well known to cause suicide. So your argument is not a very strong argument; it would entail that those markets are also net harmful and should be eliminated if possible, which I am sure you will concede is a position far out on the fringes of extremism.
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† Well, except that I did claim that it would be very profitable for an unethical prediction-market operator to disappear with everyone's money on the eve of a major event like an election, but that seems to be irrelevant to the rest of the discussion.
If you predict exponential growth in the business, and fees in the short run will slow that growth, the utility of charging those fees is negative
CIA cutout
According to the NY Post they came in at 6am this morning and seized his phone and other electronics: https://nypost.com/2024/11/13/business/fbi-seizes-polymarket...
Heavily armed agents of the Federal Government.
That’s generally how it works.
The most likely explanation is that the issue is not election related (for example, they knowingly allowed US bettors), but that they waited until after the election to avoid even the appearance of interfering in the election
We clearly don't have enough information about what went down, but betting on political outcomes should be legal. In my opinion, at least. If you can bet on a sports game, you should be allowed to bet on an election.
Election betting is legal. But that doesn't mean it's unregulated (which Polymarket is).
Would be very meta to bet on the outcome of the subsequent criminal proceedings.
I thought thid would happen when I see Kalshi launched an almost exact copy of Polymarket but claiming following US laws. This will follow the path of Binance.
Dang - can comments from the previously flagged discussion be merged in?
https://news.ycombinator.com/item?id=42129791
Earlier: https://news.ycombinator.com/item?id=42129791
No commentary here just found it interesting that Mark Cuban recently said he was an investor in Polymarket.
daddy cuban's everywhere
>This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election
I don't even understand what the conspiracy theory is here. Why would that be something the Biden administration would seek retribution for? And even it were, how would they possibly achieve it before the new administration takes office?
It’s not a conspiracy theory. It’s a barely coded message to the next administration to pull on the FBI’s leash and/or push for legalization in the US.
“Political retribution by the outgoing administration” = “I’m the enemy of your enemy”. “Correctly called the 2024 presidential election” = “I’m flattering you on your glorious victory over our shared foe, now hook a brother up.”
Yeah, it doesn't make much sense. I think these are the (tenuous) claims:
- Many in the "crypto community" have perceive the Biden administration as hostile to it (Polymarket uses Polygon crypto).
- Peter Thiel is an investor in Polymarket. Thiel backed Trump in '16 and is often Republican aligned. Additionally, JD Vance once worked for Thiel. Thiel was a (very) major funder of Vance's senate election campaign.
- Polymarket's markets predicted Trump to win. This, to me, is the biggest stretch of all the conspiracy type stuff. But I guess it goes, "You put your thumb on the scales to show Trump was going to win. <...some causal chain of events...> We lost. Now we're going to punish you."
My guess is that it's as straightforward as: many bettors on Polymarket are U.S. citizens. Polymarket knows this and in all likelihood facilitates this, maintaining the thinnest possible veneer of plausible deniability. While betting on U.S. elections by U.S. bettors is apparently legal [1], it still requires market makers to submit to some registration process. That requirement has not been fulfilled by Polymarket. Also, in 2022 Polymarket settled a case with the CFTC for operating an unregistered derivatives market [2]. Who knows, it might just be related to a violation of that settlement?
[1] https://www.nbcnews.com/politics/2024-election/election-bett...
[2] https://www.cftc.gov/PressRoom/PressReleases/8478-22
I'm also confused, but I'd imagine that if Trump lost the election and betting sentiment on polymarket predicted strongly that Trump would win, it could be used as further "proof" that fraud occurred and that the democrats stole the election.
Polymarket probably thinks that the Biden administration is angry with them for showing how the population truly feels as all other sources are obviously corrupt /s
The conspiracy theory is that Polymarket was rigged by nefarious forces to promote Donald Trump. It was widely promulgated in the mainstream press* leading up to the election. If you view Polymarket as an illegitimate tool used to help put a dictator in the White House, not surprising the the party being being replaced would attack it.
* E.g. the New Yorker, "Polymarket has seen a recent surge in pro-Trump election bets. Is it the movement of a rational market or a concerted campaign?" or Newsweek, "Polymarket Prediction Platform Possibly Manipulated to Favor Trump"
So why not raid the corporate offices too? Why, out of all of the people and organizations involved, just the CEO?
The FBI is quite good at serving multiple warrants in multiple locations at the same time when pursuing conspiracies. Presumably, in the scenario where they are the conspiracy, they could do just as well.
It doesn't seem like a great conspiracy theory to explain what actually happened.
Polymarket is crypto adjacent, and the current administration has been going against the whole crypto ecosystem. I don't think it's just about predicting that Trump would win.
https://bitcoinmagazine.com/print/operation-choke-point-2-0-...
Can we please stop calling them "prediction markets". This only legitimizes what they really are, "gambling exchanges".
I presume you also feel strongly that people should call health/life/car/homeowners insurance "gambling?"
Because insurance is quite literally a prediction market.
Not trying to be snarky, I know certain religions actually do consider insurance to be gambling.
No, because even though insurance companies make profit, the primary motivation of insurance is risk pooling amongst the policyholders. This is not the case for those trading binary options or similar instruments (except for "hedging" - a legitimate use case of producers buying futures, for example).
This is only true because you've minced words.
An insurance company sells options contracts. We call it healthcare. It is , aside from a few small differences, the same as a put or a call.
An insurance company's day-to-day operation is indistinguishable from a derivatives hedge desk. Insurance companies absolutely take massive bets. These are managed by re-insurers.
you do not think there are legitimate hedges which can be made with events trading on prediction markets?
I think, indeed, a lot of people are effectively using the markets to gamble, but the same can be said for equities/futures.
I see no reason they shouldn't be allowed, since there are proxies that people can trade as well
I don't see anything in Polymarket's marketing material that suggests it be used for hedging.
They describe it as "profit from your knowledge by betting on future events across various topics" on their own website.
Betfair Exchange can be used to make predictions, too. They call it "implied probability" and it's always been a feature of their product.
My concern is the use of terminology to describe a gambling product as something else entirely.
Is it a prediction market than can be used to gamble?
Or is it a gambling exchange that can be used to make predictions?
Insurance is not a prediction market whatsoever, not even a little bit. A market has a buyer and a seller; Geico does not allow you to bet on how many accidents will happen in America this year.
since I like gambling on stock exchanges and table games I prefer the more nuanced term for the specific game I'm playing.
its more wasteful for some segment of our society to need a distinction between investing or gambling at all, the people they're competing against don't care, don't have any cultural limitation, religious limitation, or peer group that needs this distinction. and your "legitimizes" wording looks based on needing a distinction.
even with the "positive or negative expected value" metrics to distinguish some financial games, I've traded options contracts with a lower expected value than a table game at a casino. so just don't worry about the distinction and use our words for the specific game we're playing. prediction markets are prediction markets.
These terms are semantically equivalent.
That's overly reductive. Perhaps you missed this article that was on the front page? https://asteriskmag.com/issues/08/the-death-and-life-of-pred...
I am not familiar with the term 'gambling exchange', where'd you get it? Many 'sportsbooks' are referred to as 'betting exchanges', but that has become something of a term of art, much like the term 'prediction market'.
In any case, attempting to use a derogatory or denigrating euphemism to refer to something is usually less productive than simply exposing (what you perceive to be) its faults. What specific issues do you have with these markets/exchanges?
Not GP, but I suspect it's the gambling part? Hence the name?
Gambling is a destructive addition that the vast majority of participants cannot manage well. It harms not only them, but their children and their spouses. How many a kid's college fund has gone up in smoke? A lot of harm is done to very innocent people in pursuit of a ten second rush. (Much like all other addictions.)
I also very respectfully disagree that inventing a name for something is not productive - it's incredible effective, in fact. That's why political campaigns often favour duelling names over hot button issues: it's easier to win broad based support from soccer moms and football dads for 'marriage equality', whereas 'homosexual marriage' may be a harder sell. See also 'medicare for all' versus 'socialized medicine', 'pro-choice' v 'pro-life' etc.
These markets are no more "gambling" than other markets are.
A traditional sportsbook maintains a house vig anywhere from 5 to 15%, which is, indeed, a pretty fast path to ruin. They typically don't allow you to exit your position once you're committed.
Polymarket's sports markets, in contrast, have comparable bid/ask spreads to financial markets (maybe slightly wider), and the market is liquid such that you can sell your contract to someone else whenever you want.
> These markets are no more "gambling" than other markets are.
Whoever said other markets aren't gambling?
> Polymarket's sports markets, in contrast, have comparable bid/ask spreads to financial markets (maybe slightly wider), and the market is liquid such that you can sell your contract to someone else whenever you want.
'Financial markets' is a slippery term - you could be using it to refer to traditional investing (holding a diversified share portfolio for years because you believe in the fundamentals of the companies in question), or you could be using it to refer to things like frenetic speculating in short-dated out-of-the-money 'binary option' contracts.
The former is not gambling (no 'rush', not generally addictive, very hard to go broke, mathematically sound), and the latter is absolutely 100% gambling (all rush, totally addictive, incredibly easy to lose your shirt, mathematically stupid). There have been many attempts at 'finance-washing' straight up gambling schemes in recent years, and I wouldn't be surprised if we see more crackdowns soon.
Pretending that betting on election results is some complex financial derivative that is totally magically immune to laws about gambling isn't going to fool any judge.
IIRC There is only one prediction market with a single regulatory exemption granted for the University of Iowa and the bets are limited to $500.
The rest of what we see are (binary) event contracts (options)
Based on my understanding, which may be incorrect, they seem to be basically a rebranding of binary options which were illegal in the US for the longest time. With a clever renaming trick things now work :)
Wow, I never knew about this exchange: https://en.wikipedia.org/wiki/Iowa_Electronic_Markets
Thank you to share.
You raise an interesting point in your final paragraph: Binary options look very similar to sports betting. I was unaware that they are so strictly regulated. I found this info: https://www.investopedia.com/articles/active-trading/061114/... The weird part: In all of these jurisdictions, there is a large "structured products" market, where large investment banks structure complex derivs with (often multiple) embedded binary options (called knock-out or knock-in), and sell them to high-net-worth people via private banks. I guess the "embedded" part makes them legal? To be clear, this market is over 20 years old at this point, so if regulators did not allow, they would have stopped it by now.The structured part is because these options are most likely replicated with existing option products. A binary call can similarly be replicated with other options and packaged
But it is not derogatory or euphemistic, it is descriptive. Polymarket is gambling by any definition. Gambling is known and proven to have great harms and risks to society.
(And I got the term "gambling exchange" from the UK where Betfair Exhange basically does what Polymarket do since 2000, without the Crypto glamour.)
> But it is not derogatory or euphemistic, it is descriptive. Polymarket is gambling by any definition. Gambling is known and proven to have great harms and risks to society.
Congrats on using the worst argument in the world: https://www.lesswrong.com/posts/yCWPkLi8wJvewPbEp/the-noncen...
are futures markets gambling in your eyes because speculators can participate?
I can only speak from a UK perspective, but many financial instruments can be used in a gambling sense by retail "investors". In 2019, our regulator banned binary options, saying this:
"Binary options are gambling products dressed up as financial instruments. By confirming our ban today we are ensuring that investors don’t lose money from an inherently flawed product."
https://www.fca.org.uk/news/statements/fca-confirms-permanen....
Sound familiar?
They also highly regulate CFDs and other financial instruments that are marketed to retail.
Futures markets serve an important role outside of speculation, i.e. producers managing their future price risk. Betting markets do not.
Everything in finance is isomorphic to some combination of borrow-lend agreements. Betting markets and futures markets are functionally one in the same. The only difference is the oracles and the series of bets required to construct your position.
Agreed but can entities also use the prediction markets to hedge against events that affect them directly or indirectly?
Yes.
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That looks interesting
For context, the Biden administration has systematically harassed crypto startups these 4 years.
Typically they get "debanked" without explanation, and it's really hard to run a startup without a bank account...
This podcast with a16z co-founders Marc Andreessen and Ben Horowitz tells the stories: https://youtu.be/g4jWb-0nj44?si=_hK92xyF56lG0ezd&t=100
Good? These gambling machines are predatory and destructive institutions and needed to be shut down a long time ago. Everything a casino touches turns into hyper-capitalistic dystopia, they are the wealthy elites' worst exploitation, distilled and refined into a poison.
And now they are trying to play with society from the top-down by rebranding as "prediction markets for everything", not only pretending to sell a crystal ball but also setting up the incentives for those at the top of the financial system to destroy society and bet on the destruction of society at the same time. I say: shatter their poker chips, dissolve the house, don't allow them to accumulate any more of this type of power.
You actually have no idea how Polymarket works, right?
Why would you think I don't know how it works? Because I'm calling it a gambling machine and not hyping it up as a prediction market? Is it somehow different from all of the new sports betting sites that have wreaked havoc through the sports industry in a very short span of time? Don't fall for their dumb marketing, it's letting them spread poison.
It’s sad that something based on the Wisdom of Crowds by James Surowiecki is being politicized as gambling. It’s crucial that we have prediction markets so that we can better understand the risks of things happening in our world.
1. We do have prediction markets -- Kalshi, IB, and Robinhood all offered binary options contracts on election outcomes this year.
2. A ton of options trading is gambling, and binary options on events particularly so. Doesn't mean it should be illegal, of course, but I think that's just a facially obvious truth that we should all be honest with one another about.
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I think the key factor here is that the website allowed Americans to bet on the political market. Which I still don't quite understand, the FBI waiting until after the election for this. Why didn't they go after them sooner?
Feels wrong.
https://www.lawfaremedia.org/article/what-does-the-60-day-ru...
https://www.justice.gov/jm/jm-9-85000-protection-government-...
> " Any action likely to raise an issue or the perception of an issue under this provision requires consultation with the Public Integrity Section, and such action shall not be taken if the Public Integrity Section advises that further consultation is required with the Deputy Attorney General or Attorney General. "
Don't get stuck in a framing story.
One explanation is it gives Polymarket more rope to hang themselves with. Trading volume likely spiked in the lead up, and during, election night. Big numbers make for splashier headlines.
Another could be concern of doing anything visibly election related prior to the election, in case the winner didn’t like the action.
While I understand that logic, I also find it a bit distasteful. Law enforcement shouldn't tolerate crimes being committed on its watch any longer than necessary.
Of course, the exact meaning of "necessary" is the problem. We can probably all agree that letting a serial murderer kill more people in order to have more evidence against him would be an absolute abomination. But the situation is not that clear with white-collar crime, especially the sort of crime where the harm is not immediately obvious.
Maybe the fact that the FBI could wait that long before pouncing indicates that this sort of betting is, in fact, a victimless crime.
They probably have a different definition of what is "necessary" than you. If waiting for further crimes to be committed makes the case more of a sure thing in their eyes) then it's necessary. Or if it gives them more serious crimes to prosecute or a higher up person to prosecute. I believe this is common in organized crime investigations.
> Law enforcement shouldn't tolerate crimes being committed on its watch any longer than necessary.
That is simply not how it works and for good reason. If it were, imagine the consequences. Most charges would never lead to a trial or a conviction because law enforcement would have acted on the very first sign of criminal action instead of investigating further or working their way up the chain. We'd only end up arresting low level foot soldiers and the higher ups would get away every single time.
The wheels of justice move slowly, and for good reason.
I'm confused what your point is? Is it when cops/prosecutors build cases that take time they are tacitly saying the crime is victimless? Do you think law enforcement should only target street level dealers/car thieves because to spend time building cases against drug distributors/chop shops renders the crime victimless?
OK but what if that serial murderer were running for president? It would be wrong to deny the people their chance to be governed by a gleeful psychopath.
As HL Mencken once said 'Democracy is the theory that the common people know what they want, and deserve to get it good and hard.'
Shutting them down before the election would have been much, much, much worse.
Robinhood launched a new feature where we could bet on the presidential candidate. I've heard of a couple others too, so I think that laws were created and funded by competitors, and they defined what was legal in a way that excluded polymarket.
I think in this case, polymarket allows betting on anything, competitors got betting on the election legalized (https://www.barrons.com/news/last-minute-legal-ruling-allows...), so they get the cash from polymarket's idea then get them banned/stopped long enough to take their market share.
VC's call it Regulatory Capture, politicians call it corruption.
Polymarket could've easily registered as an exchange at any point in the last 4+ years, and then itself filed the suit that its competitors filed. Instead they chose to just ignore the law.
> VC's call it Regulatory Capture
This isn't regulatory capture. You can disagree with the regulation, but the barrier to entry here is not that high. Kalshi is like 5 years old.
"Capture" is a thing, and it does not just mean "any regulation that I happen to disagree with".
You do need capital to stand up a regulated exchange, but, then, you also need capital to stand up an unregulated exchange. And the difference between those two numbers is not nearly big enough to come anywhere close to creating capture.
You're right, I had been using a definition of regulatory capture that doesn't really fit what I'm seeing when I look it up. I learned it to mean capture of market share through regulation, either by getting your competitors banned, forced creation of consumers through law (like car seats/helmets/paper straws). Maybe someone knows what that is called?
Instead, it means regulatory agencies become dominated by the interests of those they were originally charged to regulate.
I still speculate this raid to be Kalshi/Robinhood/whomever to be going after polymarket at a prime time- the concept of betting on events got huge and the industry of event-hedging directly (avoiding the stock market proxy) no longer needs to band together to get the idea out- now it's a matter of getting all the consumers to choose your particular product vs a competitors.
The Prediction Market industry got out ahead of regulation and effectively chose their own (weak and hands-off) regulator in the CFTC. The requirements involved are not onerous. There are certainly jurisdictions where actual gambling is more tightly regulated. I am not exaggerating when I say that any pair of a good programmer and a decent lawyer could do the technical work to stand up a compliant exchange (they'd need capital, but, again, nothing insane compared to the capital you'd need for an unregulated exchange anyways).
I don't think you are at all correct about the relationship between Polymarket and other event trading venues. For one thing, Kalshi and polymarket are basically contemporaneous. For another, Polymarket plays at these games too (Polymarket has a former Commissioner of the CFTC on their board).
To the extent that Polymarket is playing in the legal grey zone, it's an active choice on their part, not a result of competitors' regulatory advantage or Polymarket's lack of access to regulatory leverage.
You seem to be anti-polymarket. I'm speculating that one or more of their competitors are behind the timing on this raid, and not offering any opinion on whether polymarket made a wise choice in not seeking regulation or whether or not they would also pull the same move on competitors.
IMO, the counters to my speculations would be that the raid was because they got too popular and the gov didn't want a million people starting up their own exchanges, or they reached a monetary tipping point the gov set to warrant a raid.
> Which I still don't quite understand, the FBI waiting until after the election for this. Why didn't they go after them sooner?
Because the conspiracy theorists wouldn't have gone to town if the market predicting Trump's win were shut down before the election?
Polymarket hit popular imagination in the summer of 2023 with the Titan submersible [1]. American political betting didn't hit papers until earlier this year. We're well within normal FBI timelines for executing a first search.
[1] https://polymarket.com/event/will-the-missing-submarine-be-f...