You’d think so, but these types of people are afraid of stocks or options and find prediction websites easier to use.

It is easier for the SEC to investigate futures, stocks & options. Some of the prediction/gambling markets use crypto and do not participate in "Know Your Customer" regulations.

Honestly not that big a difference here. Both can be loosely interpreted as gambling, especially with the same rough upsides (money without production or consumption!) downsides (addiction, critical existence failure of all your savings) and the corruption and perverse incentives they invite.

Consider the kind of people who would staff this white house.

These companies were blatant about operating illegally in the US. I remember being shocked to see the live billboard polymarket ads in Philadelphia on the eve of the election. I guess there are too many scandals these days for this to stand out.

You need to apply it to staff as well and also the judicial branch and all of their staff. Then to all of their family as well.

The way I understand insider trading is usually prosecuted is you find out who made the bet & then you have to track down their communications to see if they got tipped off.

There is currently a bill proposed to do that (for stocks, not prediction market betting, but eh it's a start): https://www.govtrack.us/congress/bills/119/hr5106

It currently has 99 Democratic sponsors and 33 Republican sponsors. It will probably not make it out of committee. 2 of the 4 Democrats on the committee have sponsored it; 0 of the 8 Republicans have.

> So who are the suckers who are losing all this money?

Random people who saw an ad or their favorite influencer shilling it.

Like when my neighbors started asking me about NFTs.

Kind of what I was thinking. If it is essentially InsidrBetz.com why bet at all? This is the kind of thing that could (should, anyway) kill the industry.

Arrogance / hubris. Some people even if they know it's rigged will believe they know which side the insiders are on

I remember reading something awhile ago in regards to why people were investing in NFTs when it seemed so clear they were a scam. The gist of it was that it's easy to get into cryptocurrency, but it's hard to get out. KYC, taxes, age requirements, currency fees, etc are enough of a barrier that many people would rather just keep those assets in virtual space. Polymarket is the answer to the question "Well what else am I gonna do with this crypto I own"

The same goes for stock market too.

"But we have laws criminalizing insider trading..." the only proper response to this is: hahahaha.

People go to casinos despite knowing the house has the edge in games. Gambling is addictive.

There's no shortage of people willing to make extremely poor financial decisions on games of chance, it's why gambling was heavily regulated. Visit a casino and witness addiction in-person, it's a sad sight.

Prediction markets are ridiculously diverse so it’s quite a stretch to say that imo.

Hedging is one rational reason.

The ads for prediction markets on TikTok are aggressive - like (paraphrasing) "this is your new source of passive income and you'd be crazy to miss it" aggressive.

It is either not being offered in depth by anyone market-maker (part of the answer given the relatively small revenue opportunity) or it is being offered by people who aren't sophisticated enough.

Bookmakers offer markets on events where someone can know the outcome. The difference is that they have tools to prevent adverse selection.

Prediction markets offer none of those protections so the market structure is going to end up being very different (which is already happening, revenue opportunity from politics isn't huge). There are other examples of this around latency arb, market is going to be very different.

Also, I will point out that most insiders are probably going to be losing money too. All that you ever read is the final outcome, you don't read the stuff that happens before. Politics is, generally, not a good market because the actual event is driven by decisions made by people. Election markets are fine but political event markets are not good, even if you have inside information.

If it were in the law, which part of the justice system do you think would be:

1. Capable

2. Desirous of

3. Competently followed

It is in SEC regulated markets like NYSE and NASDAQ. But prediction markets are grifty garbage. Insider trading laws only apply to regulated markets.

Just about anything to do with crypto is sketchy. I don't know why anyone still messes with it. Maybe they just like propping up Iran's oil tolls, ransomware perps, and shovelling money to Dumpty and his merry band of grifters?

Reminds me of our President (SA) asking his colleagues to sign a pledge not to do corruption; when there's already a swearing in that does the same thing.

One of the weaknesses is incentivizing people to do horrible things, if that makes their bet a wining one.

It also incentivize people to follow the events and remember stuff so that they are better equipped to make predictions.

I think it incentivize people to use their head and may be even select better leaders.

Like the stock market?