Effort to prevent government officials from engaging in prediction markets
merkley.senate.gov

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113 points

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stopbulying

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2 hours ago

35 comments

staplung ・ an hour ago

Unfortunately, it's not just elected officials that are problematic for prediction markets. The Secretary of War, for instance is not an elected official nor are leaders of the armed forces and there is definitely a prediction market for war. Multiply this by every powerful appointee and every career bureaucrat and see what kind of picture that paints.

  • lukev ・ an hour ago

    If we're not going to ban prediction markets, we could at least make it a requirement that all bets are public and associated with a real identity.

    That'd go a long way towards curbing the corruption of these things, while preserving (or even greatly enhancing) their "predictive power."

    • SteveNuts ・ 35 minutes ago

      Seems like you’d get a secondary proxy market popping up overnight. Like domain privacy for degenerates.

      • gruez ・ 22 minutes ago

        That's why you make the regulations like AML regulations, where it's a crime to obfuscate the source of the wager too.

  • andai ・ 22 minutes ago

    It's also low-ranking members of the armed forces that have a lot more information than you'd expect. If you just banned the high ranking members from prediction markets, I actually don't think very much would change. (There would just be slightly more delay.)

  • treetalker ・ 40 minutes ago

    Don't forget relatives, useful idiots, and billionaire special envoys!

    • 9dev ・ 2 minutes ago

      The latter two groups often overlap, even

nomilk ・ 8 minutes ago

I recall a few finance papers saying (paraphrasing) "approximately all private info is reflected in stock prices". The same is obviously true of prediction markets. If government officials are banned, they'll just give a little wink to a relative or friend, and the prediction markets will reflect the private information.

On a personal note, I find these markets incredibly useful in day to day life. There's been a joke for a while that putting site:reddit.com in your google search is the only way to get (some) real information. It's becoming true that putting <search terms> AND (kalshi OR polymarket) is how to get accurate info.

romaaeterna ・ 40 minutes ago

> A Mystery Trader Made $400,000 Betting on Maduro’s Downfall

> Prediction market trader 'Magamyman' made $553,000 on death of Iran's supreme leader

  • soared ・ 22 minutes ago

    You can review that user’s trade history. It’s a bit weird for sure, but they didn’t just stop in to bet on those. They’ve bet huge sums on every prediction relating to Iran, Israel, sp500, recessions, etc.

    They’ve been betting for 2 years but only recently starting profiting a lot.

    https://polymarket.com/profile/%40Magamyman

aurareturn ・ 2 hours ago

It makes sense to ban government officials from betting. It's hard enough to enforce insider trading. With legal betting, it's literally impossible.

Another worrying issue with betting is just how prevalent the last election was in betting markets. In elections won by thousands or even just hundreds of votes, betting markets can skew results where betters vote for someone just purely for the bet and persuade, shill for the person they bet on.

I can imagine betters placing a bet on a candidate and then launching a defamation campaign against the other.

jpmoral ・ 34 minutes ago

Aren't there already basic laws against officials profiting from their role?

stopbulying ・ 2 hours ago

> Following multiple public reports on the growing influence of prediction markets and their potential for corruption, Merkley and Klobuchar introduced the End Prediction Market Corruption Act — a new bill to ban the President, Vice President, Members of Congress, and other public officials from trading event contracts. The bill will ensure that federal elected officials maintain their oath of office to serve the people by preventing them from trading on information that they gained through their role.

int32_64 ・ 11 minutes ago

The prediction market trend will "work itself out".

It will become common knowledge that these platforms are exploited by insiders so people "trust" apparent flagged insider bets, so people will try to piggyback insiders, then it will be revealed that a sophisticated party with infinitely deep pockets burns massive amounts of cash to manipulate odds and these piggybackers will be burned badly, so in the end classical gambling and sports betting will resume as preferred ways for gamblers to lose money because of their disgust with the manipulation.

trinsic2 ・ 27 minutes ago

How is any of this going to get passed without enforcement of anti-trust and an end to citizen united?

  • gruez ・ 19 minutes ago

    What does anti-trust enforcement and citizens united have to do with being able to pass laws on insider trading?

schnebbau ・ 35 minutes ago

The answer is simple - you price in the chance that an insider could have an edge on you when making your prediction. It's all part of the game.

  • idle_zealot ・ 31 minutes ago

    Or, and I beg you to consider this radical position: we arrest people who break the law (insider trading is illegal) and those who knowingly help them to do so (the operators of the prediction markets).

    How quickly we accept the death of even the ideal of rule of law in favor of embracing a return to an explicit rule by might, fuck-you-got-mine mentality.

    • GaryBluto ・ 25 minutes ago

      It doesn't break the law.

  • wizzwizz4 ・ 32 minutes ago

    We also care about the world outside the prediction markets. If decision-makers have an incentive to "throw the match" by making surprising decisions, that will impair the decision-making, which will affect the rest of us. Likewise, sufficiently-wealthy actors will be able to manipulate the behaviour of officials by betting against the behaviour they want to see, much like an assassination market.

ronsor ・ an hour ago

If we can't ban them from trading stocks, good luck with this.

  • tlb ・ an hour ago

    It's easier to ban things before they become entrenched than after. Banning stock trading is hard today because most senators have been doing it for years before getting elected.

    I'd be in favor of senators doing prediction markets, just limited to small dollar trades so they can get better at predicting.

  • pear01 ・ an hour ago

    Don't be needlessly cynical.

    This is a good effort. So is the ban on stock trading. This administration is such that it is bringing corruption to the fore in a way not seen in generations. Things are always hard to pass at the start. Keep pushing and this administration will create a massive opportunity to swing the pendulum if we can (as hard as it is now) retain some optimism.

    • matthewfcarlson ・ 20 minutes ago

      To the people downvoting you, you just said the administration is bringing corruption into the public view. Some people believe they are exposing and some believe they are currently doing it. Either way, corruption and profiting off of a political position is certainly top of mind for many Americans atm.

tokai ・ an hour ago

It wouldn't be a problem if the law was actually applied to prediction markets. If crime is de facto already legal, more laws seems like the least of ones worries.

Steinmark ・ 44 minutes ago

[flagged]

  • literatepeople ・ 36 minutes ago

    This is a bot account

    • idle_zealot ・ 26 minutes ago

      What's the HN policy on LLM-generated comments and linked content? There's so much of it on the front page and in threads that I feel increasingly like I'm in a crowd of machines chasing karma points rather than seeing what people think or care about. Is the engagement also botted? Or can people just not tell? Or do they not care and reply to the obvious robot anyway?

  • ferfumarma ・ 33 minutes ago

    Is there anything we can do to make it better?

    • Salgat ・ 32 minutes ago

      Strict regulations around prediction markets for everyone. Incentives around politics, war/killing, etc need to be tightly restricted.

  • ikiris ・ 38 minutes ago

    All of these things were managed by the SEC before it was defanged. You don't need 47 laws, you just have to enforce the basic behavior ones. We don't. Nothing else will fix this.

themafia ・ 2 hours ago

> you have the perfect recipe to undermine the public’s belief that government officials are working for the public good

The public already does not believe this. Less than 25% approve of your work.

> This legislation strengthens the Commodity Futures Trading Commission’s ability to go after bad actors

And this is designed to "increase trust?"