Corporate employees abusing trust are doing it equivalently whether they trade securities or place bets. Government employees, similarly, don’t personally own the country’s data.
In a minority of cases, the information is one’s own, e.g. bets on how many times a person says a word. But most of the time, there is a breach of trust.
So now it's public servants military power, congressional power, and they look to enrich themselves with making (or lobbying for) decisions which affect the outcome of a bet.
You could imagine an army general that lobbies for the bombing of Iran knowing the president has his ear, and then bets on the bombing of Iran by March 2026.
But the crime the article is talking about isn't "abusing trust", it's insider trading. Insider trading is defined in a specific way. For one, as far as I understand it, it must involve securities.
Corporations depend on controlling the compensation to their employees in order to incentivize them to produce benefit to the corporation. If there is an uncontrolled route to compensation via a prediction market, then the corporation loses its ability to trade compensation for alignment with its objectives.
> The prediction market not existing would not make the insider any less of an insider
Correct, but the prediction market existing makes the insider less of an employee. (Actually, the prediction market not existing would make the insider more of an insider, in that if insider benefit via prediction markets is unregulated, corporations will be forced to limit the information and authority of its employees.)
I can think of a few very good reasons you would want to prohibit insider trading on prediction markets. Betting on war outcomes; being incentivised to commit war crimes or throw vital operational goals for financial gain. Wagering on public figures' jobs; being incentivised to harm them.
"As a general matter, DCMs are reminded that section 5c(c)(5)(C) of the CEA provides that the Commission may determine that an event contract is contrary to the public interest if the contract involves, among other things, assassination, war, or terrorism."
The guidelines are at https://www.cftc.gov/csl/26-08/download
No, they have a different reason. Consider the consequences of a sufficiently large prediction market bet on whether or not <head of state> will be assassinated this year.
Consider also the consequences of insiders and decisionmakers having an immediate financial incentive to take the other side of a bet whose outcome they control.
There is a RFC on Bitcoin talk from 2011 https://bitcointalk.org/index.php?topic=26350.0