Though it’s not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green.
Gambling is a hell of a drug and there are good reasons why it is illegal in so many places. Prediction markets have some good externalities (information), but it’s another addictive outlet for those vulnerable to gambling addiction.
More like a tax on being ethical or having any morality.
The good point of prediction markets is that they provide information. This information is available to everyone, for free, which benefits everyone.
Insiders help achieve this. Insiders have information and by participating in the market they then expose and share that information. So this is good. If we ban insiders, we're just banning accurate information from getting into the market. If we do that, we might as well just ban prediction markets altogether. I don't have a strong opinion either way on that, but a prediction market without insiders is pointless.
Because they are grossly mis-priced for anyone mildly informed.
Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.
The reason it works better is because in a prediction market, the person betting against you has no resources or ability to go after you for fraudulent behavior. Whereas an insurance company has both.
Insurance works on repeatable, predictable risks based on models.
You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.
If people who do the obvious trades (sell oil right now - it's going down) lose money, all you have to do is do the opposite (buy oil right now - it's going down) and gain money. Is it not that simple? You will profit along with the insiders when Trump blockades the strait again, although you won't have such perfect timing.
Most of the other prediction markets seems rather stupid to me (they are completely detached from any real world activity), other than their prices being a fairly reliable source of information for bystanders.
You just described what is happening, you didn't actually provide any reason for why this is good for anyone but the individuals profiting from it.
As usual, it's a tax on naive and those who get addicted; the twist is that they are willing to pay it, demand and beg to pay it, so providers spring up, legal or not.
> WONG: However, Gerry says most of the major airlines in the U.S. eventually soured on fuel hedging. One reason - the Wall Street transaction fees to make these hedges got expensive.
> WOODS: Plus, Gerry says the airlines found that they could make money the old-fashioned way by raising prices. Today, none of the major airlines in the U.S. are hedging.
Hedging is one of those things that sounds cool but then when your service is x% more expensive than a competitor and you lose customers you just stop doing it. It's kinda like being on AWS; when everybody has an outage together nobody asks "oh what can be done differently".
[1]: https://www.npr.org/2026/03/27/nx-s1-5759203/fuel-hedging-on...
If your go-to reasoning for why we need prediction markets is so airlines can have more predictability in their fuel costs, you're inadvertently making a solid argument that we don't actually need prediction markets. And this isn't even getting into the other ways these airlines could satisfy the same need.
Politics is already full of these pay to play incentives but now anyone with enough cash can influence world events.
Go on, I'll wait for those "merits"
This is a product of a secular neoliberal culture (certainly including this website) that there is no 'society', really, or at least nothing that's BAD for society - effectively the same thing. If profit is king above all else, there's nothing wrong with vice, with scams, anything to chase the bag. It used to be that neoliberals understood community, but even suggesting that the health of society exists is considered reactionary now.
It helps that some states are bringing criminal charges vs these companies. But it looks like a no contest as to how we'll look back to these kinds of things in 5 years.
Betting on war is war, you may argue that it's an individual's right to participate in war, (I don't think so, I think that it's a war crime for unmarked civilians to participate in war), but funding bellicose action is war.