Senators demand crackdown on wildfire "prediction market" bets

Posted by cdrnsf 1 day ago

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Comments

Comment by sixQuarks 1 day ago

This is insane. Predictive markets should already be illegal in the first place but to allow things like this is just insane

Comment by kelseyfrog 1 day ago

Prediction markets allow us to quantify risk. (Un)expectedly we learned that the existence of a prediction market for an event increases its risk as long as someone capable of triggering the event stands to gain financially from its outcome.

Comment by toasty228 1 day ago

> Prediction markets allow us to quantify risk.

Might as well derivate it from existing casino's roulette games, it's not like anyone betting on these are subject experts.

It's pure greed and fomo, sprinkled with a bit of cheating and corruption.

Comment by kelseyfrog 1 day ago

Theoretically, being a SME means having an edge with which one can extract money. Agree or disagree? Why?

Comment by csb6 1 day ago

So what is the rational reason someone who isn't a subject matter expert (assuming that's what you mean by SME) to bet in prediction markets? The platforms appear to be marketed to the general public to be used casually as a way to make quick money.

Someone who is a "subject matter expert" (and given how specific many of these predictions are, being an expert usually means you are an insider with non-public information) can indeed make money as long as a bunch of idiots with worse information place bets thinking they know the outcome. This is considered to be a crime when done with other securities.

Comment by kelseyfrog 1 day ago

Whats the rational reason people buy lottery tickets, participate in sports betting, or any other EV<0 activities? Their irrationally is SMEs' edge.

Comment by csb6 1 day ago

They do it because they get a dopamine hit from doing it, have superstitious beliefs, or have delusions that they can predict events they have no information on.

Interested if you believe insider trading of stocks should be legal - aren't insiders just providing the market with more information about that stock?

Comment by SaucyWrong 1 day ago

Disagree. I don’t need to be a subject matter expert on the environment or fire risks to profit from a wildfire prediction market. I need enough money to buy a pack of cigarettes.

EDIT: I suppose I also need to be able to purchase the “shares” in the “market”

Comment by csb6 1 day ago

A wildfire prediction market seems like a spectacularly bad idea. Essentially incentivizing arson.

Comment by claudetard 1 day ago

No, they're just gambling, and crime markets.

Comment by TitaRusell 1 day ago

This is nothing new. Shipping magnates used to send out old ships into storms and collect the insurance. Sucked for the crew ofcourse.

Comment by paxys 1 day ago

It is not unexpected but something people have been shouting about since the idea was first floated.

Comment by autoexec 1 day ago

These senators who don't want people to gamble on, profit from, and create/fuel horrific disasters all have Ds after their names while the person they're begging to do something to stop this, Michael Selig, has an R after his name and also worked as a corporate lawyer for cryptocurrency firms and prediction markets before he was appointed by Trump to regulate those same industries.

This "demand" letter will be ignored, or at most laughed at. The letter is just a PR piece, a reminder to the public of who wants to help them instead of profit off of them, but it's not going to solve the problem. I sure hope they plan on doing a lot more than signing a strongly worded letter.

Comment by jumpinjack710 1 day ago

[dead]

Comment by colingauvin 1 day ago

Is there any niche yet capitalism has not exploited to its fullest? Why do we think it wouldn't here?

Comment by kelseyfrog 1 day ago

Is there not a prediction market for senator crackdowns too?