These betting markets create a wild new perverse incentive to power. No need to get gifts from business interests. Just be in the room where it happens and extract piles of cash from betting markets.
These markets claimed to be useful tools for discovering truth. I'm not sure what being able to maybe predict a military strike a bit earlier provides to society, but I do know that creating a system for near-unlimited wealth extraction for those with power is a very bad thing.
Just ban these services. There’s no legitimate purpose in betting on people being shot or blown up. And the only people who could win reliably, are the people doing the shooting.
It was pretty obvious it would happen this weekend, no corruption needed.
The Iran protests happened, Iran massacred a bunch of protesters, Trump said "Help is on the way". Then US aircraft carriers started moving towards the middle east. Trump started negotiating with Iran, making demands Iran would never agree to. Trump gave his usual ultimatums, aircraft carriers finally got into position, Iran still being belligerent, and nearing the end of Trump's ultimatum... Like, all the signs were there. There's a strange consistency to Trump's erratic behaviour...
I mean Trump did say he was going to. It's not an outlandish bet.
Also this needs waaay more information before you can say if it is statistically significant. How much did they stand to lose? How many other people made similar bets? Etc.
When I worked the military (not the US), we'd get some briefs from time to time on risks like espionage. They'd present us with cases, and It always surprise me just how little money people are willing to risk their lives and careers for. You'd think people that are willing at worst to become traitors, but at best break confidentiality laws - and face years in prison - would do it only for life-changing money. Nope, not even close. People have gone to prison for a fraction of $500k.
If someone truly made this bet with inside information, they for sure broke laws. Not only did they do that, they could have jeopardized parts of the mission.
No doubt in my mind, part of OSINT gathering for most intel agencies is to monitor these betting markets.
Has anyone analyzed the odds on particular days to see if there’s a chance that the timing was influenced by the amount to be made on the betting market and not the other way around?
Maybe, but also the strike was super telegraphed. It doesn't take a genius to figure out that when USA pulls its embassy staff from israel, britian pulls its embassy staff from iran and USA creates the biggest build up of military hardware in the region in 20 years, that shit is about to go down.
Especially when everyone notices the polymarket bets that win big but nobody notices the ones that fall on their face. There is huge survivorship bias in these sorts of analyses
Ummm, why? Obviously you'd only bet if you were planning on claiming the attack publicly shortly afterwards, so maybe you'd see some bets from Bin Laden and associates. If say a CIA operative had prior knowledge of the attack, do you really think they'd risk placing a bet? Besides, what would they even bet on? "Will there be a surprise terror attack that nobody expects in 2001?" or "Will the US suddenly decide to invade Afghanistan" or what?
This may be an unpopular opinion, but calling it insider trading misses the entire point of what prediction markets are built for.
The goal of a prediction market is to be able to forecast the future as accurately as possible. Restricting informed traders weakens the mechanism that makes them useful.
Money signals how strongly someone believes something will happen.
It might be aligned with the purpose of the market, but I have to ask, what exactly is the reason that a non-insider would ever make a bet? You know beforehand that insiders will sit on the information until just before it goes public (the larger the public sentiment against a certain position, the more you make by betting on it with hidden information). Likewise, there's a negative incentive for insiders to release information, and allowing the "forecasting of the future as accurately as possible" to actually happen.
Like, if I know a month ago that the US will invade Iran, and I make a big bet on "Yes", then that of course gives people information, which in turn negates my edge. So it's entirely self-defeating. It's actually way better to try to convince the general public that it won't happen through non-market means, or perhaps even buy a few "No" shares just to drum up public opinion. You'll get that money back anyway once the bet resolves.
Just imagine: the boxing champ is planning to take a dive in the third round. You think he'll make his bet a week in advance?
It's a funny balance between insiders and outsiders. I would say for events like this, it's not even clear where line is, in a way that is very clear for public companies.
Clearly, a staffer in the MoD who knows what's going on and places a "bet" is bad. But is "private" information even well defined here? If a well funded HF asks 50 staffers "is Iran going to be invaded today", they all say "of course not, we're negotiating" but 3 look uncomfortable, is that MNPO? If a civilian provider, not sworn to secrecy, receives a large order indicative of some military action, then places bets, is that insider trading?
My point is less that it's fine, and more that it was a good thing to keep them banned, until and unless we figure out a better way to regulate them.
Public markets are different because the concept of "insider" information is so clearly defined and almost central to all information processing. Government business has other priorities than "how to we keep all gamblers chances equal".
The part people miss about these 'insider' Polymarket trades is how little capital it actually takes to make these kinds of returns on binary contracts. On most non-headline events the orderbook has maybe 5-10k of depth at the top of book. A new account dropping 50k into a 5-cent yes contract right before news breaks isn't sophisticated -- it's someone with information and a Metamask wallet. The CLOB structure makes it trivially easy to trace these wallets on-chain though, which is arguably better transparency than you'd get in trad finance.
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[ 2.7 ms ] story [ 47.7 ms ] threadThese markets claimed to be useful tools for discovering truth. I'm not sure what being able to maybe predict a military strike a bit earlier provides to society, but I do know that creating a system for near-unlimited wealth extraction for those with power is a very bad thing.
"harmless betting" for thee
https://x.com/pearsonm103/status/2028176543264969145
The Iran protests happened, Iran massacred a bunch of protesters, Trump said "Help is on the way". Then US aircraft carriers started moving towards the middle east. Trump started negotiating with Iran, making demands Iran would never agree to. Trump gave his usual ultimatums, aircraft carriers finally got into position, Iran still being belligerent, and nearing the end of Trump's ultimatum... Like, all the signs were there. There's a strange consistency to Trump's erratic behaviour...
Also this needs waaay more information before you can say if it is statistically significant. How much did they stand to lose? How many other people made similar bets? Etc.
As it stands this is not a story.
If someone truly made this bet with inside information, they for sure broke laws. Not only did they do that, they could have jeopardized parts of the mission.
No doubt in my mind, part of OSINT gathering for most intel agencies is to monitor these betting markets.
Especially when everyone notices the polymarket bets that win big but nobody notices the ones that fall on their face. There is huge survivorship bias in these sorts of analyses
The goal of a prediction market is to be able to forecast the future as accurately as possible. Restricting informed traders weakens the mechanism that makes them useful.
Money signals how strongly someone believes something will happen.
Like, if I know a month ago that the US will invade Iran, and I make a big bet on "Yes", then that of course gives people information, which in turn negates my edge. So it's entirely self-defeating. It's actually way better to try to convince the general public that it won't happen through non-market means, or perhaps even buy a few "No" shares just to drum up public opinion. You'll get that money back anyway once the bet resolves.
Just imagine: the boxing champ is planning to take a dive in the third round. You think he'll make his bet a week in advance?
Clearly, a staffer in the MoD who knows what's going on and places a "bet" is bad. But is "private" information even well defined here? If a well funded HF asks 50 staffers "is Iran going to be invaded today", they all say "of course not, we're negotiating" but 3 look uncomfortable, is that MNPO? If a civilian provider, not sworn to secrecy, receives a large order indicative of some military action, then places bets, is that insider trading?
My point is less that it's fine, and more that it was a good thing to keep them banned, until and unless we figure out a better way to regulate them.
Public markets are different because the concept of "insider" information is so clearly defined and almost central to all information processing. Government business has other priorities than "how to we keep all gamblers chances equal".