Effort to prevent government officials from engaging in prediction markets(merkley.senate.gov)
153 points by stopbulying 3 hours ago | 54 comments
- staplung 2 hours agoUnfortunately, 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 2 hours agoIf 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."
[-]- toss1 18 minutes agoTHIS — make it transparent, not try to ban it.
And the transparency must be real-time and MUST include the full dox on beneficial owner of the contract/bet, with steep jailtime for falsification/fronting, etc.. They can even say it is for tax purposes — they win that bet, they should pay income tax (and be able to deduct the costs of their losing bets against that specific income type).
I want to know if a bunch of senators or DOD personnel bet on event X, and I want journalists and OSINT watchers to know it in realtime. That gives everyone information while naturally eliminating most of the advantage of insider trading, since nearly everyone will pile into the same trade and the odds/payoff will come closer to the reality.
- andai 1 hour agoIt'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.)
- Animats 32 minutes agoCongress was not even notified in advance of the wars on Iraq or Venezuela. Any leaks came from the executive branch.
- treetalker 2 hours agoDon't forget relatives, useful idiots, and billionaire special envoys![-]
- 9dev 1 hour agoThe latter two groups often overlap, even
- cyanydeez 51 minutes agoI mean, North Korea has some very deadly incentives if this whole "buy your prediction" market is brought online.
- aurareturn 3 hours agoIt 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.
[-]- stopbulying 21 minutes ago> With legal betting, it's literally impossible.
Murphy v. National Collegiate Athletic Association https://en.wikipedia.org/wiki/Murphy_v._National_Collegiate_... :
> State of New Jersey, represented by Governor [Chris Christie], sought to have the Professional and Amateur Sports Protection Act (PASPA) overturned to allow state-sponsored sports betting.
How does Murphy v. National Collegiate Athletic Association affect or affirm states' rights on cannabis regulation and legalization?
Wasn't Christie against Medicalization and Legalization?
IMO it's less fun to see scared gamblers at sporting events.
A quote from the film "Two for the Money":
"See, most gamblers, when they go to gamble, they go to win. When we go to gamble, we go to lose."
- gosub100 25 minutes agoOr campaigns could hedge their risk by buying the other guy. They either win the election or get all their expenses refunded.[-]
- stopbulying 13 minutes ago> They either win the election or get all their expenses refunded.
How would that work with something like the WH Press Secretary who has refused to give back some $350K in campaign donations (though currently FEC can't prosecute any campaign finance violations because they don't have a quorum because Trump has not nominated and confirmed enough FEC commissioners.)
- stopbulying 18 minutes agoThat's like "South Park" S01E10 (1998);
Damien (South Park) - Wikipedia https://en.wikipedia.org/wiki/Damien_(South_Park) :
> The majority of South Park's residents bet on Satan to win the match due to his enormous size and muscular physique, but Satan ultimately throws the fight and reveals he bet on Jesus, thus winning everybody's money.
- romaaeterna 2 hours 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 1 hour agoYou 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.
[-]- plantain 49 minutes agoIf they're smart they'll have multiple accounts with bets each way netting to ~0 on all kinds of topics, and just omit the losing trade on the information they actually have.
- nomilk 1 hour agoI 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.
[-]- mvkel 56 minutes agoAccurate info on what? Most markets have almost no liquidity, outside of sports and crypto[-]
- nomilk 52 minutes agoPolitical outcomes is the biggest. Businesses (and individuals) can be strongly (financially) affected by who's elected. I'd been very curious in the past about political outcomes but had never used prediction markets, so I built a little tracker that inputed the probabilities based on scraping ~14 betting sites. I had to do it on a market-by-market basis, and there were lots of edgecases. Having them all in one place (or two; kalshi and polymarket) makes life much simpler.
Prediction markets have also directly affected my travel planning, helping me avoid a country that wasn't at war at the time but had (in my judgement) a too-high risk of war.
You're completely right about thinly traded markets; those are way, way less accurate. But they also offer the greatest opportunity for someone to bet the other way, which has the effect of 'correcting' the market.
- zaik 53 minutes agoElections usually also have good liquidity.
- jpmoral 2 hours agoAren't there already basic laws against officials profiting from their role?
- stopbulying 3 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.
- baq 22 minutes agothis is important from an operational security perspective and hence will probably pass. if they cared about actual insider trading they'd close that gap years ago.
- int32_64 1 hour agoThe 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.
[-]- guidedlight 20 minutes agoI agree. The market is flawed because there isn’t a guaranteed entropy.
Because of this, the prediction market will remain niche.
- CamperBob2 9 minutes agoEven in the presence of insiders, these markets may still function well as hedges.
- fkarg 54 minutes agoDoes this include the stock market?
- schnebbau 2 hours agoThe 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 1 hour agoOr, 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 1 hour agoIt doesn't break the law.[-]
- idle_zealot 39 minutes agoFrom Wikipedia[0] because I can't be bothered to read more than a few paragraphs:
> In 1909, well before the Securities Exchange Act was passed, the United States Supreme Court ruled that a corporate director who bought that company's stock when he knew the stock's price was about to increase committed fraud by buying but not disclosing his inside information.
Based on anti-fraud common law alone the court decided it was illegal for an insider to trade stocks with non-public information. An explicit law would be nice, but a reasonable interpretation of basic law would see most of our ruling class behind bars. This is only highly-contested and technical because we've let our standards slip so far.
- wizzwizz4 2 hours agoWe 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 2 hours agoIf we can't ban them from trading stocks, good luck with this.[-]
- pear01 2 hours agoDon'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 1 hour agoTo 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.[-]
- pear01 53 minutes agoAh interesting thanks for pointing out the ambiguity in my statement. I definitely did not intend that ambiguity but you also rightly point out it sort of works either way. I would think this would lead to more upvotes than downvotes but perhaps a trend of cynicism also is reflected in assuming the least favorable interpretation.
Thanks for pointing that out.
For the record, I meant the latter. Let the downvotes commence!
- ddtaylor 54 minutes agoBlindly trying things without taking signals from outcomes of the past seems like madness. If you have evidence you have failed at walking many times, should you be putting your energy and efforts into running and jumping instead of continuing to pursue walking?[-]
- pear01 51 minutes agoThat's not what I'm doing and I think you know that. Reform takes time. If everyone gave up just because things were difficult n times nothing in government would ever change. The state is not a startup. Behind every significant piece of legislation is a battle.
- tlb 2 hours agoIt'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.
[-]- ddtaylor 52 minutes agoMost criminal activity is hard to change when it's already happening. There is no reason to mollify the problem further.
- ChrisArchitect 1 hour agoRelated:
War Prediction Markets Are a National-Security Threat https://www.theatlantic.com/technology/2026/03/polymarket-in...
- dogmayor 34 minutes agoPrediction markets and crypto will continue to ride the wave while this administration is in office. But I expect prediction markets will come to be thought of as slimy gambling dens ridden with fraud no different than crypto. The cancerous "greed is good/gamble on everything" attitude prevalent today in America will come crashing down at some point. When? Who knows. The sooner the better.
But for now, make sure you get in your bets er i mean predictions on this mega important market: "Elon Musk # tweets March 3 - March 10, 2026?"[1]
[1] https://polymarket.com/event/elon-musk-of-tweets-march-3-mar...
- tokai 2 hours agoIt 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.
- sapphirebreeze 2 hours ago[dead]
- Steinmark 2 hours ago[flagged][-]
- literatepeople 2 hours agoThis is a bot account[-]
- idle_zealot 1 hour agoWhat'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 2 hours agoIs there anything we can do to make it better?[-]
- Salgat 2 hours agoStrict regulations around prediction markets for everyone. Incentives around politics, war/killing, etc need to be tightly restricted.
- ikiris 2 hours agoAll 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 3 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?"