These - especially Polymarket - should be illegal globally, as they incentivize people with power to manipulate the real world in horribly destructive ways to win a bet.
I would not be surprised if people are murdered at some point to reap the payout of some related bet.
Just because you don't like something, it doesn't mean it should be forbidden globally. We are adults, and we should be able to gamble on whatever the hell we want - even if you don't like it. Honestly, tired of all the folks trying to push their world view onto others.
Relatedly, is it OK with you if somebody bets a few million dollars on your early demise?
>We are adults, and we should be able to gamble on whatever the hell we want - even if you don't like it.
No. That's not how society works. Gambling has externalities that affect all of us.
Very close already. Death threats went to this journalist; seems someone bet on missile hits. https://factkeepers.com/polymarket-gamblers-vow-to-kill-jour...
It also incentivizes leaks from insiders, sometimes endangering others. A soldier was charged for betting on a military operation. https://www.justice.gov/opa/pr/us-soldier-charged-using-clas...
And of course throwing pro sports, but that's been happening for ages. Sports has always been crooked: eg the Eupolus Scandal from 388 BCE.
I thought this one was the most interesting:
‘Hairdryer or lighter?’: French police look at claim of sensor tampering to win weather bets
https://www.theguardian.com/world/2026/apr/23/hairdryer-or-l...
Oh man, I thought from the headline that it was going to be about a new prediction wager on the site about whether the manipulator had used a hair dryer or lighter.
That would have been perfect.
Whoever did that deserves a few years in prison. Normally I'm not too much of a friend of draconian BS - but accurate reports of temperature, air pressure and wind speed are incredibly important for the safety of air travel.
It's bad enough when such systems fail due to whatever sort of issue, but the last thing aviation needs is people intentionally blowing holes into the swiss cheese security model -.-
Yeah. You aren't allowed to set up a life insurance policy on someone else's life, or a fire insurance policy on someone else's home. For obvious reasons. But buying an event contract that pays if someone dies or someone's house burns down is fine?
being pedantic here but
> You aren't allowed to set up a life insurance policy on someone else's life, or a fire insurance policy on someone else's home
This isn't really true. Lots of people take out life insurance on others as a hedge for many reasons, small business partner is one. Same fire insurance, we had a case where someone pledged a building as collateral and we took out separate fire insurance on the building so we'd get paid out immediately.
I'm not sure where this false premise started but alot of people believe it.
The technical term is that you must have an “insurable interest” in what you insure. Both of your examples are people protecting their insurable interest. Ownership is the most common insurable interest, but there are many other ways to have one.
This is done because the insurance company wants you to prefer that the covered event doesn’t happen, which avoids some conflicts of interest.
These prediction market events don’t have the usual insurance interests involved.
Even if you have an insurable interest, moral hazard may arise - acting recklessly or other abuse, while knowing you are insured/covered. Somewhat similar to friendly fraud in retail/ecommerce.
> The technical term is that you must have an “insurable interest” in what you insure.
Yep, we're in full agreement here
Unless you short the property. Essentially, sell it now on the bet that it will drop in value later. Then it burns down and you repurchase the vacant lot and return the property to the original owner.
Evil, but most everything in real estate is evil.
And that's exactly the problem with Polymarket and such, it gives an incentive to be destructive because that's easy. Entropy is easy.
With an insurance this trick won't work, because the insurance company will notice what you are doing. Polymarket doesn't care.
> With an insurance this trick won't work, because the insurance company will notice what you are doing
This has worked well millions of times (and occasionally failed too with people ending in prison or with huge fines). Where I can agree however is that Polymarket makes that much easier.
To perhaps be a bit more pendantic.
You're not allowed to take out life insurance on someone you don't know or have a relationship (business or otherwise) with.
Life insurance on a business partner works. Life insurance on your spouse as well.
Life insurance on the leader of a random country? Unlikely
Yeah, you are being pedantic. The clear meaning is that you're not just allowed to insure arbitrary properties.
If you wanted to correct a misconception, you should provide a better, more complete understanding, not just express frustration about a misconception that doesn't even exist outside of an uncharitable reading.
In this case, that means refining the point to the more accurate model, that you need an insurable interest -- i.e. reason you don't want the event to happen, even knowing you'd get a payout[1]. Your counterexamples only work as such because that exists! If you want to fix all the people who don't have your superior understanding, that would have been a great way to help them out.
>I'm not sure where this false premise started but alot of people believe it.
It exists because it's approximately true: you can't get insurance on 99.99999% of buildings in the world because you have no insurable interest in them. And any time someone could correct that false premise, they probably just complain rather than providing the complete understanding -- exactly the choice you just made here.
[1] IMO, this is the natural dividing line between gambling and insurance https://news.ycombinator.com/item?id=13916088
No no I appreciate the pedantry, thank you for the correction
> I'm not sure where this false premise started but alot of people believe it.
It being the driving plot behind Double Indemnity probably started it. I always thought it was true until your comment, too.
Some of the prediction markets explicitly forbid payouts based on death. E.g., Kalshi refused to pay out "leaves office" when Khamenei was killed.
There are a lot of things short of death that we don't want to encourage either. There is a huge grey zone here that I frankly don't want to entrust to private entities.
Sure, I'm not a fan of prediction markets in general either. Just responding to GP's specific claim about death incentives.
Well, you are privately allowed to bet on whatever you like with another individual. That is indeed legally fine, though potentially distasteful.
Polymarket is facilitating bets between people, not bets with the house. Gambling and insurance are both bets with the house.
> Well, you are privately allowed to bet on whatever you like with another individual.
What jurisdiction are we painting with that broad brush? This is far from universally true, even in the US.
Nope. "We're just an intermediary between people" is a 100+ year old yarn that casinos and bookies have been trying to spin. If you're presenting a point of entry to a betting line and taking a cut, congrats, you're the house. Doesn't matter if you adjust the betting line manually based on intuition or algorithmically based on betting volume. Sometimes it doesn't get enforced because of corruption, but if this was the case, then why aren't there tons of independent unregulated poker casinos where players just play against each other? If you facilitate and take a cut, you're the house.
Polymarket doesn't take a cut. Their profit comes in transaction fees.
The mob boss doesn't charge me interest on my loan - he just really likes receiving expensive gifts from me.
"We don't take a cut of your bet, we just charge you a transaction fee on your bet" is reaching a bit.
To me this is technicality.
A bet is a bet, whether it's against the house or other people it's a bet.
Can you name the individuals you are betting with on Polymarket? Can they name you?
That "facilitating" argument didn't work out for Silk Road.
Because what the Silk Road did was illegal whether in person or not.
What the hell are you talking about? You are absolutely not allowed to bet on whatever you'd like with another individual. Depending on what you're betting on (for example, the price of a stock or the throw of a card), it falls under varying different regimes. This is highly regulated and has been for most of the whole of human history.
Yes, there are de minimis exceptions. Your office NCAA pool, for example, is often legal, but it has nothing to do with what we're talking about and is also irrelevant to a business facilitating it via 18 U.S.C. § 1955.
In Spain in elderly caring homes there was a tradition to bet on Bingo matches for simbolic prices (barely one or two euros, enough for a coffee and that's it). It was legalized on paper recently, but technically everyone turned a blind eye.
https://russpain.com/en/news-3/authorities-consider-legalizi...
>Rarely exceed 25 euros.
Maybe in Christmas, because the weekly play was just about low prizes.
Remember how things ended up when insurance policies on loans you didn't hold were allowed... I think there is quite a lot of good reasons to ban those sort of bets.
I've seen contracts on whether California will burn this summer.
Any bum defending these contracts is to me either a shill or way too dumb to understand the concept of incentives.
Oh and there was an Israeli journalist that got life threats because he reported that an Iranian missile struck some place in Israel, and apparently there was a huge bet on it on polymarket.
> But buying an event contract that pays if someone dies or someone's house burns down is fine?
You can sell your life insurance policy to somebody else. It's a way of getting money to sick people to use while thy are still alive.
Murder and arson are illegal. Just because there is an event contract that doesn't make them legal to do.
It's also illegal to pay someone to do murder or arson, which is easy to obfuscate as an "event contract".
> as they incentivize people with power to manipulate the real world
I would argue that the ratio between "power" and "money to be won" is too big (at least right now) for this to materially matter. No fortune 500 CEO is going to postpone a product launch so they can win $5,000 on polymarket. But some random guy will get his hair dryer to win a socially meaningless weather bet.
It's not discussed often, but the liquidity of these markets is often awful, and you can only win as much as people are willing to take the other side. Which is harder when people know it's easy for insiders (or the outcome decider themselves) to play the other side.
Basically the more socially consequential the outcome you control, the less likely you care about a betting market, and the less the betting market cares about you.
The real winners are people with little or no power to effect outcome, but with insider knowledge. And athletes.
> No fortune 500 CEO is going to postpone a product launch so they can win $5,000 on polymarket.
No, but a low paid frontline worker with the ability to throw a last minute wrench into the gears absolutely would.
They can already do this easily with the stock market.
Usually though people's pay/power directly correlates with how badly they can screw the company if they go (legally) rogue.
But anyone can get a job at XYZ, buy puts, and go and set the factory on fire the next day. Betting markets don't change the fact that you'll be arrested, except that you'll be arrested for a few thousand dollars rather than whatever you can squeeze out of options.
> It's not discussed often, but the liquidity of these markets is often awful, and you can only win as much as people are willing to take the other side. Which is harder when people know it's easy for insiders (or the outcome decider themselves) to play the other side.
You're basically arguing that there aren't enough fools to go around, when we're talking about gambling enterprises.
Not fools, these bets are usually very close to a fair market price. But people are not willing to wager millions of dollars on the temperature registered in a certain place at a certain time. Or on if hezbollah missiles impact Israel land or whatever.
The latter kind of prediction has become less desirable to bet on ever since the shenanigans around whether or not Maduro's kidnapping counted as an invasion of Venezuela.
What fair market price are you talking about? The price decided by the prediction market?
If you compare prediction market implied odds to the actual odds that ended up they match very closely
Do you have an example?
what are these "actual odds" and if you have the time machine that lets you observe the necessary outcomes to calculate them, why are you bothering with making money on betting markets?
So, what you're discussing is basically, whales are going to be the bettors and it sucks that there'll always be a bunch of marks but: No ones going to stop the whales because there'll always be suckers.
Welcome to the grift economy, take a number.
The CEO of Coinbase finished an earnings call by reading all the buzzwords you could bet on to be mention during the call. So a CEO can manipulate these things and who knows if it was just a marketing thing or if he shared his plans.
As long as he didn't place any bets, I think what he did is totally fine.
If I find out my friends placed bets on whether I'll say X tomorrow, I'm not obligated to act as if I didn't know.
So is it also okay if his friends placed a bet and shared the profits with them?
Downvotes on HN is always fascinating. Source: https://www.msn.com/en-us/money/markets/coinbase-ceo-s-bizar...
"I don't want to consider possibly living in a world in which this might be true" is definitely a specific genre of downvote.
Half this board makes way more than the head of the federal reserve or the CIA director (225k/year).
There's plenty of people able to influence events to whom these barely liquid bets can still amount to huge pay offs.
That includes many CEOs whose compensation is tied to stock performance.
> No fortune 500 CEO is going to postpone a product launch so they can win $5,000 on polymarket
They would win a lot more than a trivial amount by taking adverse positions, no? Seems like you're making up your own hypothetical
Yeah, they unironically just attacked a strawman and sat of their laurels
They can take any position they want and do whatever they want, the point is that these oddball markets are very thin so there just isn't much money there to harvest. You can only bet $50M at your chosen risk if you can find enough people to take the other side, and these markets simply don't have many participants betting much money.
Think of it like kids betting pennies what subject the teacher will open with the next day. The teacher doesn't care about winning $0.89, but the kids do.
I don't think the markets are thin, there are some bets that have made people many millions.
Correct, but there is a direct correlation between the size of the market, and the power of the people determining the outcome.
Then there is also the fact that the power of the people determining the outcome is inversely proportional to their care about betting markets.
Put this together and you get "The larger the size of the market, the less the people who can single handily swing it care about doing so".
If you are someone who can command hundreds of thousands of people to bet millions for or against you, you almost certainly lose more than you would gain by gaming it.
Mind you the market also naturally prices in this risk of the one person going rogue and taking them winnings for themselves. You will never find a market for "WarmWash will post nothing for 3 days straight on HN" because no one will take the other side of it.
It depends on the market of course. In looking it up the only markets that have ever come even close to that sort of payout are things like presidential elections where the risks of insiderism or gaming are negligible, and there's extremely large public interest in it.
Nobody's making millions betting on things like the weather.
>where the risks of insiderism or gaming are negligible, and there's extremely large public interest in it.
So what's the point of polymarket, then? If at best we get "negligible" "insiderism", how is it that we are supposed to be benefitting from this as a society the way OP and others insist that revealing insider preferences "would"
It seems like it's a huge assumption on your part that the bets you are describing are in the "0.89" range and not something significantly higher, even disregarding what others pointed out about this having already provably occurred.
> I would not be surprised if people are murdered at some point to reap the payout of some related bet.
https://en.wikipedia.org/wiki/Borussia_Dortmund_team_bus_bom...
> manipulate the real world in horribly destructive ways to win a bet
This happens on the stock market on a scale 100x larger than Polymarket.
c.f. manipulated earnings reports, taco trades, strait of hummus nonsense
I think they are illegal already in most places under the insurable interest doctrine.
Its a small step from betting on ships sinking to making sure they go down.
They are certainly critically flawed at the moment, but I still feel that with proper traceability, KYC, etc. it would be a much fairer system than the current betting companies. It’s one of those use-cases where blockchain technology actually makes sense.
Someone should place a bet on the lifespan of the polymarket founders.
Users can't create markets on Polymarket, they're all created by Polymarket itself.
Yup, that idea has been around for a while: https://cryptome.org/ap.htm
> they incentivize people with power to manipulate the real world in horribly destructive ways to win a bet.
How does the same line of argument not also suggest that stock markets be prohibited?
These derivatives openly violate the Frank Dodds act, but the head of the FTC has said they won't act.
> illegal globally
I would replace them with https://manifold.markets/ or maybe heavily regulate them. they do have practical utility in forecasting
Manifold tried real money markets for a while and quickly bailed out (I don't know any details on why).
They become hyperstition engines.
"hyperstition," TIL.
Thanks, stranger!
Can someone give a more concrete example around all this?
How do I cause someone to die using Kalshi or Polymarket, specifically, also without being caught? Didn't they catch someone that had pre-knowledge of the Venezuela campaign?
(I'm not asking because I want to do this, I'm asking because it's not clear to me how this is realistically possible.) Also, given that you can't just create a market on either platform, it's not like I can just say "XXX has 3 months to live".
If a criminal wants to make money on crime, they have better ways to do it than put 10k of their own money to make 50k by killing someone.
I just don't get this whole argument. If you're a contract killer, why put yourself and the contractee up in the feds sights?
Historically similar services have also been used to try to manipulate the real world by using bets for creating opinions. Like if you get to vote between candidate x and y and x leads by 75% to 25% on Polymarket maybe you don't vote for y even if the real numbers may be way closer.
That opens up very fast to a very expensive arbitrage (on the manipulating party)
It is marketing money so it is not even for arbitrage. And you don't need to provide all the liquidity. Just enough to tilt the result.
This is very naive. Many people have incentives to manipulate the financial markets, also with real world consequences. Should we ban financial markets as a result?
Do you really think that there are no people, who have bet on the price of something in one direction or the other, who enact real world consequences on people or other entities in order to ensure their bet? This is par for the course.
And with many orders of magnitude greater liquidity available than on something like polymarket.
Unfortunately there are ways for people to spend money on these sites. That's why the Netherlands has legalised gambling because the bad websites couldn't be stopped.
That happens already at a much larger scale, without prediction markets.
These markets decentralise that information asymmetry.
They'll be illegal anywhere democracy wants to properly function. How can I bet on this ripe assumption? Is there a market somewhere?
I would go further than this: all forms of online gambling should be banned, globally. It's probably sufficient to remove them from app stores and to remove their access to the international financial system, which is very doable.
The astute observer might say "ah but what about crypto gambling sites like Stake?". This problem isn't as intractable as crypto bros might have you believe. You simply issue arrest warrants for people who allow your citizens to gamble in violation of your local laws and you threaten any bank, brokerage or financial institution that allows them to convert their crypto in fiat currency. This is fairly easily covered by KYC/AML regimes alreaqdy. It won't be perfect. It doesn't have to be. As soon as someone can't be an open billionaire by selling crypto gambling without fear of being extradited to the US if they travel internationally, the shine disappears real quick.
> should be illegal globally
Let's not pretend that Spain of all places is caring about horribly destructive psuedo-gambling.
Banning "unregulated gambling" is just pressure to make sure that the Spanish gambling racket stays intact for the bookies already at the top.
> Let's not pretend that Spain of all places is caring about horribly destructive psuedo-gambling.
Is this intended to imply that Spain has particularly high levels of sports betting, or issues with gambling? All the stats I can see suggest the opposite, and there's already plenty of tight restrictions on local gambling businesses (sports sponsorship ban, welcome bonus ban, almost no public advertising, etc). At a quick google, it looks like the 'Spanish gambling racket' for sports is tiny, gambling problem stats far lower than UK/France/Italy, and most gambling that does happen is the lotteries etc instead, which has its sins, but is a very different beast.
Is there something specific you're getting at?
Ludopaths often try to put on the same level national lotteries with sports betting and other means of information based betting.
Not a fan of lottery myself, but at least it's just some random numbers drawn from a drum. There is hardly any dark pattern or illegal incentive there. It is just you against Thomas Bayes.
>Is this intended to imply that Spain has particularly high levels of sports betting
La Quiniela, a lottery based on soccer matches' results. Every middle aged man filled some weekly forms (win for locals/draw/win for foreigners) as if it was a religion. If you matched 14 from 15 results (much better with 15), you could get a big prize. Also, Jai Alai matches on the North of Spain had huge bets on results too.
Younger millenials and Gen-Zers will just play on RETA which is kinda the same as La Quiniela but online.
Maybe a bit out of scope for this article, but seems like in every country “Younger millenials and Gen-Zers” are turning to gambling online while traditional gambling (like Vegas) dies.
I feel like this might be a net negative from the pure speed and access in which you can lose money online vs real life, but idk.
I don’t see the need to have gambling, but if they are going to have it, I can see some merit to the idea of making sure the proceeds of these silly games at least stay local. It’s not like engineering or something, where protectionism allows local businesses to survive while falling behind the global market, resulting in worse products.
Sadly correct and I expect that many other countries will follow suit very soon, they don't really care about gambling addiction or related problems.
Maybe we should ban the stock market too.
In 2017 someone tried to bomb the bus of the BVB soccer club, after he bought puts options on the BVB stock.
https://en.wikipedia.org/wiki/Borussia_Dortmund_team_bus_bom...
You raise a good point: There's nothing intrinsically good about betting and trading venues, and the sane default option might well be to prohibit it. We allow stock and bond trading as it fulfils important functions [1].
What you describe (profiting from creating havoc by some "short" bet) is indeed problematic and is regulated.
This is also one more reason why trading should not be unconditionally anonymous. Another reason: proper trading venues have rules against "squeezing", namely that no entity may hold more than some threshold ratio of the open interest. That's obviously impossible to enforce with anonymous markets.
[1] Tradings allows individuals to time-shift consumption, it funds productive enterprises, it incentivises convergence of market price with fundamental value, which in turn is what enables efficient investment allocation, and it allows the emergence of an economy-wide equilibrium of savings and investments. Note though that all of these functions might well be fulfilled by having, say, one minute of trading a day.
Or maybe we should somewhat regulate the stock market, require identification of traders, have a regulatory body that can retroactively investigate suspicious trade patterns and determine the identity of who's behind them?
At least the stock market is supposed to have a purpose besides gambling, to raise investment for companies. (Whether it's actually successful at that is a separate matter.) And anyways, your scenario would probably be considered insider trading, and that's already banned.
That's literally the plot of the first act of Casino Royale. I'm just now realizing the irony of the title.
KYC helps here. Crypto based gambling markets bypass this.
The genie is out of the bottle. Crypto-only underground prediction markets will always exist. I think it is better to heavily regulate legal options instead of pushing them underground. That didnt work for drugs or prostitution, and it wont work for gambling.
Except it generally worked for gambling for a very very long time. The existence of a black market does not mean something should be legal. Human trafficking happens, but that doesn't mean we should legalize and tax it. (extreme example I realize, but I use it to illustrate a point)
Pushing it to black markets takes away the possibility of heavy regulation (which absolutely should be in place), and stigmatises victims (gamblers), making it harder to come clean to friends and family. I agree with your assesment that no one should even start to gamble, I just doubt that declaring it illegal will achieve that.
The US Supreme Court effectively legalizing sports betting overnight provided an almost perfect real-world experiment to test that argument. And the result?
"Prediction market" ads running constantly on both sports channels/websites like ESPN. Shortly followed by mainstream cable news like CNN featuring Polymarket stats as a routine part of their horserace polling coverage. Gambling is now an omnipresent temptation for anyone even casually interested in following sports/political news.
And now millions of young men who previously would have had to seek out niche illegal venues to gamble have several dozen different apps on their phone offering to light their disposable income on fire by clicking a couple buttons every paycheck.
Except, gambling isn't illegal here - in fact, it's very common. There are lots of casinos within a few mins walk in any city in Spain. All the prediction markets need to do is comply with existing laws.
For some reason, American companies have a really hard time following existing laws and regulations here. AirBnb and Uber both had the same approach of basically saying "Oops we didn't know" until the law (and others) cracked down on them, I'm sure someone could find older examples too, and surely tons of examples outside of Spain too.
Insider trading is already illegal. What needs to be regulated is not markets, it is politicians. Once that is done, markets can peacefully continue the way they are.
Hard disagree. In the prediction market case, we're seeing many categories of people being incentivised to act on markets: soldiers, diplomats, staffers, journalists, businesses, sports and esports teams, as a quick, non-exhaustive list.
Do you think regulation of all possible categories of people who could behave adversely to influence prediction markets would be preferable to just regulating the market itself?
Those markets are pretty much designed to facilitate insider trading
Prop betting on a transparent and equitable Exchange is a perfectly reasonable and egalitarian proposal - it's the Betfair Exchange vs Betfair Sportsbook model expanded outside of the scope of sports.
Allowing prediction markets to overlap with criminal incentives is a platform TOS and moderation problem; not a prediction market or betting exchange problem.
> Allowing prediction markets to overlap with criminal incentives is a platform TOS and moderation problem
What in the fuck are you talking about? This is a public policy problem and has been literally for 3,000 years.
It's one of the oldest and most pervasive public policy problems that has spanned nearly every culture that's existed since there was culture.