Gambling on the Wisdom of Crowds Is a Bad Bet
Jacobin • • business
Key Points:
- Donald Trump cited political prediction markets (PPMs) as evidence of his strong chances in the 2024 US presidential election, despite not fully understanding how these markets function; PPMs are digital platforms where traders bet money on political outcomes, with prices reflecting implied odds.
- The US government recently liberalized PPM regulations, increasing legal betting limits from $850 to $7 million, following a court ruling that the Commodity Futures Trading Commission (CFTC) lacked authority to restrict large-scale, for-profit PPMs; Trump-affiliated entities like Truth Social and his son Donald Trump Jr. are now involved with major PPM firms.
- Advocates claim PPMs harness the "wisdom of the crowds" to produce superior forecasts, but
