People used to bet on ships sinking and sailors drowning. Till they learned better.

Edit: This was common until Parliament passed the Marine Insurance Act of 1745.

Before that, speculators could take out "wagering policies" on vessels they had no connection to. This created "coffin ships" - unseaworthy vessels sent to sea because the insurance payout for a wreck was worth more than the ship itself. The law introduced "insurable interest," meaning you cannot bet on a disaster unless you stand to lose something if it happens. This removed the incentive for sabotage and murder for profit.

Modern prediction markets are heading toward the same problem. Betting on train delays or bridge collapses without having any stake gives bad actors a reason to cause it. If the cost of sabotage is lower than the payout, the market effectively pays for the disaster to happen.

Whoever downvoted this wants you to ignore centuries of legal precedent designed to prevent exactly this kind of blood money. Those who ignore the lessons of the past learn wisdom in blood... https://en.wikipedia.org/wiki/Coffin_ship_(insurance)#:~:tex... https://en.wikipedia.org/wiki/Marine_Insurance_Act_1745#:~:t...

They still do, they just call it insurance.

Could you elaborate?