If an insider with large amounts of capital makes a big trade, you also end up discouraging other trades. Once you see a huge position taken, LPs are going to scale back their liquidity in other positions to manage risk that the insider is going to stomp them. Any trader monitoring position sizes is going to probably scale back their trading. All of this contributes to less trading and less commission on these markets.

> Since those who are predicting have to now construct their bets such that they know they can always get run over by an insider.

The average person does not do this. People trade individual stocks all the time, despite every other market participant (banks, hedge funds, etc.) having better information and technology.

It's why institutions like Citadel pay for retail order flow. They know that retail traders don't have an edge and, if anything, often end up being negative signal.

It’s not a libertarian argument for prediction markets that they should have insider trading, it’s the point of the exercise. The way they work is to incentivize people with knowledge to externalize the knowledge to the market. The concept of fairness doesn’t even make sense in that context.

So if a market is trying to maintain a veneer of fairness it’s just using a prediction market as cover and is something else.

> one could be forgiven for assuming federal crimes committed by this administration will not be prosecuted while this administration is in power.

Nobody in this administration is going to be prosecuted no matter who is in power.

https://archive.is/TpLqO

IANAL but a proud American haha, and we're very specific on not allowing ex post facto laws per our constitution. It would be a huge avenue for abuse of power by the government against the people.

The caveat I added to my initial comment that you also mentioned was that they could try to find a relevant existing law and retrofit it, e.g. general securities laws, and say that this is a securities market and so this has always been illegal — but it's very unlikely and I doubt it would work. Far, far more likely that we pass explicit laws about this.

The executive branch executes laws (prosecutes crime) under its own interpretation of the law. It's the supreme court that determines if that interpretation is acceptable or fair. I.e. you could be prosecuted under an executive's interpretation of an existing law when the crime was committed and if the court deems it acceptable you could be found guilty by a jury. (In the USA)

They absolutely cannot make it a retroactive crime. This isn't so much con law as high school civics in the US.

“Retroactive” crime is as you say, ex post facto, and specifically disallowed by the US Constitution.

No, you cannot retroactively make something a crime as you have found.

That way lies madness.

If the govt could do that, they could arrest anyone, anytime simply by making whatever they did yesterday retroactively illegal.

It makes them more accurate at the time the insider places the bet. But to maximise profit, they are incentivised to misdirect before they place the bet (and worse still from society's perspective, are incentivised to take counter-intuitive or downright harmful actions to profit at the expense of people who bet on the view that it made no sense for them to do that)

You can be an outsider with expertise, in which case you can still beat the non-expert outsiders.

So now who are the non-expert outsiders and why would they bet? Outsiders who think they are experts but are wrong.

when have we ever defined gaming/gambling as 'a thing where the house takes a rake' ? I don't understand this argument and it always feels disingenuous when brought up.

On the Polymarket homepage right now, one of the featured markets is whether or not Bitcoin will be up or down over the next 5 minutes. It's hard to justify that as anything more than illegal gambling.

I find prediction markets to be interesting on two fronts:

1) They like a really good way to determine the probability of something happening, which is interesting for events like elections

2) It provides an avenue for smart bettors to take advantage and sharpen their skill, whereas they get severely limited or banned from traditional sports books

However, it seems like all incentive structures for the markets and consumer behavior will steer these things to degenerate gambling.

> Their defense is that they are a gamified futures contracts and hence should fall under CFTC regulation.

That might be the defense. They are inherently designed to leverage insider trading though. I made a top level comment with links/resources that argues why.

How does one "interpret" public knowledge to time bets so accurately right before Trump's announcements?

No, I was commenting on the current administration's corruption. I don't think most previous Republican administrations would have tolerated the type of insider trading we have seen from people close to the administration. It goes beyond ideology, turning a blind eye to this behavior among your subordinates is a sign of weak leadership and poor management.

Hey now, you don't to be divisive do you?

There was a downward trend during the Biden years [1] but "both sides same" is not even a little bit true.

[1] https://www.citizen.org/article/biden-doj-2024-corporate-cri...

> Why should my tax dollars be spent on helping a bookie run their gambling business?

I mean, current laws do exactly this. The FBI has done investigations for major sports betting sites related to players throwing or fixing games, etc. If you commit fraud on a sportsbook you absolutely can go to jail.