Prediction markets are breaking the news and becoming their own beat

https://www.niemanlab.org/2026/04/prediction-markets-are-breaking-the-news-and-becoming-their-own-beat/

by gnabgib • 3 months ago

53 71 3 months ago

ares6232• 3 months ago

I dunno, I feel it's just democratizing insider trading. And as everyone knows, if it has "democratizing" in it, that means it's automatically good.

Terr_3• 3 months ago

In a way, it's even worse. (Yes, I know the post is sardonic, I mean it's even worse than that.)

Many of these things are not really democratized either, they're centralized systems with a "we empower you" sales-pitch. The opaque and unaccountable central authority has an incentive to pick-and-choose what's possible, and to put their thumb on the metaphorical scales to get certain outcomes.

Kind of like ride-share apps: Any pretense of "democratizing" jobs faded, instead they enabled new flavors of monopolistic exploitation.

ares6232• 3 months ago

It's funny, after posting the above message I started thinking what else can be made to sound "good" just by prepending it with "democratizing". Surprisingly it works really well.

seydor3• 3 months ago

democratizing insider trading

Those are contradictory words

sixhobbits• 3 months ago

I (my agents) have been playing with the kalshi and poly market APIsv and whatever your opinion on the markets themselves it does feel like there's a bunch of interesting things to do with such a firehose of realtime data.

I hope they stay as open and generous as they are now with programmatic access

topspin• 3 months ago

"I hope they stay as open and generous as they are now with programmatic access"

Make a prediction for it: When will Gamma/Data/CLOB require subscription: 2026, 2027, etc.

throwaway06652• 3 months ago

These apps claim to let you turn your knowledge into money. What this means is the insiders get to cash out and the desperate suckers provide the liquidity. I'm amazed they've all gotten away with this for so long.

OJFord2• 3 months ago

They've 'gotten away with' it by for example winning cases deciding they offer commodities trading, not gambling. (You can disagree with it, it's in the open and explicit is my point.)

throwaway06652• 3 months ago

They've had people in their corner who've overturned state law. There are federal lawsuits in progress.

puelocesar• 3 months ago

They get away with it by having on the payroll the son of the president of the most powerful (and dangerous) country in the world

4gotunameagain2• 3 months ago

And one of the most corrupt presidents, I might add. He has increased his wealth by at least $3 BILLION during this last term.

https://www.forbes.com/sites/danalexander/2025/09/09/preside...

angra_mainyu• 3 months ago

More like they get away with it because hundreds of thousands of people around the world demand the service.

arowthway• 3 months ago

I don't understand, what's so fundamentally wrong with this form of insider trading? Is the accusation that it makes degenerate gambling unfair? Is it necessary for degenerate gambling to be fair? The gamblers don't seem to care.

wodenokoto• 3 months ago

The gamblers don't seem to care.

Which makes me wonder if it is actually just money laundering.

amwet• 3 months ago

The obvious counter example is lotteries. People just like to gamble.

xnx• 3 months ago

How would money laundering work with a prediction market?

sznio• 3 months ago

beyond the general idea that we shouldn't normalize gambling, betting on some real-life events is horrid. think about insider trading on a polymarket bet for someone's death.

CTDOCodebases• 3 months ago

Or even worse what happens when people start gambling that someone won’t die today? It opens the door to crowdsourced hits with plausible deniability.

jstanley2• 3 months ago

You missed out the reason that it's horrid, which is that it is a plausibly-deniable way to crowdfund assassinations.

yen223• 3 months ago

Matt Levine pointed out in a past article that the real danger of insider trading are company insiders being incentivised to damage the company to make a quick buck.

Terr_3• 3 months ago

insiders being incentivised to damage the company

I'd like to emphasize that this incentive doesn't have to be an accidental find by the insider either: The "market" can end up facilitating anonymous crowd-sourced bribery by enemies or competitors, who create the potential for profit knowing that eventually an insider will take the other end of the implied deal.

Every time I see someone dismissing these kinds of issues--especially someone whose salary depends on not-understanding it [0] --I imagine how their tune would change if the shoe was on the other foot. For example, if someone created a "prediction market" where people could anonymously bet on unusual deaths or serious injuries of... prediction-market executives.

[0] https://quoteinvestigator.com/2017/11/30/salary/

bluecalm2• 3 months ago

How is it different than shorting or buying put options and then damaging the company? The tools are already there.

Quarrelsome4• 3 months ago

because the long term outcome is that truth will start to be defined by money. There's already been tales of journalists being harassed to change stories in order for over-leveraged betters to win polymarket bets.

I HIGHLY recommend going onto a sports subreddit match thread during a match and seeing what people say, versus the post match thread, a few hours after the match. The difference in tone is striking. While some people are probably just passionate, I'm pretty sure the depths of vitriol (that border on things like death threats) are a consequence of gambling.

dzhiurgis• 3 months ago

Journalists are most likely to profit from this too

neonstatic3• 3 months ago

truth will start to be defined by money

I'm a firm believer in 'there's nothing new under the sun'.

There's already been tales of journalists being harassed to change stories in order for over-leveraged betters to win polymarket bets.

So the only thing that has changed is who is doing the harassing.

I'm pretty sure the depths of vitriol (that border on things like death threats) are a consequence of gambling.

People who are "passionate" about sports have always been the most aggressive and vulgar. I grew up around them, this does not surprise me at all.

philipallstar• 3 months ago

Death threats are so common online that the selective reporting of them is weaponisation.

mr_mitm• 3 months ago

That's a fundamental problem with prediction markets, not the insider aspect of it.

seydor3• 3 months ago

But this is not insider trading, beause the insider event IS affected by the behavior of the gamblers. Normally the insider event should be uncorrelated and unknown to the gamblers

nicbou• 3 months ago

If there is enough money on the table, gambles can influence real world events.

Can you guarantee a fair trial when anyone can bet on the outcome, including the judge and the defense?

It has changed the outcome of some sports matches. It could change the outcome of far more important events.

charlieyu12• 3 months ago

A lot of trials aren’t fair anyway, they are just influenced in a different way that is not accessible if you are not rich and powerful

jcattle• 3 months ago

There's a difference between insider trading and gambling no?

pants2• 3 months ago

Is there? In gambling the house is the insider. They already know if you're going to win the next spin or not.

4gotunameagain2• 3 months ago

Insider trading by politicians means even more incentives for greedy people to pursue politics.

The system is already very much like that, we should try to go in the other direction, not make it even more attractive for corrupt individuals.

When someone in charge only cares about personal profit, it is only them that will benefit (and a couple of megacorps), to the detriment of millions, and humanity itself (look no further than the current events).

globular-toast• 3 months ago

What's so fundamentally wrong with selling crack to addicts?

UncleMeat• 3 months ago

Gamblers do care about losing their shirt. Appified gambling is just remarkably effective at getting humans to keep playing. It'd be one thing if we didn't hook up all of the dopamine feedback loops that we've developed over the past decade to a gambling machine but that's not the world we live in.

scarecrowbob• 3 months ago

I mean, I certainly am looking forward to taking negative positions about the deaths of folks I am interested in...

if I bet $50K that arowthway won't die suddenly then I am sure that probably won't happen, right?

DonHopkins3• 3 months ago

I didn't bet on the beat this broke on.

https://youtu.be/ZN4njIQcSR4?t=1815

Havoc• 3 months ago

it blows my mind that we haven’t seen anyone arrested for insider trading yet,

Almost like the offenders get their inside info straight from the chief purveyor of markets up and down chaos

shafyy2• 3 months ago

Donald Trump Jr. is an adviser to both Kalshi and Polymarket, and an investor in one of them (forgot which one).

camillomiller• 3 months ago

There is a market to bet whether Bryan Johnson will have sex this month or not. I dunno, seems that would be easy to control if you are, I dunno, the living person involved?

podgorniy• 3 months ago

Buying future becomes even easier: just poor money into a bet and eveyone will discuss it as it's real people's expectations....

seydor3• 3 months ago

Just Goodhart's law to massive scale, the most predictable thing ever. Please go back to crypto and destroy this abhorrent 'industry'

shafyy2• 3 months ago

I recommend watching the latest Last Week Tonight about prediction markets: https://www.youtube.com/watch?v=ZN4njIQcSR4

torcete• 3 months ago

I always found interesting that you can bet on Polymarket whether Jesus Christ will come back before 2027 or not. At the moment, you can bet $96.20 to win $100 that he won't.

doix• 3 months ago

Who decides what a "win" is in these cases? I get everything apart from that part. Because I would take that bet, but I'm worried what the definition of "Jesus christ" is.

kwar13• 3 months ago

and that is not much higher than the yield on a B grade corporate credit

insane_dreamer• 3 months ago

A good time to rewatch Nightcrawler. Once news is so profitable, the temptation is to create news and cash in on the bets.

johnleslie_pm• 3 months ago

The Kalshi-Fox News/CNN deal is the most significant development here. Embedding real-time odds into cable news transforms prediction markets from a niche trading venue into mainstream infrastructure.

The comparison to stock tickers is apt. Bloomberg terminals started as specialized tools for bond traders. Once financial data appeared on every TV screen, it changed how the public understood markets. Prediction markets are following the same path, just compressed into months instead of decades.

The tension is that news organizations now have a financial incentive to cover events that move prediction markets. This creates a feedback loop: dramatic events move markets, market movements become news, news coverage moves markets further. We saw this with the Hormuz situation this month, where prediction market odds were cited in coverage of the shipping blockade, which then moved the odds.

Whether this is good or bad depends on whether you think the signal (real-time probability estimates) outweighs the noise (gamification of serious events). The Forbes incident with the mass shooting market suggests we have not figured out where the line is yet.

Prediction markets are breaking the news and becoming their own beat

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