[mothballed]

As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you.

Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.

[MadnessASAP]

Yes, but the examples where it's good has a name "insurance". It exists, it's generally well regulated, and is not easily exploited.

The reason it works better is because in a prediction market, the person betting against you has no resources or ability to go after you for fraudulent behavior. Whereas an insurance company has both.

[wallst07]

Nobody would insure this, and if they did, that policy would take months to be written, wouldn't cover the single probability of 1 event, etc...

So you are renaming something that doesn't and won't ever exist.

[MadnessASAP]

And you're trying to rename unregulated gambling as something that is good for society.

Exploiting people with gambling addiction is not a reasonable replacement for insurance.

[amelius]

Why not get a real insurance, where it is actually verified that your house was bombed?

[mothballed]

I'm not saying it's not out there, but in many cases finding insurance for act of war is difficult. It is certainly rare and almost always far less accessible than using polymarket. If you have a very large holding you can probably get someone to write it for you though.

[crazygringo]

Because there are many things where insurance doesn't exist.

[amelius]

Ok let's work on that then. But meanwhile, close down unregulated websites like polymarket, where there is no verification of actual damage.

[crazygringo]

You can't just "work on that".

Insurance works on repeatable, predictable risks based on models.

You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.

[maest]

There is a market for custom and rare risk insurance - it's called "surplus lines"