[mind-blight]

I don't like prediction markets, but I think a lot of people in this thread are assuming that gambling vs. not is clear cut.

Insurance was illegal at different times in history because it was considered gambling. Ditto for commodity trading.

Even you look at the structure of a futures contact, the basics look really similar to a bet that can be traded with someone else.

The main differences are the regulatory environment, and the intention the actors in the market have.

Commodities, options, and futures are all legitimately used to hedge against future outcomes. The "gamble" (placing money on a future outcome) is a mechanism for the main goal: protection against instability.

When you look at stocks and - in particular - derivatives, it starts to look a lot closer to how gambling is structured. I'm pro stock market, but that doesn't mean I won't admit that the line between it and gambling is pretty hard to draw. It's a lot more grey than people give credit for

[waisbrot]

> Insurance was illegal at different times in history because it was considered gambling.

And it was, in fact, gambling. You could take out a life insurance policy on anyone without any relationship with them.

[Glyptodon]

I mean I get how there are benefits to society from crop futures and insurance. I don't get how there are from an election prediction.

[mind-blight]

Election prediction is an interesting one. The first digital prediction market on the US was election only, and it has a $500 cap. It was run by a university and had a limited scope, but it still be a surprising amount.

It did a better job of predicting election outcomes than the polls. For markets without a cap, companies have used them to have against a politician that would pass policy that's can for their business.

This doesn't mean we should have them, but there is utility. It's just not worth the trade-offs

[Ferret7446]

Prediction markets are a superior method for determining public sentiment, and understanding public sentiment is useful for many reasons. It can guide economic decisions, picking policy, etc.

Basically, prediction markets are for public sentiment what free markets are for supply and demand. They create an emergent system that balances/optimizes variables across a large domain.

[class3shock]

Is their "greyness" between gambling and day trading? Sure.

Prediction markets are obviously, blatantly, gambling. There is no "greyness", we've skipped the slippery slope and gone straight to the bottom of the ravine.