[fwipsy]

The same perverse incentives apply to the stock market too. "I'm short United Healthcare, someone should go shoot their CEO." Or "I'm long defense stocks, I guess I'll vote for someone who will start a war."

People mostly don't do this because most of the things which you could do to move a stock price are highly illegal, and anyways there are laws against market manipulation. And I doubt people vote to benefit their portfolio (except for homeowners) because there's so little chance that any individual person's vote will result in a tangible benefit to the corporation. People mostly vote out of a sense of duty; the chance of your vote individually actually changing a tangible outcome is miniscule.

The problem seems to be in what it's used for. Prediction market supporters never intended it to be used primarily for sports gambling, much less used to override state sports gambling laws at the federal level. That was never part of the original proposal for prediction markets. I can see a legitimate use case for e.g. the Fed using conditional prediction markets to inform monetary policy; in that case, even a small increase in marginal accuracy/certainty could plausibly be worth billions of dollars to society.

Everyone here seems so sure that they knew prediction markets were a bad idea. But it seems to me that most of the harm comes from the CFTC regulated securities loophole. Without that, prediction markets on sports would be limited to states where sports gambling was already legal, and the marginal harm would be minimal. And I didn't see anyone predict that mechanism; if they did, they never got much traction. This is exactly the sort of problem prediction markets, in their ideal form, are meant to solve.