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Comment by sakopov | Hacker News Reader

Polymarket is a new thing and it's throwing a lot of political pundits off their tracks because they treat it as political sentiment indicator, but it's all just gambling and manipulation.

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That’s the beauty of it. If you’re sure it’s wrong, you can profit off the gambling and manipulation.

You can also profit off regular gambling and manipulation by buying stocks in gambling companies.

Or really day trading in its entirety, IMHO. Imagine I had a casino game that all the best experts insist you have slim-to-no chance of beating the odds on, and that countless hordes of people just like you have lost their life savings on. Is it not gambling just because you have a system for picking a spot on the roulette wheel?

Not really. The house takes 2% of the winnings (current polymarket fee structure). You're betting against other people, not against the house. If you are correct and especially if you know something that other people don't know you may take a very large percentage of the pool. So this is a more "merit" based system when critical thinking and correct prediction pay well.

Every prediction market has a resolution date. Stock market does not. In that sense the prediction market "predicts" an external event on a particular date and this is the big difference. Stocks may rise of fall based on the perception of the market. A bet would get resolved based not on the perception of the people, but on the event itself. (or on the UMA dispute vote, but mostly the system is working).

That's why it doesn't matter how skewed/wrong a particular bet is (like Trump chances). If your think that the market is wrong, you get a better return on your money. And the resolution date + smart contract creates the possibility to earn if you are correct.

However, many stocks pay dividends at fixed intervals, based on objective metrics.

Even if I know that is bullshit if someone claims to know the next number of a roulette and backs it up going all-in on black, it is not rational for me to bet on red.

But if their having placed a bet makes your opposing bet cheaper, then it can! : )

At least one person has figured out how to beat roulette [0]. I’d follow his lead

[0] https://archive.ph/Hc0Kh

The thing about gambling is that even if you understand the nature of gambling it doesn't mean you can reliably win money from gambling.

Sure you can, especially if you’re rich! You just can’t reliably know when you can reliably win money ;)

Epistemology strikes yet again

It's not a random chance gambling like a casino. It's more like active stock trading. Many traders (especially retail) lose money, but many make money.

Polymarket is good when you understand the situation better than the people you're betting against. And the bet you're making can be on what you know.

My first 100 USDC I've made was when the CrowdStrike news hit. I saw a bet that it was a "hack". As a programmer I knew it wasn't a hack based on the technical information I read. The bet was 70 not a hack/30 hack. I bet that is was not a hack and got 30% return for 2 days.

Many people "bet" everyday. Every resource allocation decision is a bet. Polymarket is the same. Don't bet on "what will Trump say" or "the price of BTC in a week", but there a plenty of bets where you can make a reasonable prediction and get consistent returns.

> It's more like active stock trading.

That is also random chance gambling.

If it was, than people like Buffet, Stan Druckenmiller or Jim Simmons wouldn't exist.

They are trading and they are making bets. Simmons makes milions of them everyday :), Buffet makes 1 per month. But they are active stock traders not a passive index investors.

Well, not Jim Simons. He’s dead.

Does that matter, he managed to be living for the last 30 years creating a consistently earning quant trading fund.

There are thousands of Buffets, Stans, and Jims that don't exist.

The point is that you don't see a Buffet like figure earning consistently in random-bet casino games. If you see that there are some examples disproving the conjecture "Market is fully random and are not different than a casino roulette game". It may be uncommon, but not a fully random example.

You are skeptical of this idea because you expect to see more people like Buffet "making money by simply buying stocks" (I'm being reductive for the sake of writing, not arguing). The unspoken foundation for this assumption is that everyone is equally at the casino roulette game. That is not the case. The american wealth inequality is vast. You are seeing exactly the expected number of winners (few) given that the people at the table who can afford a majority of the loss are very few.

Stock markets are a casino gamble and the few people like Buffet are actually proof of it being a gamble.

Don't take my word for it: https://money.com/warren-buffett-stock-market-casino/#:~:tex...

There are lots of shades of random. When the three-photon photoelectric effect will happen is random, but if you can find a way to bet against it, unless the odds are ridiculously skewed, you should.

But the odds are ridiculously skewed - that's how it works. They're skewed so the house always wins, which means the customers, taken together, always lose. If everyone's betting against the three-photon photoelectric effect, you will be able to multiply your money by precisely 1.0 when your bet comes true and it doesn't happen, or maybe even 0.999.

The house here is just taking some money off the top. It doesn't really matter whether the customers, taken together, get 100% or 98% of their money back. What matters is that an individual that's a few percent more accurate than the market can make money.

It depends on what you mean by reliably. There's always short term variance, often a lot of it, but a player with an edge will absolutely win reliably in the long run.

There are ways to reliably make money off of it, for example via arbitrage. There have been moments when you could by different candidate bets on different platforms and profit no matter what.

Except the people who know best are in the US and can't file 1099 on their winnings without implicitly admitting to a crime. Any American dumb enough to invest in Polymarket deserves to lose their money.

Any fed dumb enough to waste tax dollars chasing down the client side of the usual small stakes token 2-4 figure betting this involves rather than polymarket (et al) directly deserves to be fired, since it almost certainly is a net negative to the taxpayer and will do nothing to stop this kind of betting.

This country is rule by law, the laws regularly broken will be weaponized for political purposes.

> If you’re sure it’s wrong, you can profit off the gambling and manipulation

Not if you’re American and want to respect the law!

Right, but I'm also ethically opposed to the industry

For me personally, I placed a bet for my non-favored candidate so that either my person wins, or I win some amount of money. I'm using it kind of like insurance or hedging. Unfortunately if enough people use it this way, it probably no longer works as a predictor

I thought about doing this as well but ended up viewing it personally as a "lose-lose" for myself rather than a "win-win". I wonder if that says anything about my risk-aversion.

It means you are not a degenerate gambler. You probably also do not enjoy slot machines, or the bullshit that passes for card games in a casino. I want to play blackjack, not "blackjack" where you change the allowed bets and rules specifically to increase the house edge thank you very much.

Do you feel the same way about insurance in general?

So, that's true. But the point of the linked article is that Polymarket is clearly marketing to US consumers, a market it isn't licensed to serve and that it claims it tries to prevent (via an IP block, anyway).

It's not illegal to be running a gambling and manipulation site per se. PredictIt and Kalshi do it above board. Polymarket appears to be engaging in at least a little bit of fraud here.

Statistically speaking, I'd expect some hardcore sample bias, if using Polymarket to model the US population.

The biggest bettor is French, apparently:

https://www.reuters.com/world/polymarket-says-mystery-trump-...

That guy bet $46m. Current betting volume is $3.3bn.

It does seem to be working a bit as a sentiment indicator at the moment on the Trump Kamala election but seems biased because most people speculating on crypto are male and pro Trump. In basic economic theory you'd expect it to reflect a realistic estimate of the candidates chances but seems off a little just now. I'm long Kamala for what it's worth.

Ah well, that didn't quite work out.

Betting markets can be good predictors but I think what poly market is reflective of is not people who are looking for the optimal bet; but wish casting of crypto bros.

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