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Comment by margalabargala | Hacker News Reader

As someone generally against gambling, I think there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.

The issue of bribing/threatening a sports player to throw a game has existed for over a century. It's not a new problem. The only thing special about Polymarket is the expansion of surface area.

My preferred solution would be to just ban it all, or if you really want to allow sports betting only allow betting on the outcome of events happening in the venue one is physically in.

The existence of sports betting absolutely encourages people to throw matches and the existence of X betting absolutely encourages people to try to make X come about.

Strong regulation and legal consequences could potentially fix this. We don't see tons of people shorting a company and then bombing that company's HQ.

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At least with sports betting it's limited in scope. Polymarket applies the same warping influence to the whole of politics and daily life. That's the biggest problem and difference to me, yes it sucks if teams are throwing or players are altering their play to make or break bets but ultimately the effect/danger of that incentive is limited. And with the more limited and well enumerated pool of potential insiders places like the league can pretty easily monitor for it while on Polymarket it's down to open source monitoring and a little blip on their TOS that's nearly impossible to enforce.

Was I a sucker for believing that Kalshi was going to [e.g.] help farmers hedge against drought years or is the problem just morally bankrupt selection of events?

If they said that and you believed it kinda. There are already markets and insurance schemes to allow farmers to do that though through crop insurance, it's a very old and even government subsidized to keep the prices down in many countries. Farmers in need of that can already insure their crops to make $XXX amount of money to make sure they break even on the crop for the year for example there's no real need to bet on the amount of rain to reach that same goal.

We already have an extremely complicated system of farm insurance and commodity futures for that.

Yep Kalshi is at best only shrinking the scale of things a farmer could bet on instead of getting proper old style crop insurance (either yield or revenue). It's just cloaking a weather slot machine in "we're helping farmers" language. Agri-washing their betting market if you will.

The word "Polymarket" can be replaced by "market" there.

Global market is just the largest gambling venue. Always has been. No amount of "monitoring" and "leagues" will keep people from going Boeing whistleblower way.

The "market" isn't a zero-sum-game though. Polymarket is.

I don't see how this is a counterargument.

> Strong regulation and legal consequences could potentially fix this.

There are regulations. E.g., in the US, 17 CFR § 40.11 prohibits contracts on "terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law" [0]. The problem is that those responsible for enforcing those regulations are currently uninterested in doing so [1].

[0] https://www.law.cornell.edu/cfr/text/17/40.11

[1] https://www.cftc.gov/PressRoom/PressReleases/9183-26

Yeah, regulations are only as strong as the consequences given those who break them.

If people can threaten journalists for money and get away with it, they will. If people who threaten journalists over money are sent to prison, then after a brief transition period it will mostly stop.

It's braindead easy to anonymously threaten people on the internet. It's getting easier to steal identities or create new ones out of whole cloth and cypto wallets means you can't functionally know where the money comes from. I'm not sure attempting to punish people you can't realistically identify can be considered an effective strategy.

Punishing a corporate entity however is much easier.

> Punishing a corporate entity however is much easier.

We don't seem to have much luck getting it to happen. The larger the corporate entity the more unlikely they'll see any meaningful punishment.

Seems like bets on missile strikes would violate that...

This is the sanest reply on the thread.

During WW2 when Britain captured all incoming german spies and ran a fake german spy network, they could redirect the german V1 or V2 bombs, by misreporting what they did or didn't hit.

Allowing bets on acts of violence allows the perpetrators to assess their success rate...

They do. It's moot, though, because Polymarket isn't subject to US law.

There has been an ongoing controversy over the fact that Kalshi (which is subject to US law) chose to comply with the law over the market on Khomeini "leaving office", when the bettors assumed that it wouldn't.

What happens if someone bets on a terrorist attack in an unlikely place and then puts the bomb himself? This can turn ugly very easily.

Well that is a high enough level even the bet would probably be enforced. But the point is valid, this is a slippery slope and there's a reason these bets are illegal.

> I think there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.

> Strong regulation and legal consequences...

Functionally, you are correct.

But the crux of the issue is Polymarket and Kalshi (YC W19) have successfully argued that they are technically a platform that is democratizing "futures", and thus falls under the CFTC - not gambling.

Nothing will be done to change this. YCombinator (who owns HN) [0] and Sequoia have built a fairly well oiled lobbying muscle with the CFTC and with both the GOP and DNC to maintain this status quo.

It's the same reason both Ro Khanna and Ron DeSantis went to (metaphorically) kiss David Sack's ring back in 2023 at the same donor event XD.

[0] - https://www.politico.com/news/2024/05/30/little-tech-startup...

Which is of course a blatant abuse of our legal system, since they are doing nothing different than a casino's roulette or blackjack tables.

"Red futures pay out at 2:1!"

"Get your future here on whether the dealer's cards are higher than your own!"

Well the real insight here is that most "investing" is gambling.

I'd agree with the blackjack comparison, but not roulette. Both "futures betting" and blackjack need skill to be able to win even if luck plays a significant part, as opposed to roulette, which is just pure luck.

Roulette is not pure luck, the amount of skill needed is just significantly higher.

https://www.bloomberg.com/features/2023-how-to-beat-roulette...

> As someone generally against gambling, I think there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.

They are, because the object of the bet is open, it can be abused to generate incentives for desired behavior. For example if you really want the guy writing about the attack out of the picture, you don't send death threats, you instead make a new bet that says so and so does not write for X publication after Y date. Place a large bet against it and let greed and stochastic violence do the rest.

> there's a fair point to be made that Polymarket and similar sites are not fundamentally different from e.g. sports betting.

not fundamentally different as in "live or die" you mean? the whole point of sports is that you compete whilst appreciating each others' humanity.

I honestly don't know what your point is. The best I can come up with is:

"The whole point of sports (in my opinion) is X good thing therefore betting on sports is more acceptable"

Making bets on good things doesn't make the betting better. Just because Polymarket would allow you to bet money that the infant homicide rate goes down next year, doesn't mean it's a good thing to allow betting on.

... if I post a multi-paragraph long reply on the incentives created by betting on less infant homicide, am I going to find out that you understand perfectly well what the incentives are, and that was the entire point of your comment?

The actions people have taken in accordance with sports betting incentives is everything up to and including murder. The moral ideal the parent commenter associates with sports doesn't make that okay.

If you have a point to make about how the age of the person being murdered means it's a categorical difference rather than a difference of degree I'll read it.

Just checking that you knew betting on good outcomes was how you incentivized bad ones.

Eg, to be rid of a turbulent priest, you'd place a bet that Thomas Becket will live to see the year 1171, which is a "good" outcome to bet on happening.

Glad we're both clear on which one of us missed the other's point...

His point is pretty simple. Sports don't inherently involve life or death, the whole point is that it's a competition that "respects each other's humanity", eg not a competition to the death.

The same can't be said for war (bombings), which Polymarket allows betting on.

Seems like a fundamental difference to me.

Sports just delay the death or move it to injury instead, and people bet on the injuries just the same.

> Seems like a fundamental difference to me.

one is more culturally taboo than the other, but they are fundamentally the same activity

The Good Work channel on YouTube did a really good video on this topic recently- https://youtu.be/mOptJl8Xkx0?si=4jyNnXweXp7V9VkM

In a nutshell, these platforms operate by classifying their bets as 'futures contracts' with 'meaningful real world economic consequences' rather than traditional gambling, allowing them to be regulated by the Commodity Futures Trading Commission (CFTC) rather than stricter state gambling laws.

It's going to take strong push from lawmakers to close the loophole, and even stronger push from the platforms to stop anything meaningful being done.

> Strong regulation and legal consequences could potentially fix this. We don't see tons of people shorting a company and then bombing that company's HQ.

https://en.wikipedia.org/wiki/Borussia_Dortmund_team_bus_bom...

I wouldn't say one in the last decade is "tons of people"

Banning it sends it underground into the hands of organised crime, which will still have access to modern technology.

There's going to be a net loss, but it's probably better to regulate it than have another war on drugs.

We should definitely ban advertising it.

It was only a few years ago that sports betting was significantly more heavily regulated and limited, and stuff like Polymarket didn't exist (just non-monetary forecasting sites like Metaculus.) Even if there was more demand for "underground gambling" before these changes, the net negative to society was still significantly less.

There were other prediction markets like Intrade which was founded in 1999. I had coworkers who made a significant amount of money doing prediction market arbitrage for the 2012 election.

Intrade confuses me. It was illegal to use Intrade as a US citizen; in fact, some people I personally know who were into that scene had to maintain foreign bank accounts.

What has changed, exactly, to make Polymarket legal where Intrade was not?

Giving it to you straight: GOP SCOTUS court packing via denying Obama’s nomination led to 6-3 supermajority, and it ruled gambling legislation was a states rights issue. Sports gambling startups ate sports right up, then, innovators like YC funded companies that said “that, but for everything” and collided with a shameless pay-to-play administration, not the general “politicians take donations from companies” kind, the “name don jr as your strategic advisor” kind. (Kalshi) Now the argument that would have appeared batshit insane a decade ago, that there’s no federal way to prevent this) is de facto law of the land.

> and it ruled gambling legislation was a states rights issue.

What did that change? Gambling legislation was a states' issue before. You might have noticed that different states had wildly different gambling regimes.

(...and all federal legislation is a states' rights issue?)

> Now the argument that would have appeared batshit insane a decade ago, that there’s no federal way to prevent this[,] is [the] de facto law of the land.

You're talking about a law that was invalidated eight years ago, and passed 24 years before that. Which position would have looked insane more of the time?

Fair point that PASPA was the exception, not the rule, and that the anti-commandeering / "states rights" argument isn't some novel theory. It does happen to be deployed often in cases where businesses don't want to be regulated. (and, the elephant in the room, more famously....never mind, let's not go there)

I overstated the court-packing angle, Murphy was 7-2, not a partisan split.

But my actual point is narrower than the constitutional question: in practice, sports betting was confined to Nevada and reservations for decades. Once that dam broke, the path from legal sports betting to VC-funded "that but for everything" prediction markets to the current situation happened really fast, and there's no regulatory apparatus keeping up with it. Whether the dam should have broken is a separate question from whether anyone's minding the flood.

> What has changed, exactly, to make Polymarket legal where Intrade was not?

Polymarket opened a subbranch to handle US customers subject to US law. It's separate from Polymarket proper, which remains illegal for US citizens to use.

This is only true if people's want for it exceeds their want to not break the law.

For illegal drugs, people who want them want them a lot, so them being illegal isn't a strong deterrent; although, legalization has still absolutely increased the number of users (i.e. legality was acting as an effective deterrent for some.)

For illegal gambling, sure _some_ people won't be deterred by legality, but most people aren't hardcore gambling addicts; they're just engaging as a form of "harmless fun." They're not looking to go to jail to toss $20 on a sports game.

As someone who at first embraced the idea of prediction markets and is now ambivalent, sending them underground vastly reduces their harm. First, because discoverability is an issue. Second, there will be much less liquidity. Third, any gains will have to be laundered or hidden, making it even more difficult.

Maybe prediction markets are net positives, or maybe regulating them will make them so, but banning them does resolve most of their negative effects.

> First, because discoverability is an issue.

I can't believe how many betting ads I see or hear every time I consume US media. It's worse then all the ads about drugs they want you to request from your doctor.

Maybe we dedicate specific buildings to gambling, so it's legal, regulated, and localized. Call it a "casino".

We can ban online betting and betting advertising though. If you want to bet on ponies go to a racetrack. No apps, no phones.

Not sure about other countries but in Australia at least, betting was only allowed at race courses on race days. That has obviously changed though.

This was the case in Italy too until a few decades ago, except for some specific locations with a casino license, and a national kind of sport lottery.

Since sport betting became legal the issues with gambling addiction have skyrocketed but the state is addicted to the trickle of provents from it and can't cut it back.

There was an attempt to limit sport bets advertising, and that was widely sidestepped (you advertise for bet.news instead of bet.com, with the former linking to the latter)

Ah yeah, there are discussions here about banning advertising. TV networks but a lot of money from gambling ads though.

Underground is where it belongs. The less visible it is to the general public, the fewer people will be drawn into it. And it being taken over by organized crime is just another way of saying that law enforcement will be able to make arrests and throw them in prison, which they can't effectively do if it's being run legally.

Yeah, sports betting is also bad. I guess polymarket casts a wider net, and the fact that everything is fair game means you cannot avoid hearing about it

Yeah, but unfortunately its probably going to keep going until people actually die before they will be stopped.

I think there is a fundamental difference between betting on a sports event and on a war.

What would that difference be?

Well, one involves two teams of consenting players involved in a game.

The other involves the brutal deaths and suffering of exponentially more innocent people than those who want to be involved.

No, that's the fundamental difference between a sports event and a war. Which is obvious and not what was asked.

The question was, what if any is the fundamental difference between betting on a sports event vs a war?

Add “profiting from and encouraging the exacerbation of” to the start of my explanations.

Then your attempted explanation is wrong.

Plenty of people have been murdered over sports betting. It's more than your reductive "oh it's just consenting players".

I did not say "people have been murdered", I was very clear and concise in my wording. If you are going to ask a question to argue it, do not strawman people who reply to you.

I know you didn't. I pointed out that people have been murdered over sports betting, thus closing the morality gap between sports betting and war betting.

Just because sports and war are morally different doesn't mean "$verb about sports" and "$verb about war" are morally different. E.g. "reading".

You're 1 for 3 on comment reading comprehension here so I don't think we should continue. Even if you said you agreed with me there's no way for me to know what you think you're agreeing with.

Ban it on which grounds?

I have never in my life placed a sport bet, nor a polymarket bet. It strikes me as one of the dumbest things to do with your money and time.

But a lot of people seem to genuinely enjoy it. Gambling is part of human heritage. Regulate? Sure! Ban? I don't understand why

> Ban? I don't understand why

Many things that people enjoy are banned because it causes harm to other individuals or to society as a whole.

Not a difficult concept to understand.

That's why I was asking for a rationale. The devil is in the details. Otherwise motorcycling will be next, alcohol, excessive gaming, etc. etc.

Motorcycling does not cause immediate harm to society or to the individual, and is a regulated activity anyway.

Alcohol and tobacco are regulated too. Perhaps less than it should, in no small part for cultural reasons. I say this as someone that enjoys the occasional whiskey and smoking a pipe.

I am unaware of evidence of gaming causing harm to society. Maybe it exists. I can't comment on it.

I generally share the same perspective but the article provides a good rationale for doing otherwise.

I do not think so. We can hold these people accountable otherwise, there are laws for that already.

The existence of sports betting absolutely encourages people to throw matches and the existence of X betting absolutely encourages people to try to make X come about.

The existence of something in no way encourages someone to commit a crime. That is victim blaming (if the concept of 'sport' can be a victim in this case). Sport and people who enjoy sport and people who enjoy gambling on sport don't have anything to do with people who want to cheat and steal to materially gain from it. If you banned sports those people would just move on to some other criminal enterprise to get rich with minimal effort.

In what's happening in the story the fact that people are gambling on a war is certainly quite grim, but it's not really a problem. People do distasteful things all the time. The problem is that they're issuing death threats to someone. That's not really anything to do with gambling.

Things are not black and white, clear cut, absolutes.

The problem can indeed be "the asshat contingent", but at the same time, it's not blaming the victim to say that certain situations open up opportunities.

A lot of our laws are in place to prevent people from taking advantage of such opportunities. That's why some laws seem bizarrely harsh, where you can earn more jail time than physically assaulting someone, for a financial crime. Or computer hacking.

The logic is "this is an easy way to break the law", and "we'll have to make the penalty worse to compensate". That's not blaming the victim. In fact, it's an attempt to protect the victim.

This sensible approach is akin to what you'd do if you entered certain 'sketchy' sections of many cities, at 2am. You certainly wouldn't walk around carrying a big box of 100 iphones, and people would say you were nuts to go into that area at 2am and do so.

Yes, the asshats who assaulted you, beat you unconscious, and stole your $100k worth of iphones were wrong. But, you'd certainly be considered a little dim for doing so I'd think. Why?

Because you're ignoring reality for a catch phrase.

Reality is just that.

Ah, the old "let's not have gun control, criminals can always find a gun" again. Except that when there are fewer guns around it is manifestly harder for more criminals to find.

In a very strict sense, you are right. But people influence other people, and people who wouldn't act this aggressively otherwise find themselves inspired to after taking a bet.

Ah, the old "let's not have gun control, criminals can always find a gun" again. Except that when there are fewer guns around it is manifestly harder for more criminals to find.

That's not my argument though. Gambling is not the equivalent of a gun in this situation. Gambling is the catalyst, sure, but the crime is making death threats. Removing all the reasons why people might make death threats in order to stop the death threats is going to be tricky.

If you want an analogy it's like the argument is 'Let's not have banks because they only encourage bank robbers!', and I'm here arguing that really we just need to make bank robbery a crime.

But the argument for not having cash so that it does not encourage robberies is a real argument and it does indeed work.

ATMs have long had devices that stain cash if you try to steal from them. Bank cashiers used to have "we don't have the keys to the vault" signs. Vaults that open at fixed times beyond the control of the cashiers are a thing.

Regulation and enforcement are important but removing opportunity and motive are also important.

Removing the reason you have to make death threats is the key. You don't go around looking for reasons to make death threats, making them somewhere else if you can't for a bet.

The existence of incentives can encourage crime. Why would anyone throw a game if there wasn't an upside? Nobody does anything for "free", and by creating a market you are providing liquidity leading to more "labor". A market for whether or not someone will die within x date sets up a financial incentive to kill that person. That is encouragement.

Saying that people who enjoy sport/ gambling "don't have anything to do with people who want to cheat and steal to gain materially from it" is a false dichotomy. It's nature. Ask yourself, would you throw a game in your sport of choice in a hobby league for 100 million dollars or whatever? Why not, no one gets harmed, it is a lot of money, it's not even a proper league. This applies to all levels of real world consequences, some people have a larger apetite for risk.

If it becomes commonplace for existing prediction markets to get undermined by this kind of manipulation, won't that just be an opportunity for people to create better prediction markets that are less vulnerable to manipulation?

And doesn't that just mean more resources and energy is going into solving the problem of determining the truth of past events (and, as a result given that these are prediction markets, the likelihood of future ones?)

And isn't that a good thing?

If those prediction markets are patronised by people who want to manipulate it, what drives customers to the new ones?

Making it less vulnerable to manipulation would entail exposing less information too. You probably wouldn't be allowed to know the current odds, which makes gambling the same as reading tea leaves.

Both sports betting and prediction markets are effectively the same as reading tea leaves anyway. You can determine the real odds in roulette or blackjack because those are closed games that have simple probabilities, but any odds given in sports betting or prediction markets are just fancy guesses

The odds in betting are the payout ratio. To hinder manipulation, the payout ratio would have to be hidden and then the platform can just always say you won less money than you did.

Perhaps, we overestimate the capabilities of capital markets

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