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