Hard Fork
Can the U.S. Rein in Prediction Markets? + Joanna Stern on Her Year of A.I. Experiments + Our Producer Goes to Attention School
Why It Matters
Prediction markets are becoming mainstream betting platforms, but without clear regulation they risk eroding public trust and encouraging illicit behavior, from insider trading to gambling addiction. Understanding these dynamics is crucial for listeners who may be tempted to participate or for policymakers shaping future oversight.
Key Takeaways
- •Prediction markets exploding in media and public awareness.
- •Insider trading scandals expose military and political betting abuses.
- •CFTC struggles to regulate; calls for SEC oversight.
- •States and countries banning platforms amid gambling concerns.
- •Experts urge stricter rules, age checks, and market surveillance.
Pulse Analysis
The past year has seen prediction markets burst into mainstream culture, from ads plastered across New York to viral bets on the Super Bowl halftime show. High‑profile insider‑trading cases illustrate the risk: a U.S. Army sergeant allegedly earned more than $400,000 by wagering on Venezuelan President Nicolás Maduro’s removal, and a temperature‑sensor tampering scheme in Paris was linked to a $14,000 profit claim. Data from the Anti‑Corruption Data Collective shows long‑shot military bets win about 52 % versus a platform‑wide 14 % average, while the Wall Street Journal reports over 70 % of users lose money on Polymarket. These scandals undermine the promise that prediction markets can aggregate unbiased crowd wisdom.
Regulators are scrambling to impose order. The Commodity Futures Trading Commission has sued several states that tried to ban the platforms, asserting exclusive jurisdiction, yet the agency’s modest staff limits enforcement capacity. Lawmakers responded with a Senate rule barring senators from betting and a bipartisan bill to prohibit members of the legislative and executive branches from trading on these markets. Internationally, Brazil, France and Hungary have already blocked sites like Calci and Polymarket as illegal gambling. The debate now centers on whether the CFTC should remain the overseer or the better‑resourced SEC should assume responsibility.
Experts argue that a hybrid approach is needed. Self‑regulation, such as Calci’s ban on insider trading and “death markets,” is a first step, but mandatory age verification, self‑exclusion tools, and stricter advertising limits are essential to curb gambling addiction. A dedicated regulator with powers to monitor trades, investigate suspicious activity, and enforce penalties would protect market integrity and restore public confidence. If these measures materialize by year‑end, prediction markets could shift from a wild‑west gamble to a useful information‑gathering tool.
Episode Description
This week we’re taking another look at prediction markets and a new series of scandals. Is Congress finally ready to rein them in? Then, the journalist Joanna Stern returns to the show to discuss her new book “I Am Not A Robot,” all about turning her life over to a chatbot for a year. And finally, Hard Fork’s Rachel Cohn reports back on her month attending classes at the Strother School of Radical Attention, the center of a movement to resist the commodification of attention by technology companies.
Guests:
Joanna Stern, chief everything officer at New Things
Rachel Cohn, producer of “Hard Fork”
Additional Reading:
Soldier Used Classified Information to Bet on Maduro’s Ouster, U.S. Says
Soldier Pleads Not Guilty in $400,000 Betting Case Over Maduro’s Ouster
French weather service alerts police to tampering after suspicious Polymarket bets
The Multi-Trillion-Dollar Battle for Your Attention Is Built on a Lie
We want to hear from you. Email us at hardfork@nytimes.com. Find “Hard Fork” on YouTube and TikTok.
Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify. You can also subscribe via your favorite podcast app here https://www.nytimes.com/activate-access/audio?source=podcatcher. For more podcasts and narrated articles, download The New York Times app at nytimes.com/app.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
Comments
Want to join the conversation?
Loading comments...