"This is frustrating to admit, because prediction markets can be societally useful: it is important to have good forecasts on federal government shutdowns, landfall of hurricanes in the Southeast, and traffic through the Strait of Hormuz"...
Prediction markets do not provide good forecasts, and are in no way "societally useful".
surprisetalk
I've been told that prediction markets provide reasonably good forecasts compared to most other methods. Could you help me understand why that might not be true?
gamerdonkey
This is one example from a source I just happened to read this morning, which is otherwise pretty positive about the prediction markets.
> Beyond fears about bad actors attempting to distort the markets for profit, some political operatives say the sites rarely deliver political forecasts that are different from traditional polling.
> For instance, polls during Wisconsin's gubernatorial primary showed Democrat David Crowley lagging other candidates by wide margins. Kalshi similarly projected Crowley as a long-shot candidate — but Crowley landed a surprise win.
> "It appears that there really aren't any predictions here, they're just reacting belatedly to public information, like polls and news stories," said Eddie Vale, a Democratic strategist in Washington who worked on Crowley's campaign. "If it was just a fun entertainment tool for political junkies, fine, but to me, all of this is a marketing sheen for an online gambling operation."
So it's not really that they provide bad predictions, it's more that they don't offer anything new. Except, of course, in the case when someone is using insider information in an attempt to profit. All this while also having the downsides of skimming money off every transaction and encouraging gambling habits.
solidasparagus
It feels like this article is trying to have it both ways. It claims that the Terry Rozier bet wouldn't be viable in pre-2017 because people who be savvy enough to notice the weird bet and retaliate. But in the legal market, the odd bet was noticed immediately, prop bets on Rozier were shut down before tipoff, and there was a federal investigation into it.
It's a weird claim to act like the legal market enabled a successful bet that the prior illegal market would have stopped.
joezydeco
Nothing wrong with a little frontrunning. Ask any HFT firm how do to it right.
Prediction markets do not provide good forecasts, and are in no way "societally useful".
> Beyond fears about bad actors attempting to distort the markets for profit, some political operatives say the sites rarely deliver political forecasts that are different from traditional polling.
> For instance, polls during Wisconsin's gubernatorial primary showed Democrat David Crowley lagging other candidates by wide margins. Kalshi similarly projected Crowley as a long-shot candidate — but Crowley landed a surprise win.
> "It appears that there really aren't any predictions here, they're just reacting belatedly to public information, like polls and news stories," said Eddie Vale, a Democratic strategist in Washington who worked on Crowley's campaign. "If it was just a fun entertainment tool for political junkies, fine, but to me, all of this is a marketing sheen for an online gambling operation."
https://www.npr.org/2026/08/28/nx-s1-5945290/fake-poll-merid...
So it's not really that they provide bad predictions, it's more that they don't offer anything new. Except, of course, in the case when someone is using insider information in an attempt to profit. All this while also having the downsides of skimming money off every transaction and encouraging gambling habits.
It's a weird claim to act like the legal market enabled a successful bet that the prior illegal market would have stopped.