Senators ban themselves from prediction markets after candidates bet on own races

Senator decries "blatant, brazen corruption," wants to target Trump admin next.

See full article...

 

[numerobis]

Not a fan of prediction markets, but is betting on yourself to win something in a competitive event really a corrupt action? One assumes you want to win already, and you can't directly control whether you win or not. Betting against yourself is obviously corrupt because you can easily sabotage yourself, but betting on yourself does not seem like a bad thing.

You have non-public information about your odds. In itself, that should not be allowed.

Banning just the candidate is silly; there's a lot of other people with non-public information about the race, such as all the campaign staff and volunteers, their families and friends, polling agency staff members (until they publish the poll), etc.

 

[numerobis]

What are the odds that they'll do it anyway?

I'm sure you can put a bet in at Kalshi for it.

 

[numerobis]

Nobody has insider information on elections (outside of a candidate deciding to tank/drop out). This is a strong reasons for people to be allowed to bet on election outcomes.

lolwat?

I guarantee you, campaigns have lots of insider information that they do not share with the public.

 

[numerobis]

Is it the corruption they are upset about or the blatant, brazen part?

It's the public finding out part they're upset about.

 

[numerobis]

Though everything else mentioned is clear cut insider trading, using non public knowledge to make a truck load of money, this does not apply to politicians (or athletes) betting on their own races/games. But I understand why it should be illegal.

It is not insider knowledge for a politician or athlete betting they would win, and ending up winning, since they cannot unilaterally flip a magical switch and win. Athletes require skill, would-be politicians need to be majority elected, and both compete against other candidates.

But self-betting provides incentive to throw matches or, for politician candidates, to sabotage their campaign. Losing, unlike winning, can be exclusively decided by a single party. So since it would be super weird, legally questionable, and probably untestable and unenforceable, to let athletes & politicians self-bet but only that they would win, outlawing self-betting makes a lot of sense.

To believe this you need to imagine:

Politicians don't know how many volunteers they can mobilize, they don't know how many donations they've raised, they don't know how their voter outreach efforts are going, they haven't commissioned a private poll, they don't know they have oppo research they're going to leak to the press in an October surprise, they don't know that the press just reached out to them regarding a scandal they're about to publish.

Athletes don't know their health issues, they don't know their teammates' health issues... I imagine there's plenty of other things they could know, but I'm not in that space.

 

[numerobis]

Self-betting is disallowed because if it was okay people could bet against themselves (alone or as a part of a scheme with others), lose deliberately and make 100% guaranteed money - a crapload of it, in fact, if they were the most popular candidate. That option and ability to throw the match or race is the only "insider" part, unlike conventional insider trading.

No matter what "insider information" politicians (or athletes) have, a win is never fully guaranteed. But even if it was 99% guaranteed, much of that insider information should agree with external polls. So if the politician was considered the most favorite to win, and ended up winning, they'd make peanuts from self-betting if they bet they'd win, since most bets would be in their favor.

Put another way, you can only throw a match/race by losing. Throwing it by winning is not a thing*. But since self-betting cannot be restricted to wins only, it is disallowed.

*On second thought it could be, for both athletes and politicians, but the scheme would need to be far more complex, time-consuming and elaborate: Instead of being the overwhelming favorite to win, and losing on purpose, a candidate would need to be the least expected to win, an underdog.

An athlete would have needed to spend years deliberately underperforming in public, while performing great in private. Similarly, a lukewarm candidate politician would need to have kept a low profile for quite a while, then pulling a political ace card when it mattered and/or successfully attacking with smear campaigns or scandals their opponents. Far more difficult, with still not a 100% guaranteed win, but not impossible. So either way self-betting should not be a thing.

Insider trading doesn’t require 100% success rate to be problematic. If it did, then no insider trading of any kind would be problematic, since there’s always a risk that your insider knowledge turns out to be irrelevant due to some massive external event.