Prediction markets create harmful outcomes: a case study

9 points by paulpauper 6 hours ago | 3 comments

aurareturn
During the last US Election, I got bombarded by my Robinhood stock trading app to bet on Trump vs Harris election.
I couldn't help but think about how the act of betting with real money influences your own vote.
In traditional sports betting, you can't influence the results directly because you betting on a team should yield no difference in the outcome in theory. However, in elections, if you bet on one candidate, you're probably more likely to go out and vote for that candidate to increase your odds of winning.
Let's say you're not sure which candidate you're going to vote for yet. You read on the news that Candidate A is more likely to win. You place a bet on Candidate A. On election day, you go out and actually vote for Candidate A. You've just made a choice that had nothing to do with the quality of the candidate but rather just to increase the chance of a quick payout.
Will this be a problem?
- smcin
  That's not the issue - individual votes can't influence the Presidential outcome in even your own state. Your last scenario is incorrect if by 'candidate' you meant 'Presidential candidate' rather than 'Congressman/Senator/state governor/mayor/etc.' Since in US elections, very few states (and hence, very few voters) swing a Presidential election (in 2024 it was only AZ, GA, MI, NV, NC, PA, WI = 63m total population, only 18% of the US). Due to the ECV system/winner-takes-all, plus few states are in-play any election.
  Anyway, no, voters voting to ensure payouts on (comparatively small) bets they've made is a non-issue at the national level. What is the real issue here is whale traders rigging (much smaller) political futures markets which other traders are using as a hedge on politically-exposed financial trades.
  Look at the reported rigging and wash trades on Polymarket by UMA whales in 2024 and 2025:
  https://www.theblock.co/post/348171/polymarket-says-governan...
  aurareturn
  Every vote counts in swing states. I didn't imply that US Election is won by popular vote - if that's what you accused me of.
  Furthermore, you're looking into the past. I'm projecting into the future if gambling markets become even more mainstream.
  If I was getting app notifications, targeted ads, articles encouraging me to gamble on the presidential election in 2024, how will it be like in 2028? 2032? 2036?