Very close already. Death threats went to this journalist; seems someone bet on missile hits. https://factkeepers.com/polymarket-gamblers-vow-to-kill-jour...

It also incentivizes leaks from insiders, sometimes endangering others. A soldier was charged for betting on a military operation. https://www.justice.gov/opa/pr/us-soldier-charged-using-clas...

And of course throwing pro sports, but that's been happening for ages. Sports has always been crooked: eg the Eupolus Scandal from 388 BCE.

Yeah. You aren't allowed to set up a life insurance policy on someone else's life, or a fire insurance policy on someone else's home. For obvious reasons. But buying an event contract that pays if someone dies or someone's house burns down is fine?

> as they incentivize people with power to manipulate the real world

I would argue that the ratio between "power" and "money to be won" is too big (at least right now) for this to materially matter. No fortune 500 CEO is going to postpone a product launch so they can win $5,000 on polymarket. But some random guy will get his hair dryer to win a socially meaningless weather bet.

It's not discussed often, but the liquidity of these markets is often awful, and you can only win as much as people are willing to take the other side. Which is harder when people know it's easy for insiders (or the outcome decider themselves) to play the other side.

Basically the more socially consequential the outcome you control, the less likely you care about a betting market, and the less the betting market cares about you.

The real winners are people with little or no power to effect outcome, but with insider knowledge. And athletes.

> I would not be surprised if people are murdered at some point to reap the payout of some related bet.

https://en.wikipedia.org/wiki/Borussia_Dortmund_team_bus_bom...

This is very naive. Many people have incentives to manipulate the financial markets, also with real world consequences. Should we ban financial markets as a result?

Do you really think that there are no people, who have bet on the price of something in one direction or the other, who enact real world consequences on people or other entities in order to ensure their bet? This is par for the course.

I think they are illegal already in most places under the insurable interest doctrine.

Its a small step from betting on ships sinking to making sure they go down.

> should be illegal globally

Let's not pretend that Spain of all places is caring about horribly destructive psuedo-gambling.

Banning "unregulated gambling" is just pressure to make sure that the Spanish gambling racket stays intact for the bookies already at the top.

Someone should place a bet on the lifespan of the polymarket founders.

> illegal globally

I would replace them with https://manifold.markets/ or maybe heavily regulate them. they do have practical utility in forecasting

Yup, that idea has been around for a while: https://cryptome.org/ap.htm

The genie is out of the bottle. Crypto-only underground prediction markets will always exist. I think it is better to heavily regulate legal options instead of pushing them underground. That didnt work for drugs or prostitution, and it wont work for gambling.

They become hyperstition engines.

> they incentivize people with power to manipulate the real world in horribly destructive ways to win a bet.

How does the same line of argument not also suggest that stock markets be prohibited?

Unfortunately there are ways for people to spend money on these sites. That's why the Netherlands has legalised gambling because the bad websites couldn't be stopped.

That happens already at a much larger scale, without prediction markets.

These markets decentralise that information asymmetry.

Historically similar services have also been used to try to manipulate the real world by using bets for creating opinions. Like if you get to vote between candidate x and y and x leads by 75% to 25% on Polymarket maybe you don't vote for y even if the real numbers may be way closer.

They'll be illegal anywhere democracy wants to properly function. How can I bet on this ripe assumption? Is there a market somewhere?

I would go further than this: all forms of online gambling should be banned, globally. It's probably sufficient to remove them from app stores and to remove their access to the international financial system, which is very doable.

The astute observer might say "ah but what about crypto gambling sites like Stake?". This problem isn't as intractable as crypto bros might have you believe. You simply issue arrest warrants for people who allow your citizens to gamble in violation of your local laws and you threaten any bank, brokerage or financial institution that allows them to convert their crypto in fiat currency. This is fairly easily covered by KYC/AML regimes alreaqdy. It won't be perfect. It doesn't have to be. As soon as someone can't be an open billionaire by selling crypto gambling without fear of being extradited to the US if they travel internationally, the shine disappears real quick.

Insider trading is already illegal. What needs to be regulated is not markets, it is politicians. Once that is done, markets can peacefully continue the way they are.

Maybe we should ban the stock market too.

In 2017 someone tried to bomb the bus of the BVB soccer club, after he bought puts options on the BVB stock.

https://en.wikipedia.org/wiki/Borussia_Dortmund_team_bus_bom...

Prop betting on a transparent and equitable Exchange is a perfectly reasonable and egalitarian proposal - it's the Betfair Exchange vs Betfair Sportsbook model expanded outside of the scope of sports.

Allowing prediction markets to overlap with criminal incentives is a platform TOS and moderation problem; not a prediction market or betting exchange problem.