[HN Gopher] Effort to prevent government officials from engaging...
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Effort to prevent government officials from engaging in prediction
markets
Author : stopbulying
Score : 131 points
Date : 2026-03-07 20:55 UTC (2 hours ago)
(HTM) web link (www.merkley.senate.gov)
(TXT) w3m dump (www.merkley.senate.gov)
| stopbulying wrote:
| > Following multiple public reports on the growing influence of
| prediction markets and their potential for corruption, Merkley
| and Klobuchar introduced the _End Prediction Market Corruption
| Act_ -- a new bill to ban the President, Vice President, Members
| of Congress, and other public officials from trading event
| contracts. The bill will ensure that federal elected officials
| maintain their oath of office to serve the people by preventing
| them from trading on information that they gained through their
| role.
| aurareturn wrote:
| It makes sense to ban government officials from betting. It's
| hard enough to enforce insider trading. With legal betting, it's
| literally impossible.
|
| Another worrying issue with betting is just how prevalent the
| last election was in betting markets. In elections won by
| thousands or even just hundreds of votes, betting markets can
| skew results where betters vote for someone just purely for the
| bet and persuade, shill for the person they bet on.
|
| I can imagine betters placing a bet on a candidate and then
| launching a defamation campaign against the other.
| themafia wrote:
| > you have the perfect recipe to undermine the public's belief
| that government officials are working for the public good
|
| The public already does not believe this. Less than 25% approve
| of your work.
|
| > This legislation strengthens the Commodity Futures Trading
| Commission's ability to go after bad actors
|
| And this is designed to "increase trust?"
| staplung wrote:
| Unfortunately, it's not just _elected_ officials that are
| problematic for prediction markets. The Secretary of War, for
| instance is not an elected official nor are leaders of the armed
| forces and there is definitely a prediction market for war.
| Multiply this by every powerful appointee and every career
| bureaucrat and see what kind of picture that paints.
| lukev wrote:
| If we're not going to ban prediction markets, we could at least
| make it a requirement that all bets are public and associated
| with a real identity.
|
| That'd go a long way towards curbing the corruption of these
| things, while preserving (or even greatly enhancing) their
| "predictive power."
| SteveNuts wrote:
| Seems like you'd get a secondary proxy market popping up
| overnight. Like domain privacy for degenerates.
| gruez wrote:
| That's why you make the regulations like AML regulations,
| where it's a crime to obfuscate the source of the wager
| too.
| treetalker wrote:
| Don't forget relatives, useful idiots, and billionaire special
| envoys!
| 9dev wrote:
| The latter two groups often overlap, even
| andai wrote:
| It's also low-ranking members of the armed forces that have a
| lot more information than you'd expect. If you just banned the
| high ranking members from prediction markets, I actually don't
| think very much would change. (There would just be slightly
| more delay.)
| cyanydeez wrote:
| I mean, North Korea has some very deadly incentives if this
| whole "buy your prediction" market is brought online.
| ronsor wrote:
| If we can't ban them from trading stocks, good luck with this.
| pear01 wrote:
| Don't be needlessly cynical.
|
| This is a good effort. So is the ban on stock trading. This
| administration is such that it is bringing corruption to the
| fore in a way not seen in generations. Things are always hard
| to pass at the start. Keep pushing and this administration will
| create a massive opportunity to swing the pendulum if we can
| (as hard as it is now) retain some optimism.
| matthewfcarlson wrote:
| To the people downvoting you, you just said the
| administration is bringing corruption into the public view.
| Some people believe they are exposing and some believe they
| are currently doing it. Either way, corruption and profiting
| off of a political position is certainly top of mind for many
| Americans atm.
| pear01 wrote:
| Ah interesting thanks for pointing out the ambiguity in my
| statement. I definitely did not intend that ambiguity but
| you also rightly point out it sort of works either way. I
| would think this would lead to more upvotes than downvotes
| but perhaps a trend of cynicism also is reflected in
| assuming the least favorable interpretation.
|
| Thanks for pointing that out.
|
| For the record, I meant the latter. Let the downvotes
| commence!
| ddtaylor wrote:
| Blindly trying things without taking signals from outcomes of
| the past seems like madness. If you have evidence you have
| failed at walking many times, should you be putting your
| energy and efforts into running and jumping instead of
| continuing to pursue walking?
| pear01 wrote:
| That's not what I'm doing and I think you know that. Reform
| takes time. If everyone gave up just because things were
| difficult n times nothing in government would ever change.
| The state is not a startup. Behind every significant piece
| of legislation is a battle.
| tlb wrote:
| It's easier to ban things before they become entrenched than
| after. Banning stock trading is hard today because most
| senators have been doing it for years before getting elected.
|
| I'd be in favor of senators doing prediction markets, just
| limited to small dollar trades so they can get better at
| predicting.
| ddtaylor wrote:
| Most criminal activity is hard to change when it's already
| happening. There is no reason to mollify the problem further.
| tokai wrote:
| It wouldn't be a problem if the law was actually applied to
| prediction markets. If crime is de facto already legal, more laws
| seems like the least of ones worries.
| romaaeterna wrote:
| > A Mystery Trader Made $400,000 Betting on Maduro's Downfall
|
| > Prediction market trader 'Magamyman' made $553,000 on death of
| Iran's supreme leader
| soared wrote:
| You can review that user's trade history. It's a bit weird for
| sure, but they didn't just stop in to bet on those. They've bet
| huge sums on every prediction relating to Iran, Israel, sp500,
| recessions, etc.
|
| They've been betting for 2 years but only recently starting
| profiting a lot.
|
| https://polymarket.com/profile/%40Magamyman
| plantain wrote:
| If they're smart they'll have multiple accounts with bets
| each way netting to ~0 on all kinds of topics, and just omit
| the losing trade on the information they actually have.
| schnebbau wrote:
| The answer is simple - you price in the chance that an insider
| could have an edge on you when making your prediction. It's all
| part of the game.
| wizzwizz4 wrote:
| We also care about the world _outside_ the prediction markets.
| If decision-makers have an incentive to "throw the match" by
| making surprising decisions, that will impair the decision-
| making, which will affect the rest of us. Likewise,
| sufficiently-wealthy actors will be able to manipulate the
| behaviour of officials by betting against the behaviour they
| want to see, much like an assassination market.
| idle_zealot wrote:
| Or, and I beg you to consider this radical position: we arrest
| people who break the law (insider trading is illegal) and those
| who knowingly help them to do so (the operators of the
| prediction markets).
|
| How quickly we accept the death of even the _ideal_ of rule of
| law in favor of embracing a return to an explicit rule by
| might, fuck-you-got-mine mentality.
| GaryBluto wrote:
| It doesn't break the law.
| jpmoral wrote:
| Aren't there already basic laws against officials profiting from
| their role?
| trinsic2 wrote:
| How is any of this going to get passed without enforcement of
| anti-trust and an end to citizen united?
| gruez wrote:
| What does anti-trust enforcement and citizens united have to do
| with being able to pass laws on insider trading?
| int32_64 wrote:
| The prediction market trend will "work itself out".
|
| It will become common knowledge that these platforms are
| exploited by insiders so people "trust" apparent flagged insider
| bets, so people will try to piggyback insiders, then it will be
| revealed that a sophisticated party with infinitely deep pockets
| burns massive amounts of cash to manipulate odds and these
| piggybackers will be burned badly, so in the end classical
| gambling and sports betting will resume as preferred ways for
| gamblers to lose money because of their disgust with the
| manipulation.
| ChrisArchitect wrote:
| Related:
|
| _War Prediction Markets Are a National-Security Threat_
| https://www.theatlantic.com/technology/2026/03/polymarket-in...
|
| (https://news.ycombinator.com/item?id=47291036)
| nomilk wrote:
| I recall a few finance papers saying (paraphrasing)
| "approximately all private info is reflected in stock prices".
| The same is obviously true of prediction markets. If government
| officials are banned, they'll just give a little wink to a
| relative or friend, and the prediction markets will reflect the
| private information.
|
| On a personal note, I find these markets incredibly useful in day
| to day life. There's been a joke for a while that putting
| site:reddit.com in your google search is the only way to get
| (some) real information. It's becoming true that putting <search
| terms> AND (kalshi OR polymarket) is how to get accurate info.
| mvkel wrote:
| Accurate info on what? Most markets have almost no liquidity,
| outside of sports and crypto
| zaik wrote:
| Elections usually also have good liquidity.
| nomilk wrote:
| Political outcomes is the biggest. Businesses (and
| individuals) can be strongly (financially) affected by who's
| elected. I'd been very curious in the past about political
| outcomes but had never used prediction markets, so I built a
| little tracker that inputed the probabilities based on
| scraping ~14 betting sites. I had to do it on a market-by-
| market basis, and there were lots of edgecases. Having them
| all in one place (or two; kalshi and polymarket) makes life
| much simpler.
|
| Prediction markets have also directly affected my travel
| planning, helping me avoid a country that wasn't at war at
| the time but had (in my judgement) a too-high risk of war.
|
| You're completely right about thinly traded markets; those
| are way, way less accurate. But they also offer the greatest
| opportunity for someone to bet the other way, which has the
| effect of 'correcting' the market.
| BSVogler wrote:
| https://en.wikipedia.org/wiki/Efficient-market_hypothesis
| fkarg wrote:
| Does this include the stock market?
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(page generated 2026-03-07 23:00 UTC)