I Found it. The Absolute Dumbest Hit Piece Yet.
They should retract this immediately.
Every once in a while, someone writes something so spectacularly wrong that you almost have to admire the confidence. I discussed it in depth on the most recent episode of Predictable w/Stu.
Do make sure and watch it, even if it’s just to help us fight the MSM and the nanny state, who have decided prediction markets are scary and bad. They’d rather you not see this:
The latest swipe at prediction markets comes in the form of an opinion piece in The Hill arguing that prediction markets are becoming a dark, insider-driven menace. I don’t agree with that conclusion, but that’s not the main problem with the piece. The problem is the author doesn’t seem to understand the most basic mechanics of how these markets actually work.
Look, I’m perfectly happy to debate whether prediction markets are good, bad, gambling, investing, or something in between. Those are interesting conversations. But before we have them, can we at least agree that you should probably know even the most basic facts of what you’re talking about first?
The article claims companies like Kalshi and Polymarket set odds the way sportsbooks do and need to balance action to stay profitable. Did anyone at The Hill bother to check? Anyone looking at prediction markets will realize in about ten seconds that no, they don’t need to balance action to stay profitable. They’re marketplaces. Buyers and sellers determine prices. The exchanges collect fees. That’s Prediction Markets 101, and getting that wrong is like writing about the stock market while assuming the New York Stock Exchange picks Apple’s share price every morning.
If we’re going to have a serious national conversation about prediction markets, we deserve better than that.
The good news hiding behind the bad headlines
Ironically, one of the biggest stories this week actually showed the system working.
The White House teleprompter operator allegedly used inside knowledge of President Trump’s speeches to profit on mention markets. That sounds terrible… until you realize who caught it.
Kalshi.
Perhaps the writers at The Hill aren’t aware, but Kalshi is not part of the FBI. It’s (GASP!) a prediction market! The exchange flagged suspicious activity, alerted regulators, and kicked off the investigation. That’s exactly what you’d want a regulated financial marketplace to do. It’s evidence the safeguards are working, not proof they’re failing.
That’s a pretty important distinction.
A few opportunities worth watching
We also caught up on everything I missed while I was on vacation.
The Maine Senate race continues to get stranger by the day, and I think the market may be underestimating Susan Collins after Democrats appear ready to nominate Troy Jackson. I’m not predicting a Collins victory, but I do think the current price deserves another look.
We also cashed another LeBron James trade based on something that had nothing to do with basketball and everything to do with timing. Sometimes the best prediction market plays aren’t about knowing more than everyone else. They’re about thinking one step ahead.
That’s usually where the value lives.
Tonight, we go live
Speaking of value...
We’re back live tonight, and we’ve got plenty to dig into.
We’ll preview Arizona, take another look at the rapidly changing Lindsey Graham replacement markets, answer your questions, and, knowing this audience, someone will probably find a completely ridiculous market I’ve somehow never seen before. Those are usually my favorite parts of the show anyway.
If you’ve been meaning to jump into prediction markets, live shows are honestly the best place to do it. We can react to the news in real time, look at prices as they move, and occasionally talk each other out of doing something stupid.
Come hang out with us.
See you tonight.
Stu, you like prediction market stories, right? Good or bad? Well, here's a good one for you.
During the lull in elections for the past couple of weeks, I took the time to build my bankroll with sports markets, and only for those sports I felt comfortable placing a position on. A couple of baseball games, the World Cup, and a tennis game. Long story short, I'm up about 34% overall from my initial deposit. That didn't come without considerable risk, but that was minimized with two of your amendments: a "sure fire" thing is never sure fire, and time equals risk. Basically, I waited until the games were pretty much decided at the last possible moment to place the winning position. Not thinking I'm going to do that again because one change in the last moment of a game could ruin everything. I'm just going to stick to house money now.
Hope you enjoyed this, and looking forward to tonight.
There’s a Kalshi market for whether a human will land on Mars before California starts the high-speed rail. I don’t want to invest in it (because it doesn’t pay out until 2050), but I think it’s funny that it exists.