Define "net loss to the society." Society is just a group of individuals. If my counter-party was a democratic aide hedging that they wouldn't have a job come January, was it a real loss for them? The money I've earned on prediction markets has certainly allowed me to spend more money in the economy. What if a trump supporter watching the market saw what a longshot it was and decided not to go to the Capitol on January 6th?
I realize I'm an N of 1, but I've participated in prediction markets since 2019 and am just above 5 figures in profit. Not life-changing money, but it certainly doesn't hurt.
I'm pretty conservative in my predictions and just think there is a lot of free money on these sites. Maybe that just supports the sentiments of this article and most of the negative comments on this post.
There are certainly cases where I got run over by the steamroller picking up nickels, but in general that's few and far between. A good example is getting trump losing the 2020 election at 90% after the election in November. If you find those types of markets and compound the earnings it's a pretty nice savings account.
I've also been burned by insider trading and vague rule interpretations but at this point, you chalk it up to the nature of prediction markets. I now try to stay away from markets that are more manipulative (e.g. mention markets).
I don't understand the hostility to prediction markets. There are definitely hedging opportunities and we're all adults.
I worked in a hat factory as a summer HS/college break job. I stood at the end of a table and inspected the initial wool cut outs that would eventually be formed into the hats. The hats would go through a machine that sprayed them with god knows what chemicals, someone would capture them out of the machine and place them on the table, while the rest of us at the station would turn them inside out and hold them up to the light to look for flaws (thin spots).
I would look at the clock every 45 minutes to see that only 10 minutes had passed.
I was one of the lucky ones though because every hour or so, I got to move to another station to hang newly-formed hats from another station on a drying rack that would take them to the next floor.
I came across this article after Googling the Jefferson quote cited at the beginning of the article: “How much pain have cost us the evils which have never happened.” I heard that quote this morning in a podcast interview with Ken Burns and it hit real close. I thought it might be helpful to any other worriers out there as we start the new year.