Opinion | Jon Kimball, David Rees: PredictIt Is Gambling, Not Political Science
Nonetheless, we’re glad it’s dying, and we thank the CFTC for saving us from certain doom.
Like many other lofty online experiments, in retrospect PredictIt’s descent into madness seems inevitable. In a project of the data company Aristotle and Victoria University of Wellington, It was marketed as a non-commercial scientific study on the wisdom of crowds and managed to circumvent online gambling laws. In practice, this means you can invest in markets like “Which Party Will Win the Senate Election in North Carolina?” Ranging from 1 cent to 99 cents, depending on how your fellow gamblers (ahem, investors) are currently holding, then, if desired, when you get a payout or lose your wager. Ride the market to its conclusion. .
In an age of unprecedented capital in politics, you can see a certain populist fascination with alternative ways in which you can intervene in elections for just a few cents. , combined the social prestige of playing in the market with the exhilaration of acting on one’s own political prejudices. That’s why I found it attractive to know-it-alls, assholes, and (most of the time) men.
We’ve been using PredictIt since the summer of 2016 when John started betting on die-hard Trump supporters who were sure Hillary Clinton was going to jail. John scored a big short with Donald Trump at the Iowa caucuses, Basically, he felt like he had discovered the money printing press. David, a friend of mine from 7th grade, suggested starting a PredictIt-themed podcast. We believed we could prove our integrity by discussing politics through our PredictIt portfolio. Unlike most professionals, we literally threw money on lip service.
PredictIt had a market for everything from a candidate winning a particular primary to the words uttered during a presidential debate. In its most frenetic and despicable state, there has actually been a market for how many times Trump will tweet in any given week. (It could be argued that this is where PredictIt started derailing as a scientific study, since it went a step beyond guessing the number of jelly beans in a jar.)
But it was the market around politician approval ratings that almost broke us. PredictIt used vote averages from the RealClearPolitics site for these markets. John spent hours figuring out which polls would be included in his RCP average. He set an alarm early in the morning when a new poll was released, maxed out his investment with the $850 limit mandated by PredictIt, and bought as high as 90 cents to give him an 8% return ( after deducting the fees) was squeezed out. Everything crashes when an unscheduled vote is released.
This speaks to one of PredictIt’s shortcomings as a study of political wisdom. Many profitable trades were nothing more than reactive reactions to breaking news. One of the tell-tale signs of PredictIt addiction is feeling the scope of political events shrink to seconds before you make your 10,000th Twitter update after breakfast. At the height of his mania, John spent 16 hours a day reading Twitter, trading on his PredictIt with nothing but gas station energy drinks and greed.
PredictIt not only rewarded greed, it also rewarded Schadenfreude. You’re betting on other traders so every time we make money it’s come at the expense of the fools on the other side of the political aisle, our poor sloppy devoid of decency, humanity and genius We loved taking their money.
Turns out they liked to take our money too. MAGA PredictIt traders rejoiced in our trauma (financial and otherwise) on Election Night 2016 when John’s all-or-nothing investment in Clinton’s victory evaporated in a matter of hours. They were laughing all the way to the bank as we cried into the mic. The morning after Trump’s confused victory, I recorded what I thought was the final episode of the podcast. we were broken we were broken We vowed never to log on to his PredictIt again.
But then the 2020 election cycle set the stage. The old itch is back. As we turned to the better angels of our nature, we heard only the chorus of demons shouting “Revenge!” Sure enough, John bet on Joe Biden and won enough money to lease a new car. David calls it PredictItMobile, and it’s literally an investment vehicle.
Still, I have to admit that the CFTC is right in calling PredictIt a bluff. If we had taken PredictIt’s demise seriously as an academic endeavor, or if we were part of the “whale” who transacted hundreds of thousands of dollars on his PredictIt, we would have made PredictIt’s demise sadder. You will feel As it stands, I’m grateful that hundreds of hours of podcast conversations have inspired me. We also appreciate what it has taught us about ourselves.