Since my post a couple weeks ago complaining about prediction markets, there has since been a story of people messing with a sensor at de Gaulle Airport, and this brought into focus for me another reason why prediction markets are bad: there is now a profit motive for tampering with... basically anything... and that imposes a massive set of new costs on society, which these markets are offloading onto us.
What I mean is, society tends to have two different standards for "how defensive do we need to be, how many guardrails do we need to have in place for this situation", based on whether or not there is a profit motive. If people can profit based on exploiting something, we have to have regulations, additional safety mechanisms, policing, things built to higher standards, and so on, under the assumption that the thing now can't simply be left alone. But if there's no profit motive, we can be chill about it: not that there's zero precautions, but a lower degree of vigilance is required. The FAA will happily let you fly a deathtrap you built in your garage, as long as it's you and only you in the plane. But the instant you start offering flights for money, an encyclopedia of regulations kicks in. That's as it should be.
But prediction markets upend that completely. I'm sure it wasn't the case that the temperature sensor at de Gaulle Airport was literally completely out in the open for anyone to walk up to and tamper with, but it probably wasn't exactly heavily-guarded either. Because why would it be? There was no reason why anyone would mess with a sensor at the airport. But now there is, so it needs more security, the Paris police have to track down whoever did this, and so on. That's a cost imposed on us by Polymarket's profits, which wasn't there before, little different from pollution.
And given the basically-unlimited scope for prediction market betting, that applies to everything. Everything now needs expensive protection, because now anything and everything has a profit motive for tampering, thanks to prediction markets.
If they shouldn't be illegal, at the very least we need to tax the bajeezus out of them, to make them pay for these externalities they've dumped on the rest of us.
