The WSJ ran an earlier article stating that unless you have access to a lot of data, computing power, and statisticians, you're going to lose on those bets.
Not true, polymarket and kalshi have a lot of system bets, basically bets where the other side is the market, and further they take a cut from the money gambled.
There are other things as well, like they control which side wins, so they can leverage trade or even swing trade internally with a few bot accounts, not saying that they do but I don't see a ToC that says they can't.
Polymarket can market-make, but so can you (i.e be on the both sides of the order book). You can't do that in a casino for instance.
They don't control which side wins (UMA voters do). You should read up about prediction markets and in general sport gambling. Sport gambling platforms with a "house" usually derive their odds from pvp markets. Polymarket is similar to a classic order book market.
1. Kalshi doesn't use UMA.
2. Yeah spend more money to get UMA votes to decide controversial decisions. That's how polymarket works.
I have a lot of experience with similar systems, that's what we call rigging the election.
Imagine a handful of anonymous UMA wallets dominate Polymarket’s contested resolutions, and reporters have linked some deciding wallets to positions in the very markets they judged.
> Polymarket can market-make, but so can you (i.e be on the both sides of the order book). You can't do that in a casino for instance.
That's like saying Elon can be a trillionaire, but so can you, I mean sure, anyone can, but how lucky do you think you have to be for your market to actually get any meaningful traction and for you to make any money. And even when you do, you are basically suggesting you should insider trade or rig bets to make money... I am certain that might be a flex for some but man I don't think that's the dunk you were looking for.
At the end the only folks making money are the markets, but who am I to stop the blind. Best of luck, hopefully you don't regret it. I only hope people don't get addicted or robbed by this stuff, rich people can have their own fun I don't really care.
Of course there is a house. You have a spread and probably a ton of other not so obvious fees. The house always wins by design, especially on polymarket.
No not really. Polymarket collects fees which are simple and deterministic. Bets on outcomes are tokens on the blockchain and can be "split" ($1 into YES/NO outcome tokens) and "redeemed" (YES & NO outcome tokens into $1). Placing a bet is simply a market order on a plain ol' central-limit orderbook for these tokens. The only house there is maybe the market makers, which isn't a house. If it were a type of "house", then NYSE/NASDAQ has a house too.
In general, so is sports betting at a casino. It seems many people don’t understand this. You aren’t betting against the casino, you are betting against the other gamblers. The house “wins” because of the juice, eg. even odds past out -110. A smart book is going to try to keep the money balanced, but that’s not always the case in practice
You don't need Colossus-level compute or a genius-level IQ to evaluate the question "Will the steam machine cost more than $700 at release", or "Will 2026 be the hottest year on record".
You are not evaluating those questions, you are evaluating the probability of that two things happening, and you need to evaluate it better than the other people to win.
There are no easy questions, the difficulty is set by the skill/investment level of your competition.
I'm confused by how you're modeling these markets.
Let's say I am quite sure that the Steam Machine will cost more than $700 dollars, and I buy a 'yes' lot for 65 cents on the payed-out dollar, those are the odds at my buy-in time.
Where exactly now do the other participants' bets on the same market influence my chance to win/lose? How am I up against them and not the question "will my prediction come true"?
Sure, before my buy-in the odds, and thus the value fluctuate on account of the market movements, but once I'm in I'm in?
How exactly do you think the price is set at 65 cents, if not by the other market participants? When you win, who do you think is paying you out from the other side of the bet? When you lose, who do you think your money goes to?
Not only did you miss the point of the conversation entirely, you're attacking a point I explicitly addressed in my comment. I well understand how the system works, ggps comment had me confused about their perspective.
I didn’t miss the point at all. Once you’re in, unless you want to sell your stake, you’re in. But the entire point is that at the time of your bet, you’re taking a position that’s inherently disadvantaged. If there was any more EV to be gained, people with more money than you would have exhausted it. So without insider information, you’re flipping a coin but the house takes a cut.
>if there was any more EV to be gained, people with more money than you would have exhausted it
In a perfect market that everyone participates in and in which everyone has perfect information, but not down here in messy reality. Your logic would have you you seeing a dollar on the ground and without further investigation go "Oh that can't be real, if it were someone would have picked it up already!" Or refusing to play chess against anyone because Magnus Carlsen could beat you.
The stock market isn't perfect and not everyone participates in it, and the data is extraordinarily clear that essentially nobody is capable of extracting a durable edge. Of the people who do beat the market in a given year, those who beat the market the next year appear to follow the exact same distribution as the market as a whole.
Prediction markets are worse, both on the surface and by the actual statistics. The house takes an enormous cut, and then you have the issue of trading against insiders. Only an absolute rube would put money into a market rife with insiders, when they don't have comparable information. And the statistics bear this out. Something like 80% of all profits are captured by the top 1% of profitable users, which are only 30% of the total user base.
Anyone who thinks they will consistently make sound bets in these platforms without actually having private knowledge is a complete fool.
Sure but that level of confidence is what would also eventually wipe you out because gamblers are not necessarily known for proper risk management. You could win 10 bets in a row but then it would only take one bet that you had 100% conviction on for you to lose and you get wiped out
You're sneaking in a prior assumption that people will act stupidly, and then make the argument "Well since they act stupidly they will have bad outcomes". That's like me claiming "Your startup is gonna fail, I can tell, because you'd need to be able to read and write to make it in business!"(sneaking in the prior assumption that the person in question is not in fact able to read or write)
Your strategic consideration is wise, though. 'Diversification' is one of the first things people will teach wrt investment literacy.
>just to be clear we are discussing gambling and not investing
Where's the demarcation? The whole point of this sub-thread was "you absolutely can predict the outcome of some of these markets". If you do your due dilligence/leverage your domain knowledge to buy a thing you expect to pay dividends at a later date, how is that not investing? Are government bonds gambling in your thinking?
Your prior about people acting unwise is still sneaking in via the assertion that we are talking about gambling.
What's wrong with me is I'm autistic enough to expect people to be able to follow arguments. I did not say "There are no differences between Government Bonds and Prediction Markets", what I said was "Let's find where the line between gambling and investing is, here's an example from which to pick apart the features that make gambling vs investing".
> I did not say "There are no differences between Government Bonds and Prediction Markets"
I never said that you said that, so now you are just arguing with a straw man that you just created, and your lack of ability to understand that is going to make a productive conversation impossible. Good luck with your gambling.
You haven't been putting in any good-faith effort into having a "productive conversation" for at least three of your responses, setting up "This is how things are" with no attempt to support this with any arguments, and have equally refused/dodged out of engaging with any of mine.
Your brain has just had your mental block up very obviously starting from your knee-jerk "what is wrong with you?" comment, isolating you from the scary prospect of being convinced by a consistent chain of logic, and now you're looking for a face-saving way of ejecting from the conversation.
I don't know much about gambling but is it not common to set for yourself max bets so your pool of cash doesn't deplete like you do when buying stocks or trading options so you can leverage up or down. I know it's a little different, but there is a similar principle.
Maybe only allow people to spend 1/5 their pool of cash per bet so it never reaches zero
You cannot bet 50/50 on that question. Hence, you aren't actually asked to evaluate whether the answer to the questions you posted is 'yes' or 'no'. You are instead asked 'is the actual chance of it happening higher or lower than the current breakeven chance as posted on Kalshi / Polymarket'.
Can you help me better grasp this? My intuition is thus: Sure, if I'm going at it like a proper rationalist, I'd have to do things like calculate expected value or whatever(I fully admit my lack of foundational knowledge when it comes to statistics), but at the surface the questions I feel I'm being asked is: "Is this a winning ticket?" and then "How much would you pay for a ticket set to win $1?" The latter question being obviously meaningless except for the obvious: It does not matter in the slightest, as long as I don't pay 1$ or more.
So you could see how the face odds are irrelevant to me, only my internal yes/no intuition? Obviously this is not optimized, opportunity cost etc etc, but is there a big hole in my thinking you could point me in the direction of?
The betting topic is only a part of the equation. Should you bet $100 to win $5 on the Steamdeck price? Should you sell your bet before the Steamdeck even comes out?
But that's about juicing the maximum amount out of each bet, not about the matter of simply winning or losing(which was what I was originally responding to). If any situation one doesn't take for all its worth is a loss then I agree that it's damn near impossible to win, but this would be true everywhere.
I am intentionally flattening these trades to simple win/loss affairs(not just for the sake of this argument).
You're playing the game at a higher level and "complaining" at the increased complexity(I don't mean to say you are complaining, I just couldn't think of a better word). You're talkkng about the 80% that get you the last 20%, I'm talking about the 20% that get me the 80.
