At least one person got a $400,000 payout when former Venezuelan leader Nicolas Maduro was captured by the U.S. this month – someone who bet $30,000 on the site Polymarket.
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This huge win has come with backlash, and U.S. legislators calling for a crackdown on insider trading in betting markets. Andrew Busch, former chief markets intelligence officer at the Commodity Futures Trading Commission and economic futurist at AndrewBusch.com joined WBBM Newsradio’s Rob Hart this week on the Noon Business Hour to discuss these markets and some of the dangers associated with them.
“When I was at the CFTC, which is going to be the regulator for this stuff, they did not want to have prediction markets in the United States at all,” said Busch. “They thought that they could lead to really bad outcomes.”
In October 2024, just before the 2024 presidential election, a federal appeals court overturned an effort by the CFTC. It allowed people to bet on the election via the site Kalshi and Busch said that company recently won a lawsuit that allows it to keep running. He noted that Polymarket, the site where the Maduro bet was handled, is “outside of the scope of regulatory grab,” in the U.S.
A glance at the homepage of Kalshi this Friday showed bets on who President Donald Trump might nominate as the new chair of the Federal Reserve Bank, whether the president will buy part of Greenland, football, hockey, the best actor Oscar winner, A$AP Rocky’s new album and when Supreme Leader Ali Khamenei might be out as leader of Iran. Polymarket had similar bets, with the Iranian question at the top of the page, as well as bets on Portugal’s presidential election.
Going back to those “bad outcomes” Busch mentioned, he elaborated a bit.
“Let’s say that you’re allowed to bet on whether or not someone’s going to get assassinated, right? And then, you know, there’s betting on that, which was terrible, but then maybe you have prompted an actor to actually do something with that,” he explained. “That’s the extreme you know kind of example of where this stuff can go.”
Busch said that there’s already betting on whether certain cities in Ukraine will fail as an illegal Russian invasion of the country continues into yet another year. All in all, amid the more innocuous bets, many of the wagers on these sites could be dangerous, he told Hart. Busch thinks things like war and assassinations should be off the table when it comes to these markets.
“These things are growing rapidly and they have been causing some problems in a lot of different worlds, not only prediction markets, but the sports betting markets as well,” he said.
While less dire than war, concerns about sports betting were in the spotlight this week due to new information coming out about a scheme to rig NCAA and Chinese Basketball Association games. More than two dozen people were involved, according to reports.