The Rise of PredictIt

Understand the rise behind a new phenomenon in politics

The+United+States+has+made+profound+strides+in++trading+and+gambling+legislation+that+affect+PredictIt%E2%80%99s+rise.

Gazi Fuad

The United States has made profound strides in trading and gambling legislation that affect PredictIt’s rise.

Sports gambling has reached an all time high in the United States. It is also projected to increase in popularity in each coming year due to the relaxation of anti-gambling laws in state legislatures. As of now, six states have fully legalized sports gambling for everyone over 18. But what if I told you that there is a different type of gambling, one which is already legal across the country? What if I told you it revolves around politics? The future is here with the rise in the new app PredictIt. This site was the target of a hotly contested Supreme Court Case in 2014 that ruled in favor of the PredictIt platform ruled it was legal because it wasn’t classified as gambling, but rather as a trading platform that is useful for political data that academia could use. In order to become legal, the max bet placed on an entry must be a maximum of $850, with no minimum cost to enter a market.

“This site can change the game for politics and intersection between making money and real life political implications, for better or for worse,” said AP macroeconomics student Jake Axel ’19.

The fundamental structure of PredictIt is that it’s a stock market for politics. There are over 200 markets to bet on each day on the site, as topics range from predicting which candidate will win each state in the primaries, predicting polling averages, and predicting possible indictments and even impeachment proceedings in the United States. There are also world markets to invest shares into, such as if Nicolas Maduro will still be in power by the end of the year, amount of seats won by the Canadian Labor Party, or when Prime Minister May will abdicate her title as Prime Minister of the United Kingdom.

Users of the PredictIt platform can buy and sell shares on the market as things progress in real time at any time. For example, if a favorable poll result comes out for Joe Biden, it is likely to price of his shares to win the democratic nomination will increase, so users could either sell high or buy low depending on the change in real time. Shares are priced out of one dollar, so a 70% chance of an outcome occurring will yield a 70 cent price point on the site, where users can buy hundreds of shares at a time. This is different than traditional bets because it allows users to treat markets like stocks instead of one time bets, so users are constantly active by trading on the site. “This site can change the game for politics and intersection between making money and real life political implications, for better or for worse,” said AP macroeconomics student Jake Axel ’19.

There are downsides to the new and revolutionary platform, however. For instance, insider trading within politics can be near impossible track on the site, causing devaluation and inflation of prices. Also, because the site is open to anyone over the age of 18, there is a new platform for youth “gambling” addiction to take hold, albeit on a small scale. It is an exciting time for this new site, so be sure to keep tabs on PredictIt’s ascension and any future developments!

 

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