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PaperclipPerfector  1mo ago (text post)   26614 thread views

Culture War Roundup for the week of March 30, 2026

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Polymarket removes prediction market on when the downed F-15 pilots would be rescued.

Yesterday, a two-seater USAF F-15E was shot down over Iran. One of the crew members was successfully rescued. The other is still unaccounted for. This was big news in the United States, and probably across the whole world.

Polymarket, being Polymarket, put up a prediction market on when the pilots would be rescued. United States service members are a sacred class in our society, and so this market got a lot of heat, including from congresspeople.

Polymarket responded by immediately removing the market, citing “integrity standards”.

We took this market down immediately as it does not meet our integrity standards.

It should not have been posted, and we are investigating how this slipped through our internal safeguards.

Of course, the market doesn’t violate Polymarket’s integrity standards. No specific policy or clause is cited. Anyone browsing the “geopolitics” section on Polymarket knows that war markets are allowed. They even provide a helpful note on Middle East conflict markets to let you know what their position is:

Note on Middle East Markets

The promise of prediction markets is to harness the wisdom of the crowd to create accurate, unbiased forecasts for the most important events to society. That ability is particularly invaluable in gut-wrenching times like today. After discussing with those directly affected by the attacks, who had dozens of questions, we realized that prediction markets could give them the answers they needed in ways TV news and 𝕏 could not.

It goes without saying that removing the pilot rescue market flies in the face of the principles stated above. Maybe Polymarket never believed in them, and markets on foreign wars involving Eastern Europeans and Middle Easterners was a cynical way to get eyes on their website.

So if the stated rules are fake, then what is the real rule? I don’t think it is, “respect American servicemen,” exactly. I suspect that, “do not jeopardize American combat operations,” is a much better fit for what is and is not allowed in a de facto sense.

There are two ways to gain an edge in a prediction market. One is to just be exceptionally good at condensing the publicly available information into probabilities. The other way is to have insider information.

Nobody is worried about the former. Iran can certainly hire foreign superforecasters to predict all kinds of things, which should work just as well as a prediction market without insider info. This is certainly useful, and presumably every military is doing something like this, but at the end of the day you will only get quantified uncertainty, just like a prediction market for a poker hand might contain a broad range of possibilities.

With insider trading, you get something like a poker market which settles at 90% full house because some of the bettors have seen the hand.

Of course, with this administration, it feels like the primary purpose of Polymarket is to get paid for leaking classified intel. Of course, there are different levels of despicableness. Betting on Trump announcing tariffs an hour before he announces them is bad, but the demonstrable harm is limited. Leaking military secrets regarding ongoing operations tends to be the thing which gets you executed.

From a purely amoral point of view, I would not risk it. A gain of a few tens of thousand dollars seems insufficient compensation against any unknown risks, and if someone close to you makes even more than that, the deed becomes blatantly obvious. Not only would the USG have every incentive to block the payout, even if they could not convince a jury of your guilt, you would still destroy your career and get on the shit list of the USG.

Still, pushing for a ban of that market is basically admitting: "people who have classified intel have the incentive to leak, and we can not fix that."

Given that the US lost a 115M$ Hercules in the rescue, the obvious way to handle this would have been for the CIA to just take over the market. Spending a million on making bets which seem well-informed but are wrong to feed wrong intel to the enemy would probably be worth it.

There are two ways to gain an edge in a prediction market. One is to just be exceptionally good at condensing the publicly available information into probabilities. The other way is to have insider information.

There's an implied third way of actively swaying the outcomes being bet upon. In sports, this is uniformly against the rules (see federal charges against MLB players recently), but it's less clear how the rules work for other prediction markets: there's lots of discussion about whether "predicting" deaths is functionally an assassination market, but I'm not sure where I'd want the boundaries to be in the general case. Futures markets look a lot like (some) prediction markets, but it's downright encouraged to look at long-term oil futures pricing to decide whether to invest in new drilling and exploration, and it's not "unfair" that futures market members raise production elsewhere and at least temper the futures pricing impact of Gulf shipping woes.

A bet on sunshine next week and the electric grid spot price are pretty related, but the ethics of engaging in (legal) cloud seeding to change it isn't a clear "wrong", IMHO.

I suspect that, “do not jeopardize American combat operations,” is a much better fit for what is and is not allowed in a de facto sense.

Uh, no, I think the obvious fit is "do not do shit that will get the people who decide if your operations become illegal hate enough to nuke you from orbit". This prediction market can almost certainly not impact American combat operations.

Related to that, there's a rule "don't be autistic. Understand what normies hate and why." If you can't do that, you have no business running any sort of a market in the first place. It doesn't matter how much you say "betting against something doesn't mean you oppose it", only a couple of weird guys either think or behave that way.

And not only will normies think that people who bet against the US military don't like the US, that will actually be true because not only are the rulemakers and public normies, the bettors are normies too. The number of bettors who are just disinterested rationalists trying to help the world by increasing information flow will be dwarfed by the number who are enemies who specifically wish to profit from the country's misfortune.

(And if you ask "what's wrong with letting enemies profit from our misfortune, they didn't cause it after all", you a) are a quokka and b) definitely need to talk to some normies.)

There's also the secondary question of keeping operations secret. The whole reason prediction markets like this are supposed to work is that people with accurate information can make money from them, and this is reflected in the market. This is equivalent to "prediction markets leak insider information to the public through the market". Leaking insider information about US military operations to anyone is a bad thing.

And not only will normies think that people who bet against the US military don't like the US, that will actually be true because not only are the rulemakers and public normies

In the context of the existing, adjacent sports betting market, I suspect most betters are fans of a team betting on their guys, not crunching spreadsheets of game stats. And it's probably a continuum: there are a few die-hard Jaguars fans convinced that this will be their season (with apologies to Jason Mendoza). So I'm not sure the connotation is unfair.

The number of bettors who are just disinterested rationalists trying to help the world by increasing information flow will be dwarfed by the number who are enemies who specifically wish to profit from the country's misfortune.

Is that so? Do you suppose that many Iranians (or Chinese) who have the statistical illiteracy of your 'normie' Americans (who apparently can't grok the difference between that what is and that what you want to be) have accounts on Polymarket and gleefully bet against the US military?

Among the statistically literate, there is also the option to bet on things which will be bad for you to mitigate them. For example, a Greenlander might bet on the US invading not because they want the US to invade, but because they anticipate that they will require funds to relocate if Trump invades, similar to how Catastrophe bonds (which sadly are not available for US adventurism) works for their sponsor.

Also, I will come out and say that I would have preferred the outcome where the crewman was taken PoW by Iran not because I am an Ayatollah fanboy (I am not), but purely from a utilitarian perspective, because it would raise the probability of a negotiated peace as opposed to Trump deciding to just bomb the shit out of Iran, which seems unlikely to get the regime to budge but will certainly kill a lot of Iranians. If that makes me your enemy, then your world must be full of them. FWIW, I did not bet on it though.

--

More generally, your rule "don't be autistic. Understand what normies hate and why." is a fully general counterargument for anything from the enlightenment to LW.

A lot of raising of the sanity waterline pissed off normies. The Copernican model. Evolution. HBD. Abolitionism. Suffragettes. Human rights. Pacifism. (I will grant you that there are plenty of horrible things which also piss of normies. We can't conclude anything about the morality of baby murder or Nazism purely from the fact that it pisses normies off.)

It does not help that your straw normie in your post displays all the sophistication of a sports fan betting on his favorite team. That is barely a step up from the small child who decides to close his eyes to make a scary situation go away, or the imbecile blaming his doctor for having cancer after a screening test.

If you run a society in a way which does not offend the 20% with the least cognitive capability, I think what you might get in the long run is something like Afghanistan. If people want to make a prediction market about things which normies find distasteful (and which might be genuinely distasteful, like when some serial killer will strike next), the liberal answer is to tell them that unfortunately, they are living in a free society where there are limits to imposing their sentiments on speech acts.

Also, speaking of things which normies hate, I recon about 30% of the country would think you a terrible person for describing a voluntary behavior as 'autistic'.

Do you suppose that many Iranians (or Chinese) who have the statistical illiteracy of your 'normie' Americans (who apparently can't grok the difference between that what is and that what you want to be) have accounts on Polymarket and gleefully bet against the US military?

If they were allowed to do so, I don't see why not. Of course that would get Polymarket shut down. I would guess that it currently is mostly insiders and anti-US Westerners. There might be front groups or pro-Iranian NGOs betting, but I'd expect that to eventually get Polymarket shut down too.

There was a run on put options on airlines in the stock market just before 9/11.

Among the statistically literate, there is also the option to bet on things which will be bad for you to mitigate them.

Normies don't do that. You get a couple of weird people betting based on statistics, and everyone else betting based on who they like or hate. (Plus insiders, if applicable.) The way gambling has worked in practice does not show statistical literacy among the vast majority of people who bet. (And it isn't just the 20% with the lowest cognitive capacity, either.) The only cases where most people who bet on something bet based on statistics (without being insiders) are those which have huge barriers to entry that prevent everyone else from betting.

I recon about 30% of the country would think you a terrible person for describing a voluntary behavior as 'autistic'.

I reckon you think that normie tolerance for autistic behavior is a lot higher than it really is. They may be offended by the word, but they hold autistically based opinions in contempt.

Profiting from the country's misfortune does not make you an enemy, you are just earning money. It is not a hostile action in itself.

But given the way normies behave, you'll get a couple of weird rationalists doing it and everyone else who does will be enemies or insiders.

The kayfabe behind Prediction Markets is that they're somehow allowing 'superforecasters' to battle into creating stronger opinions through the use of pure logic and whatnot. Actual out-and-out insider trading isn't something that's encouraged or especially healthy for the marketplace..

i think robin hanson pushed the idea that insiders trading in prediction markets was a feature

People thinking about what they'd think prediction markets should be == functional actual product

It is, the point is to make better predictions, not to create a fair competition ground.

"do not do shit that will get the people who decide if your operations become illegal hate enough to nuke you from orbit".

Agreed. Prediction markets are trying to go mainstream and be respectable (even if right now they seem to be going for sports betting as the way to get the general public to use them) so pissing off the government is not going to help them. "Oh, you want a licence do you? Well remind me why we should do you any favours?"

this is such bullshit. Kalshi did the same thing about Khomeini's death. Because he died instead of vacating, the trades were voided even though his death had the same outcome. Markets "work" because there are rules that everyone agrees on ahead of time. When these rules are changed arbitrarily when money is at stake then people lose confidence in markets. Also, there is not even anything disrespectful about this. A betting market does not imply people do not want him to be found. It's possible to be pessimistic about an outcome in the short-term, while still hoping for an ultimately positive outcome. They may as well just put a huge disclaimer on their site "we reserve the right to void any market for any reason we deem fit"

This is the arbitrary moral posturing that makes people hate and distrust "big tech "companies. But this is where money is at stake. These prediction a markets are huge, with billions in funding. They can afford to take a stand. Caving to moralistic pressure will mean users losing trust in them.

Kalshi did the same thing about Khomeini's death. Because he died instead of vacating, the trades were voided even though his death had the same outcome.

This is something I have wondered about. Did Kalshi advise people that death doesn't count? If so, was it done in a reasonably prominent way or was it buried in the fine print, so to speak? As long as people were notified in a reasonably prominent way that they would not win the bet if the guy left office as a result of dying, this seems fine to me. Otherwise, yeah,

Khomeini one was more absurd IMO since it also raised a bunch of edgecases (like what if he's say injured badly by drone strike and doesn't die but relinquishes the position) and even puts into doubt stuff like if I'm betting into a market and somebody randomly gets taken by a traffic accident or heart attack.

Agreed, this is absolute total bullshit, both the Khamenei market and this pilot rescue market. If you want to take a policy decision that no markets are allowed on people dying (which I'd agree is a sensible policy) then you do it by refusing such markets permission to be set up in the first place, not retroactively voiding them. This breaks people's chains of trades where they attempt to squeeze out edge from multiple correlated contracts and also leads to higher spreads and more inefficient markets because now both buyers and sellers have to price in the risk that the market will get voided when quoting prices.

I can understand why people dislike markets on people's deaths (theoretically it can be used to pay for contract killings in a totally decentralized way) and why we might not want to allow them, but what's the reason to remove the market on the missing pilot?

If you want to take a policy decision that no markets are allowed on people dying (which I'd agree is a sensible policy) then you do it by refusing such markets permission to be set up in the first place,

I think it's reasonable to have a death exception, but it should be extremely clear. I just checked the "Donald Trump out as president" market on Kalshi, and it actually has a disclaimer on this point:

If Donald Trump leaves solely because they have died, the associated market will resolve and the Exchange will determine the payouts to the holders of long and short positions based upon the last traded price (prior to the death)

Presumably the pronoun is screwed up because Kalshi added this provision hastily after the Khamenei fiasco.

Anyway, the thing about the Khamenei situation was that given his age (85) and position (supreme leader of Iran or whatever) the most obvious way he was going to leave office was by dying. So if Kalshi didn't include a prominent disclaimer about death, that's lousy of them and they should be on the hook to pay out all the contracts in full.

It's sort of like those life insurance policies you used to be able to buy at airports. If they don't cover death due to plane crashes, you really should make it very clear to your customers.

Reality giving them a lesson. If they want to go mainstream and grow and involve real money, then they need to realise that they are not, in fact, going to be the mass market wisdom of crowds how to set policy and govern society due to truth seeking oracle they started off with ideals of being, they're just one more big bookies and people make bets to win money and not find the optimum source of agreement on how to steer the economy via real-world feedback from superforecasters.

Prediction markets are a casino in a top hat and a monocle, but with added opportunities for insider trading. Once they grew beyond an niche thing for eccentric techies, it was always going to turn out this way.

They may as well just put a huge disclaimer on their site "we reserve the right to void any market for any reason we deem fit"

This is literally every sports betting company. They can ban you if you win too much.

I actually think its such bullshit. If you want to provide bets and be a market maker, you should have to take the wins as well as the losses. Someone is beating your odds? Get better at providing odds or close up shop.

You're betting against other people though. The marketplace/exchange doesn't care how much you win.

Not polymarket sports betting

Draft kings sports betting

Having worked at betting exchanges before you kinda don't want people who win too heavily for ecosystem maintenance. Generally that's gonna impact result knowers most of all, whether inside information or latency

Someone is beating your odds? Get better at providing odds or close up shop.

Minimum requirement all gambling companies should be required to adhere to.

It's funny since they could but they'd have to dramatically pare back the menu. So majority of people who complain about limits are picking off relatively niche markets which are only offered due to being able to limit counterparties

The problem is that if they're limiting counterparties to losers, then it's inherently fraudulent - they're selling a service specifically, and only, to those for whom it's of negative utility, and thus are reliant on explicit or implicit deception to actually get business.

So yes, it is better that those betting options not exist than be run in that manner, much like how shell games are bad and shouldn't be allowed.

Ok, make them pare back the menu, they won't be making as much money then with their reduced offering which naturally gives them an incentive to get better at pricing their odds so they can access more markets. Accurate gambling odds provide benefits to third parties who can now use them to see what the probability of some future event is. It's the minimum societal good which we should expect from these companies in return fr the societal harm thry cause.

I agree the menu is bloated way beyond sanity by the arms race between the majors (though most of the liquidity still goes to the liquid markets funnily enough). Accurate gambling odds vis a vis the PM thing is a completely different thing since the big PMs are barely moving any money on their original political markets.

They may as well just put a huge disclaimer on their site "we reserve the right to void any market for any reason we deem fit

Isn't that basically what the insurance companies are doing now with Force Majeure? But yes, i agree that sites like Polymarket are at a pretty low level of respectability right now. Its like gambling in some underground mafia-owned casino.

I think people wrongly assume that because it uses crypto that it is more decentralized . this is not the case.

Force majeure is pretty rare and reserved for exceptional circumstances, not that they don't want to pay on a policy. If that's the case, they'll usually find another reason not to pay.

Unilateral declarations of Force Majeure (or Frustration, depending on exactly which class of rules governing the insurance contract you're talking about) can usually be challenged by the other party under arbitration or via litigation where the declaring party risks being under a very serious breach of contract if the case goes against them, hence insurers and others have strong reasons to not declare Force Majeure unless something really serious has happened to the point where they're reasonably convinced that an independent arbitration body would agree there actually was a Force Majeure. None of that exists for these prediction markets.

It's an American company with American founder, American customers, and American employees being paid in American dollars. The principle is to live in the greatest comfort and not be bothered by others.

Americans, am I right...

  • -15

This is becoming tiresome, and you're very close to a permaban already.

I'm loathe to ban you for such a petty, low-effort comment that from anyone else would just be an eyeroll, but you have exhausted all slack and charity. Yes, I know, you were joking. (But not really.) You do not have the leeway to throw jibes like this.

You are duly warned. Next time, I will ban you. Yes, even for something as minor as this.

So if the stated rules are fake, then what is the real rule?

  1. make money

  2. don't lose money

Polymarket exists in a legal grey zone, so they can't take pressure from Congress, because Congress could end their operation. If their operation ends, it's hard to follow rules 1 and 2.

In other words, the real rule is to follow the whims of Congress and the American political apparatus.

No, the real rule is more along the lines of what @Jiro said above "Understand what normies hate and why."

Attracting the ire of the government is down-stream of understanding (or failing to understand) what people are likely to object to and why.

If they set themselves up as legal gambling companies, they wouldn't have as much of a problem. But they don't want to deal with the regulation, which includes being banned in a lot of states, including some big ones, so it's worth it for them in the short term to insist that they're in some vague category that can't be regulated and do the minimum to appease the people who have the power to sic attorneys general on them. If they can stay out of the headlines it's better for business.

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