The News
Investors are betting on prediction markets. The markets allow users to gamble on whether future events will take place, paying out $1 per bet if correct: You might see “Joe Biden to win the US presidential election” at 25 cents, and if you think it’s more than 25% likely to happen, you’d buy it, which would drive the price up. Several small markets exist, but rising interest from financial institutions is spurring growth.
It’s a complicated issue because they are ambiguously legal in the US. US regulators are considering further restrictions, but one economics professor told the Financial Times that the markets are “potentially a really useful way” of predicting the future and that any regulations should use “as light a hand as possible.”
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