In the early hours of January 3, Donald Trump ordered a surprise attack on the Venezuelan capital of Caracas to kidnap the country’s leader. Nicolás Maduro. The lives of millions of Venezuelans have been thrown into uncertainty. Political leaders of the country and abroad rushed to respond. It seemed like something no one had seen. Unless one actually imagines.
Hours before the attack, someone – and we don’t know who – made a series of bets on a prediction market platform that Donald Trump would oust Maduro, making nearly $500,000 when it happened. These platforms allow their users to bet not only on who will win the Super Bowl but also on global events. These apps, heavily regulated under the Biden administration, have seen a huge boom in popularity since Trump took office.
The Atlantic Senior Editor, Sahil Desai, explains them Annie Kelly. “These sites are called prediction markets because they’re supposed to be similar to stock markets. The idea is that you bet money based on what you think will happen. And in that sense, prediction markets allow you to predict the future. But in effect, it’s just a fancy way of betting.”
He explained that a worrisome trend is media organizations partnering with prediction market platforms. “Let’s say you’re a donor to a major Senate candidate. You can put millions of dollars into the prediction market on whether your favorite candidate will win and turn the odds. You can really shape media coverage in a way that you can’t with traditional polling. And all of this is going to get worse as media outlets start to incorporate this into their coverage.”
But how do they work, why are they such big news in the US and why does Trump want to set up his own?
Archive sources: NBC, BBC, CBS, CNN, CNBC, Daily Mail, 60 Minutes
