June 11 Kalshi released a riotous ad featuring notable Novel York Knicks fan Timothée Chalamet. It was a zeitgeist-capturing moment for prediction markets, akin to the 2022 Super Bowl, when seemingly every ad featured the celebrity’s shilling cryptocurrency.
However, when I showed participants Chalamet’s place at Obviousat the recent prediction markets festival, I was met mostly with blank stares. These conference attendees – a mix of scientists, startup founders, job seekers and market players – hadn’t even heard of it. They were too busy thinking about the bigger picture and the risks facing the markets.
Their confusion perfectly illustrated a battle I saw repeatedly this weekend: The way forecasting philosophers view markets (tools for the greater good) is very different from the way the immense majority of the world sees them (the way sports betting is done).
“We’ve all waited so long to get to the world we’re in today,” Dan Schwarz, co-founder and CEO of FutureSearch, an artificial intelligence research and forecasting startup, tells me. But the platforms face problems ranging from insider trading to sports contracts that Schwarz says fuel addiction. To offset these harms, “prediction markets would need to provide significantly more value than they currently do.”
As it turns out, forecasters fear that what has made prediction markets a global phenomenon may be their undoing.
This year’s Manifesto took place at Lighthaven, an idyllic community in Berkeley, California. The campus, which occupies about half a block, also serves as the epicenter of the rationalist movement, which prioritizes, among other things, protected development of artificial intelligence and effective altruism.
The atmosphere was very masculine, but still eclectic. Groups of twenty- and thirty-somethings huddled around laptops in the Tudor-style main building, and someone told me I looked like a guy who would chew gum. Talks about attention-grabbing markets, combined with sessions on the chances of artificial intelligence killing us all, and lessons on how to optimize your sex life. There was a furry meeting and joint viewing of the first game of the World Cup in the USA and the fifth game of the NBA Finals. (I couldn’t find anyone who donated money to either event, although several attendees told me they knew people who made money in the bank). On the Manifold play money platform, there were markets for the festival itself, such as whether someone would break a bone (still unresolved) and will Caroline Ellison appear (Yes).
Still, broader background conditions were significantly different from previous years. While Kalshi and Polymarket have sponsored this event in previous years, they ran out of steam this year. Both companies declined to comment on the change. Last year, Kalshi conducted a session on sports markets, which she had launched just six months earlier. This year, companies are facilitating billions of dollars in sports trading in a particularly favorable national political era.
Sports were also conspicuously absent from the session on strategies to capture markets around world events and politics. I met with David Bensoussan, the organizer of the session, who made $1.6 million on a platform under the boughs of one of Lighthaven’s trees.
“The truth-seeking mechanism that prediction markets can have in predicting situations and providing greater knowledge to society – what does this have to do with sports?” he asks, wrapped in a blanket to protect himself from the chill in the Bay Area shade.