That sounds like a little bit of hopium to me. Its the US presidential election. There are enough people following it to provide the accuracy.
And there's money to be made. If those markets were manipulated, a bettor would be getting some very good odds to bet for Harris.
1. The total amount of money bet on those sites is something like $2B. That's nothing. It's not nearly enough liquidity to capture the wisdom of crowds.
2. Do you understand hedging? I doubt it, so I will explain. People sometimes buy securities to protect against unfavorable outcomes, regardless of their probability.
For instance, I've thought about trying to get into sports betting in order to bet against Carolina. Why? Because that way, if Carolina loses, I will be sad but at least I will make some money. And if I lose the bet because Carolina wins, that's fine. It would be like paying $100 to guarantee a Carolina victory. For most basketball games, that would be worth it for me.
Anyway, people are almost certainly using these betting sites to hedge. I would if it were legal in the US.
3. You are familiar with DJT,. yes? The stock markets have become incredibly irrational (game stop is another example). Their predictive power, especially for meme stocks, is considerably less than in years past. The betting markets have a total cap less than DJT. If you think DJT is priced correctly, then your position on the betting markets would be consistent. If, however, you admit that DJT is a vastly overvalued stock, then there's no reason to think prediction markets are any better.
4. One of the sites has an $850 position limit. While that discourages large bets from moving the market, it also dramatically caps the upside for anyone to profit from those Kamala odds. In other words, the position limit impedes price discovery by eliminating the mechanism by which price discovery can proceed. The whole reason that the stock market "works" as a predictor is that the pool of capital is unlimited. Someone who makes a big bet can make a bigger bet if the stock continues to trend away from that trader's predictions. That's not so for these markets.
5. Again, there is no substitute for understanding. If you don't know how any of this stuff works -- including the wisdom of crowds theory -- then you probably should sit this out. But you wouldn't be you if you let your ignorance get in the way of your posting.
