In a live appearance on Bloomberg TV, James Christopher Giancarlo, former chairman of the US Commodity Futures Trading Commission which regulates digital commodity and digital asset trading, insisted that America’s growing addiction to prediction markets is a net benefit for society as a whole.
During the interview, Bloomberg anchor Tim Stenovec challenged the former watchdog around the “existential question” posed by prediction markets.
“I have people getting in touch with me on the Bloomberg terminal all the time who are like, ‘I do not want my kids exposed to this stuff,’ like the gamification of everything in society,” Stenovec said. “They don’t see that as a good thing.”
Giancarlo — who now has a cushy life advising the companies he used to regulate, including Polymarket — replied that “like it or not, people like to gamble.”
“Human nature is human nature,” Giancarlo said. “I think there’s a social benefit in prediction markets.”
For the former regulator, that benefit evidently comes from the fact that people are gambling billions of dollars on things like weather patterns and oil prices.
“People like certainty. Why, during a weather condition, is everybody listening to Bloomberg’s weather? Because they want some predictability of the weather,” Giancarlo enthused. “Heretofore there’s been no predictability in things that are actually more important than the weather — interest rates, gas prices, the outcome of elections — those are important things to a lot of people.”
Though Giancarlo said he’s in favor of strong federal regulations around betting markets, he said allowing them to proliferate provides useful data: the so-called “wisdom of the crowd.”
“If you can pull the wisdom of the crowds of tens of thousands or hundreds of thousands, it’s a lot better than your average poll which polls maybe 800 people,” he continued. “I think there’s a social benefit in this, whether you participate in them or not, you may like the data that comes out.”
Of course, Giancarlo’s effusive praise for the gamification of weather patterns deserves some scrutiny. For starters, as the sitting chair of Polymarket’s advisory board, the prediction market guru is about the farthest thing from a neutral messenger.
Nevermind the fact that the “wisdom of the crowd” phenomenon is hotly contested, with critics arguing prediction markets are actually driven by a tiny number of bettors, are heavily weighted toward high rollers, and incentivize insider trading and mass disinformation campaigns.
A recent case-in-point came during the recent presidential elections in Brazil, where far-right candidate Flávio Bolsonaro was overwhelmingly pegged as the favorite on Polymarket — confidence which held up until the moment Luiz Inácio Lula da Silva emerged as the victor.
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