Gambling the Future Into Existence

Polymarket, for the blissfully uninitiated, is what’s known as a “prediction market” — a place where people trade shares (i.e., make bets) on the probability of real-world events. And Substack is, like a growing number of media companies, looking to juice its bottom line by embracing gambling. Ahem, excuse me: live prediction markets.

You’ll find Polymarket data in the Wall Street Journal and Kalshi probabilities on CNN. “Journalism is better when it’s backed by live markets,” Polymarket tweeted, of the Substack partnership.

Many journalists have tried to parse this curious phrasing, which has that vacuous, plasticine sheen particular to AI slop. My parsing, if I’m being charitable, is that Polymarket thinks that media becomes more accurate or more representative when journalists incorporate prediction-market probabilities into their reporting on future events, much as they might cite expert opinion or historical precedent.

Prediction markets, whatever their flaws, are often pretty good at forecasting the future. So in a news story about the military buildup in the Middle East, for instance … maybe there’s some value in including not only troop movements and diplomatic statements, but also the fact that traders currently assign a 35% chance to the US bombing Iran by March 7.

Lots of critics have already pointed out the obvious flaws in this model: the risks of insider trading and market manipulation; the bad incentives for journalists. I’m personally most concerned with how this degrades the wider information environment.

Predictions aren’t made in a vacuum. Even in Polymarket’s platonic ideal — which is, I guess, a perfectly sincere and rational trader placing bets based on his best assessment of available information — that information is drawn from the news. Markets and media coexist in the same ecosystem.

So traders consume news reporting and analysis. They price probabilities (place bets) according to what they’ve read. Journalists then cite those probabilities as meaningful signals about what the future will bring next. Those citations shape public perception. Public perception influences trades. The trades influence reporting. Again and again and again and again.

I’m simplifying here, for the sake of argument, but I think anyone can see that this particular snake is eating its own tail. The discourse becomes reflexive and self-reinforcing; the narrative shrinks away from conventional signals of ground truth in order to reorient around the markets.

We actually have a recent corollary for this phenomenon in Twitter, which profoundly shaped the international news agenda throughout the 2010s. Prior to Elon Musk’s purchase of the platform, mainstream journalists not only habitually used Twitter for work, but relied on it to gauge coverage priorities and newsworthiness.

As a result, the topics trending on Twitter — within a narrow, extremely online user base — arguably got over-represented in mainstream coverage. And actors who understood Twitter dynamics could, and did, manipulate the media. “When political campaigns wanted to shift a story or to have something become a story, they would go to Twitter for that,” the media scholar Shannon McGregor said in 2022. “They’re trying to use Twitter … because they know that journalists rely on it for what is going to become the news.”

Polymarket is like Twitter, except worse — because money, obviously. And because the people who run Polymarket tweet vapid, blob-shaped boilerplate like “journalism is better when it’s backed by live markets” … whatever the hell that means.

But, hey — some percent of traders on Polymarket are probably willing to bet that it’s the future of media. And someone on Subsack is probably willing to post to that effect.

What a time to be alive, truly: You gamble the future into existence.

by Caitlin Dewey, Links I Would Gchat You.. |  Read more:

Image: uncredited