Nick Devor retweetledi
He confirmed the agency does plan to use extraterritorial jurisdiction to go after more insider trading on offshore platforms (like defi Polymarket, which is where most of the suspicious action appears to be).
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Nick Devor
2.3K posts
Nick Devor
@nickdevor_
gambling & prediction markets reporter @barronsonline | northeast location director @IAPE1096 | Signal: nickdevor.55
New York, NY Katılım Eylül 2015
731 Takip Edilen1.3K Takipçiler
Last year I wrote about VC funds simultaneously invested in gambling and gambling treatment.
A General Catalyst partner told me that “as gambling becomes more accessible—both legally and digitally—we expect demand for treatment to rise in parallel.”
General Catalyst@generalcatalyst
Meet GC
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Fascinating (but narrow) review of gambling policy research finds that legalizing gambling "has limited impact on reducing participation in illegal gambling," and responsible gambling measures "have limited or no impact on behavior."
link.springer.com/article/10.100…
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NEW: An upcoming prediction market conference, Predict 2026, to be held at the Aria on the Las Vegas Strip was called off by the casino due to concerns that its gambling license could be jeopardized for hosting the conference, according to a legal notice reviewed by Barron’s.
“The [Aria] is issuing this notice in light of Nevada’s current regulatory and enforcement position regarding prediction markets,” a lawyer for the Aria wrote in a letter terminating the contract between the hotel and conference organizers.
While Predict 2026 isn’t yet sponsored by a prediction market platform, the notice from the Aria’s lawyer shows how licensed casinos are seeking to avoid scrutiny from state regulators. “Recently, the Board has even expressed concern about advertising of prediction markets at non-gaming venues owned by affiliates of the hotel,” the notice said.
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SCOOP: 72% of Polymarket UMA votes have conflicts of interest.
The yes-or-no questions posed by Polymarket don’t always have clear answers, but Polymarket has a process in place for disputed resolutions; in many cases, the prediction market has nothing to do with the result.
Instead, an anonymous vote takes place outside of the firm’s platform. To participate, voters buy a cryptocurrency called UMA, which is currently valued at 51 cents a token. They debate how the market should resolve in a dedicated server on Discord.
I reviewed a random sample of 50 Polymarket predictions resolved by UMA vote over a recent four-month period; 36 of them included UMA voters that had active bets on the markets they were voting to resolve. In every case, their UMA vote aligned with their prediction-market bet, according to an analysis of public blockchain data.
For example, on the market "Will Trump talk to Xi Jinping in March?", two UMA voters had positions on Polymarket that would pay out if that market resolved to “No.” Both voted for the market to resolve to “No.”
UMA founder Hart Lambur said in an email that the potential conflicts I identified weren’t large enough to matter: “These votes didn’t shift the overall vote outcome at all and were meaningless to the final resolution.”
Markets with contentious resolution debates often see their odds whipsaw as UMA voters decide how to vote.
On the evening of March 29, the Polymarket odds of a Trump-Xi conversation began to climb, topping out at a 96.5% chance that, yes, the two leaders had spoken. There was no fresh news of a conversation that moved the market. Instead, the market seemed to move because a UMA voter controlling roughly 10% of the vote announced a “Yes” vote on Discord.
The odds fell back down to 0% once Polymarket issued a clarification that “There is not a consensus of credible reporting that Trump has spoken to Xi in March,” despite Trump telling reporters he had.
“UMA’s dispute resolution process is secured through economic incentives,” Polymarket said in a statement. “Voters must stake UMA tokens to participate, and incorrect votes are penalized through slashing, creating strong financial disincentives to vote against a verifiable outcome regardless of any external position a participant may hold.”
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EXCLUSIVE: Kalshi has hired a former regulator as its new chief compliance officer.
Sudhir Jain worked at the National Futures Association before consulting for Kalshi when he was at Patomak Global Partners, the risk-management consultancy founded by SEC Chair Paul Atkins.
Key quotes and insights from our interview:
- Jain is clear-eyed about the challenges around insider trading:
“Could there be a time when there would be no insider trading at all in our markets? I don’t think that would be the case," Jain says. "Look at securities markets—the SEC still brings a lot of [insider trading] cases, and those markets have been there for decades and decades and decades. Will we catch them faster, better? For sure. That’s the goal.”
- His says his relationship with Paul Atkins won't impact Kalshi’s relationship with regulators.
“If Kalshi were to ever need anything from the SEC, I think their standards would be the same.”
Also, “Paul is not great with texts."
- At Patomak, many of Jain’s clients were young founders who he says would rib him for coming to meetings in a necktie, even on weekends. Those clients included @mansourtarek_ and @luanalopeslara
“It’s hard to look at my closet and figure out what to wear every single morning,” he says. “It would be so much easier to just pick my navy suit with some tie.”
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@NotYetBankrupt "Currently, and this is likely to change, there is not much hedging going on."
Why/how is that likely to change?
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On the prediction market insider trading debate, I was talking with a couple of new finance friends yesterday. One was for, and one was against. We had a good talk about why, intuitively, it seems like insider trading is good for truth seeking but it's actually bad.
Prediction markets have two primary utilities. One is accurate pricing of future events, and the other is hedging. These markets only work if there are smart people incentivized to trade on them and make them efficient.
Currently, and this is likely to change, there is not much hedging going on. So the main incentive for people to address inefficiencies is having counterparties that price things poorly and making money off of that bad pricing.
In order for sharp forecasters to trade on these markets, they have to be confident that:
1. The trading platform is secure
2. Rules are fair and understandable
3. Their counterparties don't have an insurmountable information edge
1. and 2. are mostly there, but there are still some hiccups. With 3, however, if traders think their counterparties are insiders, then they don't want to trade against them. Who can beat an insider? No one! So they don't trade in those markets. If insider trading is allowed in all markets, and it's unknown which are insidered or not, then the risk profile for traders increases, and some really sharp people may not trade any markets! (Except for markets that are insider-proof, of course.)
So now the insiders are the only ones setting prices Which is ?maybe? theoretically fine if there is an insider for all 20,000 markets constantly updating prices, but that's not currently the case and unlikely to ever be the case. The model in which prices are set by a combination of insiders+sharp forecasters is tenuous at best. And now with only insiders setting odds the pricing data is useless because it's illiquid and you don't know if the insider is manipulating it or not!
Obviously, if you're a hedger, you don't want to hedge against a manipulated price because it wouldn't be fair or reflective of real probability. So actual optimal price setting and fulfilling the promise of these markets only comes when all participants are confident there are no insiders, which in my opinion means consistently banning insider trading.
Star Spangled Gamblers@SSGamblers
"In the context of prediction markets, there's a live debate on whether or not insider trading is even good or bad. The reason, basically, is because the value of these markets is the idea that they can create accurate odds for everyone to see. Of course, if there are people who are participating in the markets who have good information that they can trade on, that is actually going to create more accurate pricing in the markets. That can be very valuable if people want to know the real odds of, let's say, an election." — @pjchougule
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SCOOP: JPMorgan Chase employees are allowed to trade prediction markets, even when the bank itself is the subject of the market.
New employee guidance, circulated to staff this spring, emphasizes that “you must be cautious” when using prediction markets and warns against insider trading. It doesn’t require employees to pre-clear prediction market trading activity with the firm.
$JPM has advised employees to “limit your participation in prediction markets involving JPMorgan Chase” as “others could perceive this as a misuse of information,” according to a copy of the guidance @ungarino and I viewed.
“Think carefully before participating in markets related to the financial sector,” JPMorgan’s guidance says, listing examples such as stock prices, earnings, regulatory filings, leadership changes, interest rates, foreign-exchange rates, economic policy, mergers and acquisitions, and product launches. It adds that employees should never use confidential or material, nonpublic information to transact.
Bank watchdogs in the U.S. such as the Federal Reserve and the Office of the Comptroller of the Currency don’t currently mandate banks to monitor prediction markets. A JPMorgan spokesman declined to comment on how the bank plans to enforce its guidance or what it means to limit participation in markets where JPMorgan is involved.
The guidance from JPMorgan, the largest U.S. bank, is notable given how little is publicly known about companies’ prediction-market policies. Last week, the credit-ratings firm KBRA said in a press release that it would issue a blanket ban on prediction market trading for employees. “KBRA determined that a companywide prohibition is the only appropriate course consistent with its responsibilities to the market,” the company said.
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NEW: When you make a parlay bet on a prediction market, FanDuel might be your counterparty.
Flutter, the parent-company of FanDuel, announced in its Q1 earnings report today that "in April, we began trialing market-making services on a major, third-party prediction market platform.”
FanDuel has its own prediction market platform, FanDuel Predicts, which $FLUT CEO Peter Jackson tells me is mainly for onboarding new bettors in states yet to legalize traditional sports betting.
“I want to do both,” Jackson says. “I want to make money through market-making and I want to acquire customers.”
The prediction market market-making Flutter is doing is mainly in prediction market parlay or "combo" bets, Jackson says.
Prediction markets say they differ from sports betting operators because they aren't the house. But now they may be pitting you against the house of Flutter.
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Nick Devor retweetledi
We looked into Polymarket's presence in Panama, obtained its government paperwork and visited its headquarters in Panama City.
There was no sign of Polymarket. Nobody had heard of Polymarket there.
After more digging, we found that more than a dozen other crypto companies were not just incorporated there but also claim the address as their HQ.
Turns out, SBF even did business with the the office listed as Polymarket's HQ, which is a law firm that ignored all of our requests for comment.
npr.org/2026/05/05/nx-…
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"Bonk Inc." says in a new SEC filing that it's planning a major push prediction markets. Sure.
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Nick Devor retweetledi
