A few years ago I did a Facebook purge and the survivors were family, close friends and an abundance political news feeds and pundits. I did this so I would have one place to gather my news for the day and have a system to help me remember birthdays. As a result of this purge, the algorithm team over at Facebook has inundated my feed with political ads. One Ad – PredictIt- has been much more visible than the others.
What is PredictIt? I’ll let them explain:
PredictIt is an exciting new, real-money site that tests your knowledge of political and financial events by letting you make and trade predictions. A project of Victoria University of Wellington, PredictIt is set up to research the potential value of prediction markets in understanding the future. Our job is to study the wisdom of the crowd, yours is to make your most educated prediction.
My first thought – election gambling is against the law. Due to federal law, it is illegal to bet on elections local and federal. My second thought – isn’t this some form of insider trading? The politicos on the Hill have to have an unfair advantage. My third thought – I’m really starting to sound like the 30 year-old that I will be turning next month (don’t worry Facebook will remind you). So, I did my research.
It turns out that PredictIt is legal, even for Americans to use. The online political stock market could easily be confused as online gambling, but it is simply a non-profit running a futures market for politics and that’s good enough for the Commodity Futures Trading Commission (CFTC). The key word being “non-profit”. The CFTC has sued offshore for-profit futures markets in the past, but PredictIt was able to work around federal laws as a non-profit associated with Victoria University New Zealand.
Personally, predicting political futures against staffers in the Whip’s office does not intrigue me because I will probably lose money. However, the potential data and research does intrigue me. Low voter turnout (for many reasons) is becoming increasingly apparent in non-presidential years. However, could that change when a voter’s cash is involved? Is a voter more likely to get to the polls when they have a tangible investment in the game beyond their typical contribution? I don’t know the answer. However, if political scientists out there (much smarter than me) work to find the answer, the data they would produce could be a campaign-strategy game changer.
Have an election or policy futures prediction? Let me know on twitter @JTBaumgar