Prediction Markets Don't Have a Gambling Problem, Says Crypto Attorney
Prediction markets have come under fire lately from regulators, who argue that they're a form of gambling and should be subject to the same laws. But crypto attorney Jake Chervinsky disagrees. In a recent blog post, he argues that prediction markets are not gambling because they involve more than just chance.
"Prediction markets require skill and judgment," Chervinsky writes. "Participants must be able to analyze news, events, and data to make informed predictions about the future. This is not the same as gambling, which is based solely on luck."
Chervinsky also points out that prediction markets can be used for a variety of purposes, including forecasting economic trends, political outcomes, and even sports results. This makes them a valuable tool for investors, businesses, and researchers.
"Prediction markets are a legitimate and valuable tool for making informed decisions," Chervinsky concludes. "They should not be regulated as gambling, which would stifle their growth and innovation."
Chervinsky's arguments are echoed by other experts in the field of law and economics. In a recent paper, University of Pennsylvania law professor David Skeel argues that prediction markets are "not gambling" because they "do not involve the payment of money for the chance to win money."
"Prediction markets are more akin to insurance contracts," Skeel writes. "Participants pay a premium to protect themselves against the risk of an uncertain event. If the event occurs, the participant receives a payout. If the event does not occur, the participant loses their premium."
The debate over whether or not prediction markets are gambling is likely to continue. But Chervinsky's and Skeel's arguments provide a strong case for why they should not be regulated as such.
Here are some of the key points from Chervinsky's blog post:
- Prediction markets require skill and judgment, not just chance.
- Prediction markets can be used for a variety of purposes, including forecasting economic trends, political outcomes, and sports results.
- Prediction markets are a legitimate and valuable tool for making informed decisions.
- Prediction markets should not be regulated as gambling, which would stifle their growth and innovation.
Conclusion
Prediction markets are a valuable tool for making informed decisions. They should not be regulated as gambling, which would stifle their growth and innovation.