But now there are some stirrings that US prediction markets never completely went away, and may be ready to rise again. Mary Brooks an Paul Rosenzweig tell the story in “Let’s Bet on the Next Big Policy Crisis—No, Really” (Lawfare blog, July 13, 2021). They point to some new academic experimentation beyond the long-running Iowa Electronic Markets:

More recently, Georgetown University built out its own crowd-forecasting platform—which is not strictly prediction market but rather a way of surveying and pooling expert opinions—specifically for geopolitical futures. Similarly, Metaculus offers a platform for a quasi-prediction market, in which the currency of exchange is prestige points, and anyone can submit a question for inclusion in the market.

They point out that use of internal corporate prediction markets has been rising, and indeed, the there is a market for those with top-secret clearance in the US intelligence community:

There is significant demand for internal corporate prediction markets and crowd-forecasting. Google, Ford, Yahoo, Hewlett-Packard, Eli Lilly and a number of other prominent corporations have operated or continue to operate a corporate market. Some of their questions may delve into geopolitics, but in most cases employees bet on subjects such as whether deadlines will be met, what products will take off and what earnings statements will be. …

For example, in 2010, the intelligence community started a prediction market for top-secret-cleared government employees on its classified networks. From 2011 to 2015, the Intelligence Advanced Research Projects Activity (IARPA)—the intelligence-minded sister of DARPA—ran the Aggregative Contingent Estimation (ACE). ACE was a project designed to “dramatically enhance the accuracy, precision, and timeliness of intelligence forecasts … [by means of] techniques that elicit, weight, and combine the judgments of many intelligence analysts.” Today, IARPA still runs the Hybrid Forecasting Competition, which “develop[s] and test[s] hybrid geopolitical forecasting systems.”

But perhaps most interesting, there is now a company called Kalshi, approved by US government regulators, which will allow trading on the outcome of events. Brooks and Rosenzeweig write:

Just this past week, a prediction market that operates as a true financial exchange opened its digital doors. Kalshi—a San Francisco-based startup currently operating in beta—is the first fully regulated (CFTC-approved) prediction market. Because Kalshi is regulated, more significant amounts of money can be wagered than in many other markets, enabling them to build out a new asset class of events futures. The implications for this are obvious: An asset class like this could serve as an alternative or a supplement to more traditional insurance, allowing companies and individuals to hedge against crop failures, cyberattacks or floods.

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