PREDICTION MARKETS
ban state-law gambling. While such a move might be legally plausible, it would provoke a significant legal battle and have some legitimate Major Question Doctrine concerns. But it is time to stop pearl-clutching when it comes to prediction markets. This new modality demonstrably produces high quality information, something state-law gambling has never claimed to do. At the same time, it short circuits a perverse incentive structure that suffuses traditional book- making. People respond to incentives, and this relative platform neutrality should prove a boon to consumer welfare.
it. But the pertinent question is not whether that harm is present, but whether it is more or less than the alternatives — and it is difficult to see how it could be more than the present regime. During the Obama years, Cass Sunstein was the Administration of the Office of Information and Regulatory Affairs (OIRA). As part of OIRA’s efforts, Sunstein implemented cost benefit analysis for all federal policy, dictating that agency action may only proceed where “the chosen approach maximizes net benefits.” 16 Years have passed, administrations come and gone, but the analytic frame still pertains. The age of state-licensed betting is over. The time of the prediction market has come.
AARON BROGAN Founder, Brogan Law For information contact: aaron@broganlaw.xyz
There will still be harm. There is no doubt about
16 Cass R. Sunstein, Cost–Benefit Analysis, 114 Colum. L. Rev. 167 (2014), https://columbialawreview.org/wp-con- tent/uploads/2016/04/Sunstein-Final.pdf.
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