Nadex sought permission from the Commodities Futures Trading Commission to run a regulated betting market on the presidential election. The CFTC refused, stating that such an arrangement would be “contrary to the public interest.”
Robin Hanson points out that the CFTC position is more contrary to the public interest than any such betting market could ever be:
They still allow election betting at the Iowa Electronic Markets, where stakes are limited to $500. They still let people work for campaigns and administrations, which gives them financial incentives to vote for certain candidates. And they let candidates take positions favoring some industries, occupations, and locations, over others, which gives people financial incentives to vote for and against candidates.
We also let people tell other people which candidates they favor, which gives people non-financial incentives to vote for those candidates later. And since every bet for a candidate is matched with a bet against that candidate, whenever a betting market gives anyone a financial incentive to vote for a candidate, it at the same time gives someone else a financial incentive to vote against that candidate. Why are all the rest of these “due” influences, while bets are “undue” influences?
Read the rest. Yet another instance in which the sentence “I’m from the government and I’m here to help” is proven to be the most dangerous in the English language.