The United States government stood at the verge of crisis. For more than three months, there had been no agreement in Congress within an appropriations bill to fund the government. The Democrats had taken a stance to safeguard 800,000 young men and women who had arrived in the United States since minors and been protected from former president Obama’s Deferred Action for Childhood Arrivals policy, which President Trump had rescinded, providing it an expiration date of March 2018. Trump had won the presidency on a campaign that blamed the nation’s problems on immigrants, promised to deport themand vowed to create a huge wall to keep them out. The issue divided the American public, which branch was now threatening to shut the government down.
With no bill to protect these immigrants, Democrats refused to approve the legislation. The funding of the government was set to end at midnight on Friday. As of Friday afternoon there was still no route from the Senate to break a filibuster. If they failed to achieve an agreement, the government would shut down. Hundreds of thousands of federal employees are furloughed. U.S. government operations around the world would grind to a halt, and remain that way indefinitely until the two sides can come to a compromise. The situation was tense, the stakes were high, and I, like most other Americans, was glued to my television set watching the»shutdown clock» Hurry down on CNN.
I was captivated as senators huddled together in tiny groups round the Senate chambers attempting to wheel and deal a compromise to break the filibuster. However, while the majority of America was expecting for a deal to be attained and also the crisis to be averted, I was biting my fingernails, hoping more senators would defect from the compromise, so there would be no arrangement to conserve the»Dreamers» from mass deportation, and that the authorities would shut down Friday night. I have always thought myself a politically engaged person, using fairly radical left-wing politics. On this night, however, my political values and hopes for the country had nothing to do with my interest. I was sweating a»no» vote since I had $500 riding a shutdown on PredictIt.
PredictIt is a real-money political prediction market based in D.C. and sponsored by Victoria University of Wellington, New Zealand. PredictIt operates as a sort of»stock market for politics,» and can be used to study the effectiveness and worth of markets in predicting future outcomes. The site was launched in 2014 long following the U.S. Commodities Futures Trading Commission shut down another prediction market, Intrade. Intrade has been popular, but approved bets on more than just political events, including the weather and the amount of gold, which the CFTC believed a commodity future. PredictIt, however, had the approval of the CFTC to function because the website’s job was for»academic research purposes only,» and because PredictIt had agreed to provide contracts on only political events and limit the amount that could be invested in a single contract to $850.
A PredictIt contract is fundamentally a bet. Each contract is a regular proposal bet between two people that an event will or won’t happen, only in this case the bet is structured like a futures contract. Dealers can buy»yes» or»no more» shares in any given question. For each»yes» contract, there is another dealer holding»no.» Dealers can provide their shares available on the marketplace at any price they wish. At the resolution of this event, the winners are each paid $1 per share. The losers’ stocks are worth nothing. Throughout trading, costs will fluctuate depending on demand. A number of researchers believe that this kind of market-based approach provides more reliable data than matters like opinion surveys or even expert opinions. PredictIt shares its data with professors at more than 50 universities, including Harvard and Yale.
This information collection and the institution with Victoria University is what allows PredictIt to operate in america. It’s the same exclusion that’s allowed the Iowa Electronic Markets, the O.G. of real-money political prediction markets, to function at the University of Iowa unmolested as 1988. Unlike the sports tips nevertheless, PredictIt is not entirely not-for-profit. Although it is owned and operated within an educational project by a nonprofit university, the founders of PredictIt, the brothers John and Dean Phillips, operate PredictIt’s applications through their for-profit firm Aristotle Inc.. Aristotle takes a 10 percent commission from winning stakes for their services.
Since 2014 PredictIt has seen enormous growth. On any given day the website offers countless markets, on queries from»Who is going to be the next justice to leave the Supreme Court?» To»Will there be a federal gas tax increase in 2018?» The most popular propositions, however, are often hotly contested elections, like the Alabama particular election held in December to fill the Senate vacancy created by Jeff Sessions’s appointment as attorney general. That race, between Roy Moore and Doug Jones, saw over 10 million shares traded between PredictIt users. In 2017, PredictIt users exchanged more than 300 million shares. That quantity was mostly the product of a spike in interest during the 2016 presidential election.
According to spokesman May Jennings, PredictIt’s customers are mostly young men between the ages of 22 and 35, primarily from large metropolitan regions. «People in politics and finance. A lot of people with heavy data backgrounds,» he says. «Of the dealers I have fulfilled, one was a neuroscientist, yet another was a college professor, yet another was a math teacher.» But one of the around 80,000 consumers on PredictIt live a small and dedicated tribe, a cabal, that have transformed political prognostication into more than just an art, but a lucrative business. «There is a group of users who keep the website available,» says Jennings. «They dwell on the website.»