Accurately predicting disaster is actually quite useful, and prediction markets reward people for operationalizing information others don’t yet have.
Prediction markets seem to be everywhere these days. Now you can bet not only on the outcomes of sporting events, but also elections, wars, and natural disasters. Yet many people react to these markets with disgust. For instance, in a recent https://jacobin.com/2025/12/prediction-markets-betting-commodification-vc in Jacobin, political commentator David Moscrop calls them “demented” and “grotesque.”
The main moral objection to prediction markets seems to be that it’s wrong to profit from someone’s misfortune. And intuitively there does seem to be something immoral about raking in thousands of dollars because you correctly predicted that a hurricane would hit a particular city or a particular war would break out, resulting in tremendous amounts of suffering. As Moscrop puts it, “Bettors will hold financial stakes in particular outcomes, including some of the most heinous events imaginable. It’s a fundamentally cynical and dehumanizing turn.” But as natural as the gut-level unease with prediction markets is, we shouldn’t trust it. Prediction markets are both useful and morally benign.
Prediction markets are useful precisely because they incentivize accurate forecasting. The prospect of making or losing money gives participants a strong reason to seek out new information and to process that information in an unbiased way. Think about sports betting. When you don’t have any money on the line, you probably indulge in wishful thinking that your favorite team is going to win this week, even though they’re 14 point underdogs. But if you suddenly stood to lose $1,000 if you turn out to be wrong, you’ll quickly start to think more rationally about the team’s chances.
https://thedailyeconomy.org/article/the-ethics-of-betting-on-future-bad-news/
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Scientists get paid for predicting natural disasters, too. No one seems to have a problem with that.
Couple of things in there that troubled me, especially the defense that a successful predictor can use proceeds to help victims of bad stuff:
Gambling is not positive-sum; the winners and losers put up more in advance, minus platform/house fee, and then the winner walk away with less than sum[winners+losers]... so in expectation, given that everyone wanted to alleviate bad shit happening, those suffering from e.g., hurricanes would be strictly better off if both winners and losers abstained from gambling and just donated to relief.
THe moral outrage at prediction market probably isn't just that, but also the commodification of previously non-commoditized objects (hashtag Beckert...).
Also, I can't stop thinking that while fun for me, it's kind of a useless thing. Life is better if nobody plays betting markets, no?
I suppose prediction market supporters would argue that even if the gambling is zero sum, the market itself has positive potential externalities. (The price in the market reflects accurate probabilities which even non-market-participants can utilize to make better decisions)
True, true... And maybe the market is just underdeveloped now but in the future people in e.g. Hurricane areas will check them the same as they check weather forecast (or weather forecast will take predictions into account etc etc)
I can see the morality pretzel you can find yourself in by making profit on evil outcomes but the fact is evil still happens. You can always be in the good side and bet with your conscience but that could leave you poor in the long run.
America spends almost $1T a year on death and destruction. The military industrial complex is built on profit not morality. The level of betting doesn’t come close to the racket war has become.
The issue rests mostly on scenarios where the individual making a bet for something negative is actively incentivized to encourage, promote or even kickstart the negative event. For example, a user may bet in favor of a riot breaking out at a certain event. That individual is now financially incentivized to see that riot happen and succeed.
The problem is that betting in a bad outcome incentivices you to exert your influence, even if extremely small, to make that pad thing happen.
If you are predicting a hurricane you have no inflence at all (I think), so no harm.
If you are predicting a war, you may have miniscule influence (which given enough people can grow to be non-insignificant. Also some people actually have more than miniscule influence in such events (and they can also bet on these markets).
Basically the problem is the similar the fixing matches in sports betting.
betting disaster can be used as hedging. its a good thing ⚡⚡