Here's the opening of Geoff Mann's essay on prediction markets in the current London Review of Books:
In the days leading up to Donald Trump’s State of the Union address in February, the prediction market Kalshi set up a trade, a wager in all but name, on the Yes/No proposition that the disgraced Republican ex-congressman George Santos would attend.
The larger the number of people who bet 'Yes' (or, in the language the prediction markets prefer, bought ‘Yes’ contracts), the more the value of the bet would rise; if they bet ‘No’, it would fall.
Santos saw an opportunity. Privately, he bet 'Yes', then started posting on social media that he was ‘going to be there’ for the speech, speculating about what he might wear and so on.
As the money piled in, the price of 'Yes' rose. When he thought the time was right, Santos sold his ‘Yes’ contracts, bought 'No’s, and then didn’t show up to the speech.
This story, which I missed at the time, turned out to have an unhappy ending for Santos:
He made $17,500 on the trade, which he had to return after his actions came to light, in addition to paying a fine of the same amount and being banned from Kalshi for life.
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