Prediction markets? It’s sports betting.
Prediction markets? It’s not sports betting.
That seems to be exactly where we’re at as a nation. Of course, there are gradients to the above, and us gambling folk here in our little bubble can make solid arguments for and against.
Obviously.
But the general public? I don’t know. I don’t think they see much of a difference.
I wish there was someone — or better yet, a comedic duo — that could help us here. If only that was possible …
COSTELLO: I’m trying to understand this newfangled thing out there, somebody told me they’re called prediction markets? I don’t understand this.
ABBOTT: (confidently) Oh sure, that’s easy. You buy a contract based on whether something will happen. Or won’t happen. For instance, the Steelers are playing the Cowboys next Sunday, right?
COSTELLO: Right-o. Oh, I love those Steelers. What a great team. Terry Bradshaw and Mean Joe Greene! They were my favorites. I love their helmets.
ABBOTT: Great! So if you want, you can buy a contract on the Steelers winning on Sunday.
COSTELLO: I can bet on it, you mean.
ABBOTT: (immediately correcting him) No no no no no. You can trade on it.
COSTELLO: What do I trade?
ABBOTT: The contract.
COSTELLO: I don’t understand. With who do I trade this contract?
ABBOTT: With whom do you trade this contract.
COSTELLO: Now you’re the grammar police. OK, smart guy, with whom do I trade this contract?
ABBOTT: The market.
COSTELLO: (looks around) Who’s the market?
ABBOTT: Why, it’s the people buying and selling the contracts, of course!
COSTELLO: And what’s this contract about?
ABBOTT: Whether the Steelers will win on Sunday.
COSTELLO: (pause) That’s a bet. My daddy taught me about betting when I was a baby, and I know a bet when I see it, and if I think the Steelers are going to win, and if I put money down on that, that’s a bet.
ABBOTT: (patiently) No, that’s an event contract.
COSTELLO: What’s the event?
ABBOTT: The Steelers game.
COSTELLO: And if I think they’ll win?
ABBOTT: You buy “Yes.”
COSTELLO: Yes, what?
ABBOTT: (slightly louder) Yes, they’ll win.
COSTELLO: And if I buy yes, and if they win, I make money, right?
ABBOTT: Precisely!
COSTELLO: (points at Abbott, then loudly) That’s a bet!
ABBOTT: (exasperated) You’re not listening. It’s a prediction market.
COSTELLO: OK. What am I predicting?
ABBOTT: The result of the Steelers game.
COSTELLO: With money?
ABBOTT: (as though this should be obvious) Naturally.
COSTELLO: That’s sports betting.
ABBOTT: Sports betting is when you wager against a sportsbook.
COSTELLO: Who am I wagering against here?
ABBOTT: Another trader.
COSTELLO: (nodding slowly) So it’s sports betting against a stranger. Got it. Thanks. Have a good day.
ABBOTT: (shakes head) No. It’s not sports betting. Think of it this way: You’re taking a position.
COSTELLO: My position is the Steelers will win.
ABBOTT: Correct.
COSTELLO: And his position is they’ll lose.
ABBOTT: Correct.
COSTELLO: And whoever’s right gets the money.
ABBOTT: (pleased) Now you understand prediction markets!
COSTELLO: I understand betting.
ABBOTT: (rolls eyes) No, no. A sportsbook sets odds.
COSTELLO: Who sets the odds here?
ABBOTT: The market.
COSTELLO: The market?
ABBOTT: The buyers and sellers.
COSTELLO: The bettors?
ABBOTT: The traders.
COSTELLO: Who are betting on sports?
ABBOTT: No, they’re trading sports contracts.
COSTELLO: OK. Can I trade the point spread?
ABBOTT: Sure.
COSTELLO: The total?
ABBOTT: Of course.
COSTELLO: Player props?
ABBOTT: Absolutely.
COSTELLO: Parlays?
ABBOTT: They call them combinations.
COSTELLO: (long pause; squints and stares at him) But it’s not sports betting.
ABBOTT: (smiles proudly) Now you’ve got it!
COSTELLO: No, I’ve got a headache.
ABBOTT: (launching into an explanation) Here’s the difference: Sportsbooks are regulated by state gaming authorities.
COSTELLO: And prediction markets?
ABBOTT: They’re federally regulated.
COSTELLO: Who says?
ABBOTT: The prediction markets.
COSTELLO: (suspiciously) What do the states say?
ABBOTT: They say it’s sports betting.
COSTELLO: (throws his hands up) Finally, somebody understands this.
ABBOTT: But the prediction markets say the states don’t have jurisdiction.
COSTELLO: Over sports betting?
ABBOTT: Over event contracts.
COSTELLO: On sports.
ABBOTT: Yes.
COSTELLO: For money.
ABBOTT: Yes.
COSTELLO: Based on who wins.
ABBOTT: Yes.
COSTELLO: (leans in, speaking very slowly) And it’s not sports betting?
ABBOTT: (hesitates) Legally speaking, that’s the billion-dollar question.
COSTELLO: Can I buy “Yes” on it being sports betting?
ABBOTT: Absolutely.
COSTELLO: Where?
ABBOTT: On a prediction market.
COSTELLO: (turns to leave) I’m calling my bookie.
ABBOTT: Broker! You’re calling your broker!
COSTELLO: (without turning around) Whatever. I’ll just tell him to take the Steelers.
