A new spectre looms over democracy: Prediction markets

They offer a troubling opportunity to manipulate public perceptions of the outcome of political events.

- Jemima Kelly

Any New Yorker wanting a steer on how things might have panned out in the city's recent mayoral election could have done so without so much as glancing at a newspaper, turning on the TV or scrolling through social media. All they had to do was to look

upwards - at one of several giant digital billboards that had suddenly popped up all over the city centre, featuring some pretty attention-grabbing numbers.

"94% MAMDANI 6% CUOMO", the billboards screamed, along with the phrase "OKAY Trade" and then a company name: Polymarket.

What was this? Was it some kind of an advert for the Democratic candidate (and eventual winner) Zohran Mamdani, or for a company called Polymarket? Did it reflect polling numbers, betting odds, or something else? Were they numbers to be trusted?

What these billboards in fact showed was the implied probability of a Mamdani win, based on the price that traders - some might call them gamblers, it's a blurred line - were paying for a binary option on one of the biggest prediction markets platforms, Polymarket.

According to the way in which these markets function, if Mr Mamdani won, a wager of 94 US cents (S$1.20) would pay out US$1; if he lost, nothing.