Competitive Enterprise Institute argues critics have not shown prediction markets uniquely drive manipulation of real-world events, challenging a Roosevelt Institute claim that such markets erode trust and shape outcomes.
Three categories sit at the center of CEI’s rebuttal: market-price manipulation, settlement-source manipulation, and event manipulation — with only the third supporting the claim that markets change reality.
Examples cited by critics — involving a Ukraine war contract, weather-sensor data, and pressure on journalist Emanuel Fabian — targeted how contracts were resolved, CEI says, not the underlying events themselves.
CEI says the proper response is stronger contract design, more reliable benchmarks, and fraud enforcement, arguing settlement manipulation is a familiar financial-market problem rather than grounds for sweeping regulation.
The think tank frames the broader debate as a category error: exploiting a market’s rules is not the same as controlling the outside world those contracts attempt to forecast.