Dear Rabbi Simon,
I wanted to ask a halachic question. There currently exists a platform known as Polymarket, a prediction market where people trade stock on the outcomes of real-world events (from the direction of currency markets to political happenings), by buying and selling shares that represent different possible results. Prices in the market fluctuate like stock rather than like a traditional betting market – based on supply and demand, effectively reflecting the crowd’s estimated probability of each outcome, and traders profit if the event resolves in the direction of the shares they hold.
Here is my question: Does programming an automated bot, with a high predictive success rate, to trade on such a market, and then profiting from those trades, constitute a form of gambling that would render a person pasul l’eidus (ie, invalid as a witness according to halakhah?
Kobi
Dear Kobi,
Thank you for your intriguing question, which has prompted me to do a bit of research.
Polymarket occupies a grey area between gambling and investing (or perhaps more accurately, speculating), although it is probably closer to the former. Having said that, US regulatory oversight now gives it a bit more credibility as a legitimate financial market.
WRT the halakhic category of משחק בקוביא (ie, gambling), the status of פסול לעדות (invalid as a witness) is applicable only to one who derives his livelihood from gambling, and does not participate in/contribute to the economic life of the society. For this reason, recreational/occasional gamblers (albeit their habits may be worthy of criticism) would generally not lose their credibility as a witness as a result. (I am not reflecting here on the addictive component of habitual gambling, which is also a serious issue for consideration. However, that is beyond the remit of this Q&A.)
This is also true for one who owns (or invests in) a casino or online gambling site. Again, I am not necessarily endorsing this sector. But the פסול לעדות designation would not apply. These can be seen as recreational/entertainment/hospitality enterprises.
Bottom line, I am inclined to say that one who profits from sophisticated or savvy use of Polymarket would not be subject to the censure of פסול לעדות.
I would like to thank Dr. Yaakov Schmidt for helping me understand the workings of Polymarket.
Best wishes
Rabbi Rashi Simon