Interactive Brokers' Thomas Peterffy joins the prediction market debate

Summary

Thomas Peterffy, founder and chairman of Interactive Brokers, joins CNBC's Halftime Report to debate prediction markets with Josh Brown. Peterffy argues prediction markets are useful hedging and forecasting tools and will eventually be much larger than securities markets, while acknowledging early regulatory and manipulation issues. Josh Brown cautions that most prediction market bettors lose money because binary bets can go to zero, though he remains bullish on Interactive Brokers stock and sees prediction markets as useful election indicators.

• Thomas Peterffy defends prediction markets as serious tools for economic, climate, election, and long-term questions.
• Peterffy believes prediction markets will grow much larger than securities markets.
• He says CFTC requires manipulation surveillance and bans war/military questions, but expects regulation to improve.
• Josh Brown warns most prediction market participants lose money because bets are binary and can go to zero.
• Brown distinguishes betting from long-term investing but says he is bullish on Interactive Brokers stock.
• Brown likes prediction markets as election indicators because money at risk may reduce lying to polls.
• Peterffy notes long-dated prediction contracts pay interest at half a percent under Fed funds rates.
• The debate touches on public companies racing into prediction markets, including Coinbase, DraftKings, and Robinhood.