I do understand his argument, that more popular events like a presidential election attract more people for predicting the outcome. He argues, that because of the larger crowd, the prediction has a lot of “dumb money”. As far as I understand the term “dumb money” it means that many people with not much expertise bet on a certain outcome even though it isn’t so likely if you dig deeper into the topic. Hence the prediction isn’t as accurate as it could be.

So far so good. However, I assume that having a large (dumb) crowd betting in a big event can be helpful to estimate the broad perception of an event. So I wouldn’t say that prediction markets on presidential elections are dumb but rather an accurate description of what the people think is the likeliest outcome of an event. Whether the estimation by the crowd is more correct than estimations created by experts is hard to say I guess. But they do have value.

@PaintingPaul The mix of betters on popular markets is certainly more skewed to the crowd vs specialists. Some teams, athletes, or political candidates reliably attract far more bets than odds would suggest. But, I think the prices nevertheless need to be mostly anchored to the true odds even if they tilt away a bit more in these markets. When Nate Silver says presidential election is positive EV for sharp betters, he doesn't say how big is the edge. With Polymarket having over a billion dollars of volume and offering opportunities for sophisticated traders/groups, I'm leaning toward Not Dumb if I have to choose.