Category Archives: Betting

If I had to guess, I would say about 50 percent of the “name pros” you see on television on a regular basis have a negative net worth. Frightening, I know.

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No GravatarPhil Gordon on Poker

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Previous blog posts by Chris F. Masse:

  • No need of enterprise prediction markets to boost intra-corporation communication
  • Inkling Markets is included in the 2008 list of “Cool Vendors” by Gartner.
  • BetFair-TradeFair has won its second Queen’s Award for Enterprise in its eight-year history.
  • Inkling Markets is one of the “Hot Companies To Watch In 2008”, according to Forrester.
  • Plenty of great news coming from Inkling Markets in the coming weeks
  • ??? charity-driven prediction markets OR social issue prediction markets ???
  • That can’t be Nigel Eccles of HubDub.

Do BetFair understand the statistical concept of expectation?

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No GravatarGraham &#8220-Sharp&#8221- Minds:

[&#8230-] When I was interviewed by BetFair and they explained to me all of the problems with the multiples operation, most importantly the fact that it is a loss making despite the huge overrounds, I was asked for my opinion. I told them the simple solution was to take the bets on the chin like a traditional bookmaker and keep away from the markets as the bets they placed were likely to be taken by traders that are shrewder than their own, especially in-running where most of the BetFair trading activity actually occurs.

They were horrified at this prospect and were insistent on producing a formula to place the bets into the main BetFair market to reduce the risk as close as possible to zero. I was more horrified that they didn’t understand the statistical concept of expectation.

Discussion here, too.

Previous blog posts by Chris F. Masse:

  • 50% of our prediction market luminaries have a MacBook.
  • STRAIGHT FROM OUR TRUISM DEPARTMENT: Money buys happiness.
  • Ron Paul (R) and Barney Frank (D) ally together to attack “the practical hurdles of the federal law, known as the Unlawful Internet Gambling Enforcement Act, rather than its legitimacy”.
  • Clicking on the “SPHERE: RELATED CONTENT” button, at the bottom of each Midas Oracle post, will bring you a list of external webspots.
  • FRIGHTENING: Jed Christiansen’s prediction market blog was briefly overtaken by web spammers, who inserted invisible links to their commercial sites so as to game the Google PageRank system.
  • InTrade ditch market-leader Bloomberg for low-cost, second-tier data provider eSignal.
  • Drawing a parallel between our reluctance to seek advice and the experts’ reluctance to take the market-generated probabilistic predictions in an un-discriminating, un-critical fashion

Do BetFair spy on their customers trading accounts?

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No GravatarYou may have heard the rumor that BetFair do access customers&#8217- trading details and do use that intelligence.

From what I gather (the re-phrasing is mine):

  1. BetFair does never seed markets or take proprietary positions against its customers.
  2. At BetFair, taking advantage of customer information would be considered grounds for summary dismissal.

Previous blog posts by Chris F. Masse:

  • Do BetFair understand the “statistical concept of expectation”?
  • Towards an anti-drugs and anti-corruption body for all sports? — BetFair’s proposal…
  • TOTE Tasmania has entered into an agency agreement with Betfair Australia that will provide it with access to Betfair’s global customer base of more than one million punters.
  • Do InTrade allow financial scams to be published on their web forum?
  • The BetFair Starting Price is such a phenomenal success that their MSR-like system melted down under pressure last Saturday, April 5th, 2008, for the British equivalent of the Kentucky Derby —the Grand National at Liverpool.

The Best Piece Of News I Have Just Heard This Thursday Morning.

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No GravatarYouBet.com is in great financial trouble.

Fantastic. I am so happy I could lay an egg.

YouBet.com

Previous blog posts by Chris F. Masse:

  • REBUTTAL: SalesForce, StarBucks and Dell demonstrate that enterprise prediction markets as intra-corporation communication tools (as opposed to forecasting tools) are overhyped by the prediction market software vendors and a little clique of uncritical courtisans.
  • Comments are often more interesting than the post that ignited them.
  • Harvard fella says prediction markets are doomed.
  • How should prediction market firms (e.g., InTrade-TradeSports, BetFair-TradeFair) deal with Blogosphere’s criticism?
  • BetFair’s future bet-matching logic
  • If Midas Oracle were to meet, would we use Huddle, and why?
  • WORLD’S SUCH A SMALL PLACE: Smarkets meet HubDub.

Independent production company seeks deep throats to spill beans on online poker industry and BetFair Poker.

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No GravatarBetting Market:

I am a researcher employed by a leading award winning UK based independent production company, that specialises in factual programmes. We are currently researching the online poker industry, for a forthcoming documentary that will look at the broader issue of the regulation of the online gambling industry.

I am interested in hearing from people who were or are involved in any disputes with their online poker provider. I would be particularly interested to hear from persons involved in the recent incidents at Absolute Poker and Ultimatebet. And I am keen to track down anybody with inside information relating to the recent Betfair heist (not least the player who goes under the name &#8220-Chillindude&#8221-).

All information received will be treated in the strictest confidence and anonymity will be afforded to anybody that wishes to appear in the programme, but does not wish their identity to be known.

In the first instance, please contact me at the address below, so that we can arrange a meeting.

Email: pbenckendorf (at) web.de

Previous blog posts by Chris F. Masse:

  • REBUTTAL: SalesForce, StarBucks and Dell demonstrate that enterprise prediction markets as intra-corporation communication tools (as opposed to forecasting tools) are overhyped by the prediction market software vendors and a little clique of uncritical courtisans.
  • Comments are often more interesting than the post that ignited them.
  • Harvard fella says prediction markets are doomed.
  • How should prediction market firms (e.g., InTrade-TradeSports, BetFair-TradeFair) deal with Blogosphere’s criticism?
  • BetFair’s future bet-matching logic
  • If Midas Oracle were to meet, would we use Huddle, and why?
  • WORLD’S SUCH A SMALL PLACE: Smarkets meet HubDub.

Are you a better predictor than John McCain?

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No GravatarVia Bo Cowgill of Google, via Foreign Policy, John McCain:

John McCain

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They would do anything to sell politics, these days. :-D

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Foreign Policy:

It&#8217-s a clever marketing ploy by team McCain, but why stop there? Why not have the candidate take positions in predictions markets such as Intrade? Wouldn&#8217-t we rather know how prescient Senator McCain is about the odds of bird flu striking the United States by the end of September, the chances Pervez Musharraf will step down as Pakistan&#8217-s president anytime soon, or the likelihood of a peace treaty between Israel and the Palestinians by January 2009? Put your money where your mouth is, senator.

InTrade-TradeSports and BetFair-TradeFair should let traders opt to make public their positions, and they should create dynamic prediction registries and leagues.

Previous blog posts by Chris F. Masse:

  • Red Herring’s list of the top 100 North-American high-tech startups includes Inkling Markets —but not NewsFutures, Consensus Point, or Xpree.
  • Professor Koleman Strumpf explains the prediction markets to the countryland people.
  • Professor Koleman Strumpf tells CNN that a prediction market, by essence, can’t predict an upset.
  • Time magazine interview the 2 BetFair-Tradefair co-founders, and not a single time do they pronounce the magic words, “prediction markets”.
  • One Deep Throat told me that this VC firm might have been connected with the Irish prediction exchange, at inception.
  • BetFair Rapid = BetFair’s standalone, local, PC-based, order-entry software for prediction markets
  • Michael Moore tells the Democratic people to go Barack Obama in Pennsylvania (a two-tier state), but the polls and the prediction markets tell us that that won’t do the trick.

The Mathematics of Gambling

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Ed Thorp - one of the pioneers of scientific betting

Here’s an interesting book: The Mathematics of Gambling (free download), written by the legendary mathematician and hedge fund manager Ed Thorp. The book is about mathematical systems and optimal betting, and encompasses various games, such as blackjack, baccarat, roulette, the wheel of fortune, horse racing and backgammon.

[ cross-posted from Reasonable Deviations ]

0-100 prices… explained to the British traders.

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BinarySoft:

Why Binary Prices?

There are several advantages of using binary prices instead of decimal odds:

1. Binary prices are more intuitive than decimal odds.
Ask a person on the street what they think the chances are of a certain event happening: they aren’t likely to say “I think it is around a 1.4 shot” or “I reckon it’s around 2/5 on”- most people would say “I think it has around a 70% chance of happening”. With binary prices, you are trading the percentage chance of the event occurring.

2. Trading is easier with binary prices than decimal odds.
When trading with decimal odds, in order to achieve an equal profit or loss regardless of the outcome of the market, the stake size needs to be continually recalculated as the odds vary. With binary prices, trading in and out of markets is easy – to achieve an equal profit or loss across all outcomes, all you have to do is get your net position on the market to zero. This can be done in BinarySoft BDI by simply setting your stake to the current net position and then placing an order accordingly. By monitoring your net position you can trade in and out of markets faster and more easily than with decimal odds.

3. The stake size does not need to be continually adjusted.
Compare a bet of ?100 at decimal odds of 1.01 vs. a bet of ?100 at decimal 100.0 – a huge difference in the amount of money being risked. With decimal odds you have to continually adjust your stake as the odds vary in order to risk the same amount. The equivalent of these two bets in binary prices is ?1 per point at a price of 99.0 and ?100 per point at a price of 1.0.

4. Binary prices enable both selections of a binary market to be combined into a single concise view of the market.
When viewing a binary (two-selection) market in BinarySoft BDI, all of the bets across both selections are combined into a single ladder-style interface. It also means that you can place a bet on the outcome of the binary market without having to worry about which underlying selection you should choose in order to place your bet. This combination of both selections into one concise view of the market is only possible when using binary prices.

IG Indexs PureDeal

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The IG Index software is called PureDeal and have the capability to offer clients FSB, Binary Bets, Ladder Trading (same line InTrade), and many other products. The new CFD platform looks nearly identically.

This is from our good friend Fabian John (from Germany). Right-click on the image below, and you&#8217-ll see a Flash presentation of IG Index&#8217-s PureDeal.

IG Index’s PureDeal

Sounds like Sean Park will strike it rich, once again.

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Sean Park (Founding Partner at Sixth Paradigm, and blogger at The Park Paradigm)

Sean Park is a leading independent thinker on the future of financial markets, the author of The Park Paradigm, and the founding partner of Sixth Paradigm LLP:

The technology of the digital age is driving an unprecedented explosion in the ability to create markets in anything. Trade anything. Not just physical goods. Not just financial instruments. But ideas. Events. Outcomes. The emergence of these kinds of markets will – over time – impact how we view and interact with the world in all aspects of our personal and professional lives. They will fundamentally alter the current world economic and social paradigm.

Sean is also a founding investor in innovative companies such as Betfair and WeatherBill (where he is also a non-executive Director) and has extensive experience investing in and advising start-up and high growth companies in addition to over 16 years of experience working at a senior level in capital markets and investment banking. Building businesses has been a key theme throughout his career.

I&#8217-m bullish on WeatherBill. They showed that an event derivative exchange can have a more user-friendly interface &#8212-stuff that BetFair-TradeFair and TradeSports-InTrade have not computed yet. I wonder whether the WeatherBill approach could work out with other risks &#8212-other than weather.

On Sean Park, as a blogger, one of my sources said to me that he sometimes elaborates on ideas invented by others years ago and makes it like they are his. I&#8217-m a brand-new feed subscriber to his little blog, so I&#8217-ll judge by myself.

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Previously: Thoughts on Weather Bill – by Eric Zitzewitz – 2007-01-04

What I think is most innovative is the idea of marketing a prediction market contract as “insurance.”