PaddyPower is a bookmaker, not a prediction exchange. Hence, the Tiger Woods divorce cost odds are computed by an analyst, not by the market.
1. It is not the “-punters”- who have fabricated the odds, but a PaddyPower employee.
2. It is not a set of “-market odds”-, but a set of bookmaker odds.
3. The bookmaker analyst does not have access to any confidential contract. So, the PaddyPower press release is aimed at suckers in the media.
New York Times’- Andrew Ross Sorkin:
Betting on the Next Wall Street C.E.O. Exit
[…] Paddy Power, the Irish gambling site, has decided to tap the wisdom of crowds and set odds on who the next C.E.O. casualty will be. […]
Andrew Ross Sorkin does not know what he is talking about. PaddyPower is a bookmaker (which does not prove to us that it balances its book on those CEO Termination betting lines), and not a prediction exchange like InTrade (which, indeed, taps “-the wisdom of crowds”- and is wide open about it).
UPDATE: Niall O’-Connor…-
The over-round on Power’-s market is 154.8. This means that they expect to pay out 100 for every 154.8 that they take in- yielding an expected profit of 54.8/154.8 = 35.4%. This is of course a disgrace. It reflects the fact that the market is nothing more than a gimmick – as soon as they catch sight of anybody looking to get a decent bet on, it is likely that they will simply close the book. A clear case of tapping into the wisdom of fools!