Tag Archives: prediction exchanges

The UKs Gambling Commission is after BetFair and Betdaq for in-running (in-play) betting.

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– Do you have any information about the customer profile in the in-running betting market (ie is it made up predominantly of specialist, knowledgeable betting customers)? &#8230- sources of information and time delays- availability of high-speed broadband- computer software packages that are specifically designed to assist in-running betting customers (known as ‘bots’).
– Do betting customers with traditional bookmakers and betting exchanges also take part in spread betting and is it a direct competitor to in-running betting?

UK&#8217-s Gambling Commission – PDF file

Via Adonis

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UPDATE: IN-PLAY BETTING: BetFair is already compliant with the Gambling Commission&#8217-s first pointer.

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HubDubs Nigel Eccles pinches Henry Blodgets nose (like trumpetist Miles Davies did for one of his musicians, on stage, one day), and the damn result of that, believe or not, is that the valuation of The Sporting Exchange (BetFair-TradeFair) drops from $5 billion to $3 billion. So, either Nigel shoul

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Nigel Eccles:

How did you forget yadda yadda yadda. [ Hilarious. :-D ]

Nice list, roughly makes sense but lots to disagree with (as you would expect). However one clear mistake is BetFair. They should be valued at $3 billion. They just did a recapitalisation which distributed 10% of the company in cash to shareholders (I got the check this morning). It was at a valuation of ?1.5 billion, so unless you are even more bearish on the exchange rate that works out at $3 billion.

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Henry Blodget:

Thanks for the info on Betfair&#8211-that&#8217-s exactly the sort of concrete detail we&#8217-re especially looking for. We&#8217-ll see if we can confirm, and, if so, the valuation will drop to $3 billion.

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And there&#8217-s another interesting comment, on the other page:

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Insider:

why the gratuitous &#8212- and painfully ignorant – -swipes at the USA?

can&#8217-t you do your job without the silly &#8212- and, again, factually incorrect &#8212- morals lectureds and editorializing?

actually the U.K. is one of the few countries in the world where online gambling is essentially legal (though the U.K. still hasn&#8217-t sorted out all the laws it is creating to govern online betting)

many EU countries are literally at each others throats about how/when to tax internet gambling (principally because state-run lotteries are specifically carved out of the E.U. free trade agreements)

japan, australia and china have sever and horrible and harsh punishments for internet gambling

of course, pretty much all of the islamic world puts people to death or dismemberment for breaking qu&#8217-ran-ic law – and gambling is totally and utterly forbidden under the qu&#8217-ran

it is you who are &#8220-of arbitrary morals&#8221-. stick to blogging.

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Insider&#8217-s comment sounds informed, but he/she should have avoided the nasty last line.

&#8220-Stick to blogging&#8221- is an insult I was served with, recently, (by a UK-based financial trader), so I can relate. But that&#8217-s never helpful. Educate that blogger, instead. You&#8217-ll get a better ROI, believe me.

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Meet bettor/trader Harry Findlay.

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Harry Findlay

&#8220-Nowadays, some casinos even have two zeroes on the roulette wheel. Anyone playing them should be certified. But gambling on a Champions League match, a Premier League match, you can win.&#8221- This, he explains, is because modern betting exchanges take a far lower proportion of their punters&#8217- stakes in profit. &#8220-There is no margin, it&#8217-s about 2 per cent.&#8221-

&#8220-If I were leaving school now, the chances of ending up behind bars are the same as me skiing for Britain in the London Olympics. It only happened because of all the lies and kidology that used to go on with betting. Nobody can get [bets] on with bookmakers, because when you win you get closed down. Now it&#8217-s all up front. We&#8217-re now living in the real world. Press that button on Betfair and let&#8217-s see how good you are. Simple. There&#8217-s no myths or lies any more, it&#8217-s all fact.&#8221-

He also believes that direct, accountable trading via the internet betting exchanges is taking the carpet up on the cheats, and he colourfully repaints some of the turf&#8217-s most honoured names as arrant frauds. &#8220-At the end of the day, it don&#8217-t matter how big your house is,&#8221- he says. &#8220-Nurses and teachers working for nothing, they&#8217-re the real legends. If you cheat, what kind of buzz is there, conning all that lot?&#8221-

Read the previous blog posts by Chris F. Masse:

  • Ratted by his bank, sex-addict New York governor Eliot Spitzer (alias “Client 9”) resigns.
  • BBC’s coverage of politics is dull like taxes, death and German sausages.
  • Never talk when you can nod, and never nod when you can wink, and never write an e-mail because it’s death. You’re giving prosecutors all the evidence we need.
  • Is Justin Wolfers a libertarian? Probably not.
  • The information technology that caught Eliot Spitzer
  • Eric Zitzewitz’s 10 minutes of fame
  • Fun with conditional probabilities

Do sports prediction markets corrupt sport? No.

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Mark Davies (&#8221-managing director of corporate affairs at BetFair&#8221- = their spin doctor) in The Guardian:

Does the existence of betting exchanges corrupt sport?

NO

In the world of finance, it has always been far easier for employees to have a negative impact on a company&#8217-s share price than a positive one. Even a chief executive would be hard pushed to cause a price rise on any given day, but anyone with physical access to the company can very easily cause a fall. No one would suggest people should only be able to buy shares, and not sell them. Instead, regulators ensure that sanctions against corruption tip the balance heavily against trying it. Make the penalty draconian, and you deal with corruption at its heart.

Betting on sport is no different. The only people who can corrupt sport are those taking part – a fact unchanged by the existence of betting exchanges. If you prevent people from succumbing to the temptation, would-be corrupters have no one to help them . You and I cannot rig a race just because we can bet against its outcome: we need someone who can affect the result. If that person might lose a livelihood, would they risk it for a fast buck?

Attack corruption at source, and it does not matter where the bet was placed. Nevertheless, some still long for the days when more traditional bookmakers held every card (an interesting notion considering what has historically been their dubious reputation)- others prefer a Tote monopoly- and some believe that banning bets against outcomes would constrain corrupters.

This series of arguments is based on the naive belief that a black market does not exist. This is absurd. Asian syndicates behind apparently rigged football matches (like those who turned floodlights out at grounds in the late 1990s) are no more dependent on Britain&#8217-s legitimate market than Colombian drugs barons are on sales of aspirin at Boots. The difference between legal, regulated, transparent betting – nowhere more so than on the leading betting exchange [= BetFair], where every transaction is open to scrutiny from 29 different sporting regulators – and the murky, illegal market, is the difference between chalk and cheese.

Black markets thrive where legal ones offer poor value. Now that the exchanges offer the best value, those previously tempted by odds on the black market are returning to the legal fold. Corruption-free sport comes from total transparency. The exchanges are the only part of the market that offer it. People get hung up on &#8220-betting to lose&#8221-.

Leave aside the obvious: bets to win (most clearly demonstrated in two outcome sports like tennis or snooker) are direct bets on the opposite outcome to lose. &#8220-Betting to lose&#8221- is just betting at value: if the price unfairly reflects the realistic chance of something happening, why should you not bet against it?

Value bets, placed for or against, are perfectly legitimate- acting to impact a given outcome adversely is corrupt. But banning the former through fear of the latter is like banning cutlery because some people use knives to harm. It is not the knives doing the damage, but the criminals using them. Legal betting does not corrupt sport- people do – and they are more likely to do it when they think they w ill not get caught. Measures to protect sport are not best aimed at open, transparent, and audited betting markets but through its participants, where the corruption can occur.

Excellent.

Prediction Market History + Prediction Market Journalism

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The New York Times:

[…] Long before political prediction markets sprouted on the Internet, election bets — whether the stakes were money or embarrassing public spectacles — were a ubiquitous part of the American political scene. The practice, which began informally with petty stakes in pool halls in the late 19th century, was by 1900 a multimillion-dollar trade on Wall Street.

In the 1916 contest between Woodrow Wilson and Charles Evans Hughes, about $160 million (in current dollars) was wagered on Wall Street’s outdoor “curb exchange.” By contrast, the 2004 election saw less than $25 million in contracts change hands over the outcome on the Dublin-based InTrade.com market, the largest and most active for-profit market for odds on current American elections. […]

“Until the 1920s, New York would have been the center of gambling in the United States, what Las Vegas is today,” said Paul Rhode, a professor of economic history at the University of North Carolina, Chapel Hill. Technically, gambling on the result of an election was — and is — illegal, but the laws were not widely enforced, and newspapers routinely reported the names of prominent bettors and the Wall Street firms that held the stakes. […]

With the rise of polling in the 1930s and a decline in public approval of political gambling, election betting fell out of favor. The expansion of horse-track betting in 1939, giving people another arena in which to place their bets, also weakened interest in the markets.

Reporters, too, could get political forecasts from increasingly reputable polling agencies. While The New York Herald Tribune still reported on the betting as late as 1940, the odds were relegated to an occasional small paragraph on the financial page, and neither bettors nor stakeholders were named.

The online prediction markets that cropped up around 2000 were less a dot-com revolution than a road back to the earlier form of election coverage.

“In a few years, we may regard the second half of the 20th century as the aberration in which the press used polls rather than markets to track political races,” Justin Wolfers, a business professor at the University of Pennsylvania’s Wharton School, wrote in an e-mail message. “And in the 21st century, we may return to the habits of the early 20th century, reporting on political races through the lens of prediction markets rather than polls.”

Justin Wolfers is right that a new form of journalism may emerge (I call it &#8220-prediction market journalism&#8220-). However, my view is that it will be a minor &#8212-most news media will still be reporting polls rather than prediction market odds.