I asked Chris Hibbert whether they are “-exchanges”-.
Chris Hibbert:
It looks like it from a cursory glance. In both cases, you can buy and sell, and the prices appear to be set by market interactions rather than institutional fiat. They both have a feedback mechanism based on “dividends” produced by on-field performance. ProTrade has a sophisticated formula that takes into account the players’ contribution to a winning season. SDX seems to base their dividends purely on wins and losses. The latter is easier to understand, and probably closer to the way most fans think about things. I think ProTrade is justified in believing they are closer to capturing the individual athlete’s contribution.
There’s also the difference in betting on players or teams. I think both might be helped by offering bets based on both players and teams. But until they cover hockey, I won’t spend a lot of time there. I don’t want to have to start following one of the major sports in order to bet in these play money markets.
ProTrade has a market maker, and SDX uses book orders.
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External Links:
– ProTrade
– Sports Derivative Exchange
– Zocalo (the open-source software for enterprise prediction markets, coded by Chris Hibbert)
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UPDATE: The SDX co-founder has a comment.
