Comments on: Prediction exchanges should be commercial enterprises and make big profits. http://www.midasoracle.org/2006/12/11/prediction-exchanges-should-be-commercial-enterprises-and-make-big-profits/ Prediction Markets For All Thu, 04 Dec 2008 03:09:01 +0000 http://wordpress.org/?v=2.6.5 By: Chris Masse http://www.midasoracle.org/2006/12/11/prediction-exchanges-should-be-commercial-enterprises-and-make-big-profits/#comment-385 Chris Masse Tue, 12 Dec 2006 16:22:19 +0000 http://www.midasoracle.org/2006/12/11/prediction-exchanges-should-be-commercial-enterprises-and-make-big-profits/#comment-385 Perry Metzger has posted a great comment: http://www.overcomingbias.com/2006/12/should_predicti.html#comments Perry Metzger has posted a great comment:

http://www.overcomingbias.com/.....l#comments

]]> By: Jason Ruspini http://www.midasoracle.org/2006/12/11/prediction-exchanges-should-be-commercial-enterprises-and-make-big-profits/#comment-384 Jason Ruspini Tue, 12 Dec 2006 15:15:01 +0000 http://www.midasoracle.org/2006/12/11/prediction-exchanges-should-be-commercial-enterprises-and-make-big-profits/#comment-384 I am crossposting this comment here: Yes, IEM hasn't had a problem for over fifteen years. The next such exchange would likely face greater challenges, but it's the legal costs more than the legal risks that have stopped people so far. For one thing, a non-profit status would often absolve aggravated/felony gambling charges, and would count as social gambling in many states. The exchange could also block access from states that seemed hostile or where internet gambling was clearly illegal. And this leaves aside the question of whether a skill-based prediction market is even gambling, which could probably be won with sufficient legal firepower. Not charging trading fees would lead to greater liquidity and more accurate prices. A lack of fees might also be logical in some hedging markets. For example, should dispersed interests hedging against the continuation of some industry subsidy be charged trading fees? -- I would just add that it would be no more difficult to assess the performance of a non-profit exchange vs. a for-profit exchange. Also, many of us are interesting in prediction markets mainly for non-monetary reasons. I am crossposting this comment here:

Yes, IEM hasn’t had a problem for over fifteen years. The next such exchange would likely face greater challenges, but it’s the legal costs more than the legal risks that have stopped people so far. For one thing, a non-profit status would often absolve aggravated/felony gambling charges, and would count as social gambling in many states. The exchange could also block access from states that seemed hostile or where internet gambling was clearly illegal. And this leaves aside the question of whether a skill-based prediction market is even gambling, which could probably be won with sufficient legal firepower.

Not charging trading fees would lead to greater liquidity and more accurate prices. A lack of fees might also be logical in some hedging markets. For example, should dispersed interests hedging against the continuation of some industry subsidy be charged trading fees?

–

I would just add that it would be no more difficult to assess the performance of a non-profit exchange vs. a for-profit exchange. Also, many of us are interesting in prediction markets mainly for non-monetary reasons.

]]>