Reality Check on TradeSports-InTrade John Delaney’s Exil Statement

Speaking via Skype from Ireland, E.U., where he is now in exile, TEN CEO John Delaney made a number of points. Let’s check. (Note: This is the second version of his statement, on another URL.)

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We have become regarded by many as the pre-eminent real money prediction market in the world.

Other than in a mythomaniac’s mind, the “pre-eminent” real-money prediction exchange in the world is, of course, BetFair.

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As an aside it is worth saying that we are not bookmakers, nor are we involved in the business of bookmaking, betting or wagering. While we often get questions like who sets the prices we typically reply by saying we are just like eBay who provide a platform for people to trade all manner of things. We similarly provide a platform for people to trade on.

Exactly. Just a small remark, though. BetFair, the world’s #1 betting exchange has announced last week that it would go into multiple bets, with liabilities, which will make it, in part, a… bookmaker. Once again, we see that TradeSports-Intrade is far away behind BetFair in terms of customer/consumer comprehension.

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[...] we decided to divest and disassociate from sports. [...]

That does not make the non-sports prediction markets more legal. As I wrote 5 minutes, TradeSports-InTrade tried two legal approaches and failed each time.

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So we [Intrade] will only have prediction markets and there will be no prediction markets on TradeSports.

I respectfully disagree with John Delaney as for the vocabulary. I use the term “prediction market” without discrimination (i.e., whether it’s sports or non-sports), as long as a prediction is floated and traded. Furthermore, scholars have shown that sports betting markets and sports prediction markets show some kind of predictive power.

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Simple information like the activity levels on all platforms, be they play money, real money, public, and private where possible.

I’m a strong skeptic.

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[...] API trading now accounting for a major part of all trading.

Which is why InTrade-TradeSports will charge more for that —not the end users, but entities like 1st Tick and Saikou Trader.

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[...] I would like to let you all know that from the evidence we see there is little fatigue relating to prediction markets.

That was before this.

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Prediction markets are not infallible. They are prediction markets, not guaranteeing markets.

For more information, see the works of scholars/economists, like David Pennock and Eric Zitzewitz.

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Where new markets are concerned, there may often be issues related to market definition, interpretation, and understanding. We experienced an issue with our North Korean market definition. We have learned from this as have our community and I expect the broader industry instead of implying infallibility of PM’s, or arguing the superiority of play over real money, our call to action should be along the lines that…

#1. “new markets” – Not clear what he means by “new markets”. Newly released contracts, or non-sports prediction markets?

#2. “North Korea market” – It’s worse than a contract definition. It is far worse than that. There is a management problem, and an ethics problem, too. And let’s not talk about all the insult e-mails I have received from Ireland since last July’s crisis.

#3. “implying infallibility of PM’s” – Nobody in the industry is claiming that. These naysayers are the leftists who had embraced prediction markets before the 2006 US elections and who are now turning against them.

#4. “arguing the superiority of play over real money” – This is a clear slam on NewsFutures’ EJSS, and I fully agree.

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Launching a PM for a global News Organisation.

BetFair partnered with Yahoo! U.K. and it didn’t yield anything.

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We have been slowly deploying a public play money market.

Yeah, Midas Oracle announced the NewsFutures killer, in December 2006. And as I said, what is great is that the order-entry and analysis software will be used with a play-money prediction exchange. It’s great.

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Regulation. As you may know we have long standing regulatory ambitions. Last year we notified the CFTC of our intention to operate an Exempt Board of Trade.

Announced for June 2006. Then, for September 2006. Note that John Delaney’s statement is deceptive. He is talking “regulation” whereas in fact any EBOT is exempted from CFTC regulation —for the reason that a EBOT is a private club of fat cats.

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Intrade is now focused on prediction markets and massively excited about this fact.

Hummm… Sorry to pierce John Delaney’s bubble, but only the TradeSports sports prediction markets have been profitable.

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Finally, to any of you thinking of getting involved in or supporting prediction markets, or considering their use or validity, whether they use play or real money, be they public or private, then I urge you to grab hold of a fantastic opportunity.

Midas Oracle .ORG is the most popular group blog on prediction markets, with 90 blog authors registered, and John Delaney has censored it on the TradeSports forum.

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I would really like to see the faces of those two or three persons who paid 300 bucks to hear all that InTrade’s P.R. crap.