#1. If you are on the TradeSports website, and click on any non-sports contract link, you are now transported (“redirected”) to the appropriate InTrade webpage. The problem is that, in the past years, bandits have used this tactics (“phishing“), and, now, any up-to-date browser will warn you if it senses anything fishy. (Please, double check what I’m saying because I’m no computing expert.) My FireFox browser tells me:
WARNING: CONTAINS UNAUTHENTICATED CONTENT
#2. If you come directly to the InTrade website, you are served by the old system. Among others, you won’t be able to grab the code lines to republish any dynamic chart on your site or blog.
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Does the InTrade-TradeSports splitting really make sense? It won’t make InTrade more legal than it is today —InTrade products are illegal in the U.S.A., until further notice from the US CFTC or the US Congress. Furthermore, this splitting sends the wrong message, namely that a real-money, non-sports prediction exchange can be profitable —which will never be the case, especially if you take away the financial prediction markets, and I won’t mention the 150,000 bucks. (Please, double check what I’m saying because I’m no industry expert.)
Why can’t a real-money non-sports PMX be profitable?
The revenues are not high enough to support the IT costs, a good IT team, a good marketing team, a good administrative team, the executives, etc. The prediction markets on US politics are indeed popular, and they generate good Press coverage, but they are nowhere the size of the sports prediction markets.
Note that the splitting of TradeSports-InTrade is just in the eyes of the beholders. Actually, the revenues from the TradeSports prediction markets will continue supporting the infrastructures which InTrade relies on.
Ask anybody in the industry who knows the betting exchange business. Show them the meager InTrade prediction markets —without the financial contracts, since when the CFTC fined TEN. It’s a mosquito-size business.
HedgeStreet is probably in the same situation, but they sit on VC money —how long will this last is another story.
All that said, I wish the best to InTrade and HedgeStreet —but what they really need is more traders.
HedgeStreet could attract many new traders if it satisfied the pent-up demand for political markets in the US.
Such a market would remove much of the unease that some have of CFTC regulation. Again, I think a DCM will float this contract by the 2008 election, confirming the form of prediction market regulation in the US.
“political markets in the US”
Yeah, we have heard of US PRESIDENTIAL election prediction markets being permitted by the CFTC. InTrade has a much wider range of offerings, as you all know better than I do.
(Your other argument seems true to me.)
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