Comments on: “What public purpose is served in the oversight of these [event derivative] markets and what differentiates these [event derivative] markets from pure gambling outside the CFTC’s jurisdiction?”

By: Intelligent blog spam: Oddhead Blog: Prediction Markets, Gambling, Electronic Commerce, Artificial Intelligence: David Pennock: Yahoo! Research

Wed, 14 Jan 2009 22:08:38 +0000

[...] the comments seem intelligent because they are. In fact, they’re copied word for word from Chris Masse’s comments on his own [...]

By: A historic MayDay: The US government’s call for help on regulating prediction markets: Oddhead Blog: Prediction Markets, Gambling, Electronic Commerce, Artificial Intelligence: David Pennock: Yahoo! Research

Fri, 02 May 2008 20:58:45 +0000

[...] not. This entry is filed under prediction markets, commentary. You can follow any responses to this [...]

By: Chris F. Masse

Chris F. Masse — Fri, 02 May 2008 19:13:06 +0000

@caveat bettor: Thanks, Cav.

By: caveat bettor

caveat bettor — Fri, 02 May 2008 19:10:09 +0000

While I agree that the CFTC announcement language can be positively construed, I tend to be a little skeptical of actual policy producing more fruit than weeds. Unintended consequences seems par, even for the noblest of intentions and most eruditely written legislation.
Wherever possible, I believe in self-regulating organizations that draw on Coase.

By: Chris F. Masse

Chris F. Masse — Fri, 02 May 2008 17:54:59 +0000

@David Pennock: My rebuttal of your rebuttal is here:
http://www.midasoracle.org/2008/05/02/ask-anybody-who-suffered-the-recent-bloodletting-at-hedgestreet-cftc-regulation-can-impose-crushing-burdens-it-has-nearly-driven-that-innovative-business-into-the-ground/

By: Chris F. Masse

Chris F. Masse — Fri, 02 May 2008 16:01:47 +0000

@David Pennock: Thanks for your comment. I’ll put a note in the post.
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1. It’s nothing new. The CFTC will just formalize the current status quo.
2. We are prisoner of the CFTC regulations and the US Congress’ distaste of sports “gambling”. As for the profitability of prediction exchanges in that strict environment, I don’t see how you can deny that HedgeStreet went bankrupt even though it was well funded. Isn’t that a hard fact?
3. You’re right, but all “pragmatists” should follow a business plan and make profits. See point #2. Pragmatists won’t make miracles.

By: David Pennock

David Pennock — Fri, 02 May 2008 14:12:40 +0000

My rebuttals:

1. To the contrary, IMO this is a major step forward. The link is to one official’s commentary. The current CFTC release seems to reflect a real readiness to listen to all reasonable arguments and move forward.
2. Remains to be seen — at least this way companies can innovate.
3. You’re ignoring the pragmatists. There are many people (like me) who would like to see all forms of gambling legalized in the US, however from a realistic point of view, I’d prefer to see some markets legalized rather than none.
4-6. Agreed