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Copy of my response:
Thanks Nigel, Yes, people are working on making markets more usable. I know this is one of Jason Trost’s main points, but having a public market where people can make bids and offers, even if it is difficult to understand, is the first step.
Americans don’t feel welcome at Betfair for a number of reasons including that fact that political markets are hidden between pelota and snooker. Even among non-Americans, the exchanges appeal to different audiences and that’s probably the biggest reason for lack of arbitrage between the two.
Also I think the 10x number is way off for political markets. When you convert the Betfair matched amounts to Intrade accounting logic (sum all of the risk for each transaction, not just the “backer’s stake”), I get $13.6m Betfair vs. $9.9m Intrade in the Obama market and $9.1m Betfair vs. $10m Intrade for McCain.
Jason, excellent comment.
PS: For you revenue computation, don’t forget that InTrade has a plethora of prediction markets, whereas the BetFair prediction markets seem to be limited. (However, that might change in the future.)
@ Jason “Americans don’t feel welcome at Betfair for a number of reasons including that fact that political markets are hidden between pelota and snooker”
By the same reasoning nobody feels welcome at Betfair because everything is hidden between two others, quite a poor excuse.
I agree with the “the exchanges appeal to different audiences”, The US election, like the League winners markets, are really far too long lasting to Churn over the money both for the exchange and user. $13 million would be expected in a single horse meeting that lasts 3 or 4 hours. The last week and especially the last day will boost the market figures up quite a big.
BarryO,
- I disagree with your first paragraph. BetFair is wrong to bury the political prediction markets on their frontpage. I have said that publicly and privately.
- I agree with your 3rd paragraph.
(Somewhat related note: That’s why I love the TradeFair 5-minute prediction markets.)