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1. The Sporting Exchange (BetFair-TradeFair) is a gaming company that operates on many countries.
2. It would happen, occasionally, that one country’s laws would allow fixed-odds bookmakers —but not betting exchanges.
3. BetFair would still want to operate in that country –as a bookmaker, not as a prediction exchange– to have its name out there —with the long-term goal of reverting it to a full exchange, once the laws will have been modified, later on, in the future.
4. To do so, in the summer of 2007, BetFair began to hire people to provide prices and manage risk for that Internet sportsbook. That sportsbook has no connection whatsoever with the UK betting exchange.
5. One un-hired job candidate told everyone who would listen that BetFair was preparing to do some hidden market-making on their betting exchange —hiring a “team of traders”.
6. BetFair wouldn’t deny those allegations, out of fear of hinting its competitors.
7. The sportbook, which was at the origin of that market-making rumor, is BetFair Italy —which has opened shop recently.

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• HubDub’s Nigel Eccles pinches Henry Blodget’s nose (like trumpetist Miles Davies did for one of his musicians, on stage, one day), and the damn result of that, believe or not, is that the valuation of The Sporting Exchange (BetFair-TradeFair) drops from $5 billion to $3 billion. So, either Nigel should be celebrated for telling the truth, or his ass should be kicked for ruining the party.
• PREDICTION MARKETS HAVE ARRIVED: The Sporting Exchange (BetFair-TradeFair) ranks #4 in the Silicon Alley Insider’s list of the top 25 digital startups, and is valued at 5 billion US dollars. (Yes, billions.)
• BetFair Education has now a sub-site within the BetFair blog.
• BetFair-TradeFair has won its second Queen’s Award for Enterprise in its eight-year history.
• The UK’s Gambling Commission is after BetFair and Betdaq for in-running (in-play) betting
• Ed Murray has computed what Mark Davies never did: EVENT DERIVATIVE TRADERS WANT EXTERNAL, TRUSTED SOURCES OF INFORMATION —NOT THE EXCHANGE-PRODUCED SAUSAGES.
• BetFair is experimenting a phenomenal revenue growth with sports prediction markets, as I am typing this post. Maybe our good friend the “pragmatist” could look into that, and report his research findings to the CFTC. I’m sure he’ll do. The delicious sound of a red-hot cash register, with the dollars (or here, pounds) pouring in like the Niagara falls —that’s “pragmatism” in its purest form, to me.

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Only 45 suspicious tennis matches out of the hundreds of thousands of matches played over the last five years.

That’s peanuts.

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Via Steve Roman

Bloomberg

New York Times

The Times (of London)

The Guardian

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Previously: The Mark Davies speech on sports, corruption, sports betting, and BetFair

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• Towards an anti-drugs and anti-corruption body for all sports? — BetFair’s proposal…
• How BetFair markets are settled in the situation where their integrity team are unhappy about some aspect of the betting on that event
• If the British legal betting companies offer bets on the sport, it is because there is demand for bets on the sport —and if that demand were not offered in a regulated environment, it would be filled in an unregulated one (like what we see with TradeSports-InTrade and MatchBook in the US market).
• BetFair’s message to the UK’s Gambling Commission on betting and the integrity of sports
• Pikum is a new kind of betting game that can be played for bragging rights. In each Pikum, you compete with other players to see who can best predict the results of sports or other events. Pikums can be created by anyone, and easily shared online with friends.
• The UK’s Gambling Commission is after BetFair and Betdaq for in-running (in-play) betting
• BetFair is experimenting a phenomenal revenue growth with sports prediction markets, as I am typing this post. Maybe our good friend the “pragmatist” could look into that, and report his research findings to the CFTC. I’m sure he’ll do. The delicious sound of a red-hot cash register, with the dollars (or here, pounds) pouring in like the Niagara falls —that’s “pragmatism” in its purest form, to me.

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And she is out with a Press release.

Via Fabian John (Financial Services Consultant)

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ABC 20/20 featuring InTrade - (May 9, 2008)

Foretelling The Future: Online Prediction Markets — (4 pages in all)

ABC video

YouTube video

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• ABC 20/20 featuring InTrade on May 9, 2008 — 10:00 pm ET
• ABC 20/20 — A good (but servile) explainer on the wisdom of crowds and the prediction markets
• Speculating on event derivative markets is not “investing”.
• Why I don’t believe in VP prediction markets
• Video on InTrade’s political prediction markets
• InTrade is not a “bookie”, and its traders are not “gamblers”.
• The problem with Intrade

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BetFair TaiKai

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• BetFair Malta outputs a simplistic prediction game (about the 2008 European soccer tournament). I’m not impressed at all.
• Do BetFair understand the “statistical concept of expectation”?
• TOTE Tasmania has entered into an agency agreement with Betfair Australia that will provide it with access to Betfair’s global customer base of more than one million punters.
• How BetFair did treat its customers on the day that the BetFair Starting Price system crashed down
• Reverse engineering of a nasty BetFair rumor that made rounds on Midas Oracle and elsewhere
• The BetFair–Fallon debacle cost British taxpayers £950,000.
• BetFair Education has now a sub-site within the BetFair blog.

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Directory listing of Betfair price files

Don’t ask…

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• PREDICTION MARKETS HAVE ARRIVED: The Sporting Exchange (BetFair-TradeFair) ranks #4 in the Silicon Alley Insider’s list of the top 25 digital startups, and is valued at 5 billion US dollars. (Yes, billions.)
• The BetFair Starting Price is such a phenomenal success that their MSR-like system melted down under pressure last Saturday, April 5th, 2008, for the British equivalent of the Kentucky Derby —the Grand National at Liverpool.
• How BetFair did treat its customers on the day that the BetFair Starting Price system crashed down
• Is BetFair (a de facto monopoly) playing evil with traders and developers?
• TOTE Tasmania has entered into an agency agreement with Betfair Australia that will provide it with access to Betfair’s global customer base of more than one million punters.
• The hard questions that BetFair’s Mark Davies ducked
• BetFair-TradeFair has won its second Queen’s Award for Enterprise in its eight-year history.

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BetFair actively report betting that appears to them out of the ordinary. And, if any sport regulator has concerns, then BetFair provide them with additional information. BetFair, of course, has no say in whether a criminal offense has been committed, and no input into the prosecution (the Crown Prosecution Service).

In the Fallon case (an Irish jockey suspected of collusion with some bettors), the British police investigated the incidents. BetFair provided testimony. But the British justice decided that mister Fallon shouldn’t be convicted.

This week, the British police aired an internal report about why they lost the case —their fault, they write. I won’t analyze the full case on Midas Oracle, but I just want to touch 2 things:

1. The Times (of London) says that “any prosecution based on race-reading, that is proving a motive by [analyzing] a jockey’s ride, is doomed because it is open to so many interpretations.”
2. The British Police “had an inadequate understanding of the nature of online betting exchanges and the process of laying a horse to lose, the mechanism by which the defendants were alleged to have attempted to profit from fixed races.”

This second point was very clear during the trial, and the media reported, at the time, that BetFair didn’t do a good job in making sure that the Police would understand all the facts and mechanisms involved. Below are the media excerpts that make that case.

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The Guardian Unlimited:

[...] [Acting detective inspector Mark Manning] began his investigation by visiting the offices of Betfair, the company through which the bets involved in the case were made. He was told that Fallon’s fellow defendant Miles Rodgers had risked a total of £2m, but Manning misunderstood and left with the belief that Rodgers had made a net profit of that amount. By the time the trial opened more than three years later, it had become clear that Rodgers had made a net loss of over £250,000 on the races concerned. [...]

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The Guardian:

[...] In part, the fault is Betfair’s, for failing to ensure that police investigators understood the meaning of the complex evidence they provided, and for passing pages of irrelevant data to the Crown that provided one of many early embarrassments for the prosecution. [...]

The senior detective in charge of the investigation, Mark Manning, had met [Betfair lawyer David O'Reilly] at Betfair’s offices earlier that year [in 2004]. Manning left with a fundamental misunderstanding - that Rodgers had made a net profit of £2m from his betting activities, when in fact this was the total amount that had been risked. By the time the trial began, it had become clear that the accounts controlled by Rodgers had in fact made a net loss of more than £250,000 on the 27 races investigated.

Betfair provided more than 300 pages of data in evidence, showing the betting activities of Rodgers’ accounts on these 27 races. O’Reilly, the first witness called, claimed in court that this data showed how Rodgers would take bets on certain horses at much bigger odds than were being offered by anyone else. Under cross-examination, however, O’Reilly was led to the realisation that the Betfair data for eight of the 27 races included details of bets made after the race had started, at which point larger odds could be justified by mid-race developments. Observers were shocked that Betfair could have made such a blunder in handling its own data.

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The father of one of the accused (and now cleared) jockey:

The man from Betfair admitted at the start of the trial he had misled police as to the amounts that had been gambled and then they brought in an expert witness from Australia [Ray Murrihy, Racing NSW's chief steward] who doesn’t know how things work here [in the U.K.].

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Daily Mail:

The case highlighted the difficulty of proving, forensically and legally, that a jockey has tried and succeeded in stopping a horse from winning.

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BBC News:

[...] At the end of the day, serious questions will be asked of both City of London Police and the Crown Prosecution Service as to why they agreed to proceed with a case that was so flawed and had little chance of success.

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• The BetFair–Fallon debacle cost British taxpayers £950,000.
• The BetFair Starting Price is such a phenomenal success that their MSR-like system melted down under pressure last Saturday, April 5th, 2008, for the British equivalent of the Kentucky Derby —the Grand National at Liverpool.
• PREDICTION MARKETS HAVE ARRIVED: The Sporting Exchange (BetFair-TradeFair) ranks #4 in the Silicon Alley Insider’s list of the top 25 digital startups, and is valued at 5 billion US dollars. (Yes, billions.)
• The UK’s Gambling Commission is after BetFair and Betdaq for in-running (in-play) betting
• BetFair-TradeFair has won its second Queen’s Award for Enterprise in its eight-year history.
• BetFair Education has now a sub-site within the BetFair blog.
• Is BetFair (a de facto monopoly) playing evil with traders and developers?

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InTrade and some play-money prediction exchanges will conjointly introduce what they call “standard” prediction markets —based on standardized event derivative contracts.

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• The problem with Intrade
• Collecting bits and pieces of information, and aggregating it, so we can understand what people know.
• 75,000 people turned out to hear Barack Obama at Waterfront Park, Portland, Oregon, U.S.A.
• The Prime Minister of Ireland has just said he will resign, but neither InTrade nor BetFair would give the first fig.
• ABC 20/20 featuring InTrade on May 9, 2008 — 10:00 pm ET
• Michael Moore tells the Democratic people to go Barack Obama in Pennsylvania (a two-tier state), but the polls and the prediction markets tell us that that won’t do the trick.
• DAYS OF RECKONING, PART TWO: Matt Drudge features the prediction markets. + Reuters has the right terminology (”traders”, “prediction exchanges”) but ignores BetFair.

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The image above is static —it’s a screen shot of the chart widget, not the chart widget itself. (I haven’t had access to their code, see, so I am not able to embed it here for you.) To view their updated widget, right-click on the image above, and open the link into a new browser tab.

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1. First time I see a big UK newspaper associates “BetFair” with the term “prediction markets”.
2. Their explainer is quite acceptable.
3. That is a great step for BetFair. Congrats.
4. I’d explain things differently —and I dislike that they suggest that the prediction markets can greatly outperform the polls, described as not “accurate enough”. Pollsters do the best they can, it seems to me.
5. The output that BetFair hands out and the journalists seek are probabilities (expressed in percentages) —not those damn decimal/digital odds.
6. The chart widget they use is crappy. I already discussed it. It has usability problems with FireFox. It does not go into feeds. And it’s not readable enough. Look at the alternative, just below. (The only reason those idiots of journalists are using that crappy widget is that BetFair customized it for them, by putting their fucking newspaper trademark on top of the widget.)
7. Anyway, the dead-tree, print newspapers are dying, and the future belongs to blog networks.

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The chart below is better… more readable… and it goes into feeds… - But those idiots at the Telegraph won’t show it to you because it is not pinned with the “Telegraph” trademark.

Please, BetFair, do give us the possibility to have a wider time period for the chart data.

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• Huge quality improvement (well, considering that they started from 1,000 meters below the sea level) in the BetFair blog, lead by their resident prediction market guy, Mike Robb
• The brand-new HubDub chart widgets —which InTrade, TradeSports, BetFair, TradeFair, Betdaq and NewsFutures could look into for ideas
• Testing the new HubDub chart widgets
• Prediction Markets & Data Visualization
• How BetFair screw up the “Next Mayor Of London” embeddable, enriched, compound chart widget —BIG TIME
• Newspapers publish static charts, which quickly become obsolete —in a Google world where old content is King.
• To build their “Next Mayor of London” chart widget, the smart asses at BetFair-TradeFair chose to use the most hated web technology —Flash.

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Via Keith Anderson (Senior Analyst at RNG)

Chapter 7 - What the Crowd Knows: Collective Intelligence in Action - by Jeff Howe

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He is a Wired journalist.

I prefer stuff written by economists like Robin Hanson, Justin Wolfers, Eric Zitzewitz, Koleman Strumpf, David Pennock, etc.

What’s the point of having the mainstream media journalists writing their own stuff when we can cite the people listed above????

I believe in the “In His/Her Own Words” principle.

Enough with the journalists. I’m fed up by them.

The Internet enables us to access directly the people who know. Let’s bypass the journalists. Let’s bulldozer this unnecessary filter.

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• The Rise of Crowdsourcing: Creative Wisdom of the Crowd — Tuesday, May 20th, 2008 at 6:00pm — @ Bo Cowgill’s Alma Mater
• Prediction markets = “the future of journalism” —said, from day one, Emile Servan-Schreiber of NewsFutures. Emile, if you have balls, let’s do it —all together.
• Deep Throat on the journalists’ fatigue for reporting on prediction markets
• InTrade is not a “bookie”, and its traders are not “gamblers”.
• NEWSPAPERS ARE DOOMED: CraigList is killing BOTH the offline Washington Post AND the online Washington Post.
• Spot the red line. The future of prediction market journalism is on blogs —not on dead-tree media. (((Well, all dead-tree media have blogs, now.)))
• The Absence of Teams In Production of Blog Journalism

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Wanna better political prediction markets? Ask Gallup to generate better polls —because that’s what traders eat for breakfast.

I have been telling that to Barry Ritholtz —but he stays on his position.

Thanks to Barry for listening.

Let’s move on to another polémique.

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• Ubber finance blogger Barry Ritholtz believes in magic. He believes that, with more volumes on the event derivative markets, comes the Omniscience —capital “O”.
• 2020’s PREDICTION MARKET JOURNALISM = Polls + Experts + Prediction Markets
• “Don’t ask the experts. Ask the prediction markets. They know better.”
• “Is Clinton’s Pennsylvania Lead Really 20 Points?”
• Final InTrade v. Zogby Showdown Results
• WISDOM IN CROWD’S COMMENTS: Who cares about the accuracy of the prediction markets when the polls (or the exit polls) are giving us the primary information that is, a bit later, reflected in the prediction markets?
• When Chris Masse (with typo) pinches Henry Blodget’s nose

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