InTrade has a higher PageRank than BetFair. No change.

No Gravatar

Google has just updated its external PageRank servers. (The PageRank is updated internally in a continuous way, but Google updates its external servers once a quarter or so.)

- InTrade is 7/10. BetFair 6/10. HSX 6/10. HubDub 6/10.

- BetFair’-s blog (Betting @ BetFair) is 5/10, proving, once again, that it is a mediocre publication run by mediocre people. BetFair’-s second blog (BetFair Predicts) is 4/10. Midas Oracle is 6/10.

- For the record, the goal to attain (for both exchanges and publications) is 7/10.

Who has the best analysis for Chicagos failed bid for the Olympics?

IOC

Prof Michael Giberson:

I think the a€?small, secretive committeea€? explanation is weak [].

Bradbury does an excellent job sifting through the shifting coalitions revealed in the three rounds of IOC voting. Neither Madrid nor Toyko showed any significant ability to attract votes as the rounds proceeded. It was going to be Rio or Chicago all along, but Chicago was weakest in the four-way vote and lost early, leaving the games to go to Brazil.

Based on Bradburya€™s [analysis], Ia€™m convinced that the decision was pretty much a toss up between Chicago and Rio. That conclusion was also implied in the prediction market prices just before the decision. Sure, the prediction markets favored Chicago, slightly, over Rio- I dona€™t think you can call it a miss given the closeness of the decision.

Well:

  1. The voting mechanism of the IOC regarding the 2016 Olympics venue was known to the news media and the prediction market traders (like Ben Shannon) well before the vote.
  2. The prediction market traders gave a surreal boost to the Chicago probability.
  3. The reality check is that Chicago was the weakest candidate.
  4. Hence, the prediction market traders were not informed enough about the basic facts regarding the IOC voting, for the reason that the International Olympic Committee is governed by secrecy, politics, and pork.

Next: “-I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction.”-

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

- BetFair’-s event derivative prices:

chicago-olympics-betfair

- InTrade’-s event derivative prices:

chicago-olympics-intrade

- HubDub’-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

If Michael Giberson is wrong, then that means that Chris Masse is right.

Paul Hewitt:

I donta€™ know that you could say Chicago was the a€?weakest linka€?, just because it got dropped first in the voting. The political process caused it to go early. However, Michael Giberson is wrong to imply that the prediction was accurate on the basis that Chicago and Rio were fairly close. Leta€™s keep in mind that the options are about as discrete as they come. Even if Chicago were to have come in a close second, it would have been a complete miss by the market.

If one needed to make a decision that depended on whether Chicago would win the bid, the prior choice would have been completely wrong, once the true outcome was revealed.

I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction. Furthermore, the discrete nature of the outcomes made it a risky prediction. Finally, Ia€™m guessing that few, if any, of the IOC voting members were involved in the prediction markets, leading one to conclude that all (or almost all) of the market participants were a€?noisea€? traders.

Elsewhere, another commentator claimed that, because the prediction market started to show Chicagoa€™s share falling during the morning of the vote, this was evidence that prediction markets work. Hardly. It does show that prediction markets rarely provide accurate predictions sufficiently in advance of the outcome, in order for useful decisions to be made.

The prediction market industry really needs to investigate the determinants of success and which types of markets (issues) have the potential to provide consistently accurate predictions. Way too much time and effort is being spent arguing about meaningless markets, trivial questions, and false accuracy claims.

-

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

IOC

- BetFair’-s event derivative prices:

chicago-olympics-betfair

- InTrade’-s event derivative prices:

chicago-olympics-intrade

- HubDub’-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Never try to divine the IOC decisions on Olympics venues, Mike.

Prof Michael Giberson,

No “-careful observer knew this in advance”- (about Chicago being a lemon), for the simple reason that if they knew, they would have downgraded Chicago on the InTrade and BetFair prediction markets, and Ben Shannon would have not bet $6,000 on Chicago.

I look forward to your contrite correction on the frontpage of Knowledge Problem —-in bold, and with a link to Midas Oracle, stating that “-Midas Oracle is the only website in the world to have told you *not* to bet on Chicago a€”and to stay (far) away from any Olympics venue prediction market.”-

My thesis holds: The International Olympic Committee (IOC) is a close aristocratic group that does not leak out good information.

IOC

Previously: The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

Previously: Chicago wona€™t have the Olympics in 2016.

ADDENDUM:

- BetFair’-s event derivative prices:

chicago-olympics-betfair

- InTrade’-s event derivative prices:

chicago-olympics-intrade

- HubDub’-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Why an analyst should assess each newly created prediction market

IOC

The Chicago candidacy, which was favored by the prediction markets (and gullible bettors like Ben Shannon), is the one that fared the worst.

As we have blogged here many times, not every prediction market is created equal. Some are bound to aggregate bits of known information. Some others (e.g., the Olympic city prediction markets) are not able to do that, because no good information is leaking out. The IOC is a close aristocratic group that does not leak out good information. Those who forgot that and bet the farm on Chicago are now licking their wounds. You need an information analyst to assess whether a particular prediction market is pertinent.

- BetFair’-s event derivative prices:

chicago-olympics-betfair

- InTrade’-s event derivative prices:

chicago-olympics-intrade

- HubDub’-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Chicago wont have the Olympics in 2016.

IOC

The Chicago candidacy, which was favored by the prediction markets (and bettors like Ben Shannon), is the one that fared the worst.

I TOLD YOU SO:

- “-Will Chicago get the Olympics? Dona€™t bet on it. Too risky.“-

- The prediction markets are not able to forecast which country will get the Olympics. The IOC is a close aristocratic group that does not leak information. Hence, it is not possible to aggregate information.

- Once again, Ben Shannon made a very bad bet. He should read Midas Oracle more often —-if he wants to avoid personal bankruptcy.

- Once again, we see that the P.R. agents of InTrade and BetFair (who both bragged about being able to predict Chicago) were overselling.

- BetFair’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):

chicago-olympics-betfair

- InTrade’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):

chicago-olympics-intrade

- HubDub’-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

Professor Thomas Rietz (Iowa Electronic Markets) was so wrong on the usefulness of prediction markets about the 2016 Summer Olympics in Chicago.

Chicago Olympic Market Might Have Value, Says Reitz (Chicago Tribune, April 17)
A credible source of information about Chicago’-s chances of hosting the 2016 Olympics would have value, says columnist Bill Barnhart. Local real estate developers, hotel operators, employment agencies, vendors of products and services to major events and others have a direct stake in whether or not an Olympics is staged here. Politicians and civic leaders presumably would want to know whether the city’-s bid has a chance, so that they wouldn’-t throw good money after bad. An auction market centered on whether Chicago will win could provide that information, even if there were no huge payoff for hedgers or speculators, said finance professor THOMAS RIETZ at the University of Iowa, a board member of the popular Iowa Electronic Markets. The Iowa market limits wagers to $500 but has an enviable track record in picking the winners of national elections. “-Our goal is to aggregate information, which is a different goal than being able to hedge the economic risk associated with something like this,”- Rietz said. “-I don’-t think it’-s an outlandish idea.”-

http://www.chicagotribune.com/business/yourmoney/chi-0704160447apr17,0,2547860.column?coll=chi-business-hed

Prof, you were 100% wrong.

Prediction markets on which country will host the Olympics have never worked.

- BetFair’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):

chicago-olympics-betfair

- InTrade’-s event derivative prices (on the far right of the chart, you can see that the price went down to zero):

chicago-olympics-intrade

- HubDub’-s event derivative prices:

Who will recieve the winning bid to host the 2016 Olympics?

FanDuel (by HubDub) is launched exclusively thru TechCrunch UK, which is, of course, upbeat on its future. Heres a more critical take.

No Gravatar

HubDub is a huge success in term of Internet popularity (pageviews, time spent on the site, etc.). However, HubDub has no business model, other than trying to get bought up by some bigger fish. Which is why Nigel Eccles and his smart team have devised a social fantasy sport game, FanDuel. Its business model (allowed under the Unlawful Internet Gambling Enforcement Act of 2006) is simple: you pay to play. –-&gt- $$$

The problem with FanDuel‘-s simple business model (selling social gaming services over the Internet) is that, unlike HubDub (which is free to play), there won’-t be free publicity generated on the Web —-other than the TechCrunch UK post. Just because you have a business model does not mean that you have a marketing strategy.

The best marketing strategy you can have on the Internet is a dual one:

  1. Give away content, software, or means for people to connect with each other-
  2. Sell something else (to the same people or to other people).

Since FanDuel won’-t be free, it won’-t generate any buzz on the Web. [UPDATE: See Nigel Eccles's comment, just below.]

Nigel Eccles is proud of the fact that his team crafted FanDuel in a matter of weeks. But have they thought long enough about marketing strategy?

-

Addendum:

The FanDuel press release:

SHAKING UP THE FANTASY SPORTS INDUSTRY

New Fantasy Sports Game Lets You Play Today, Win Today

There are at least 20 million of us playing fantasy sports every year and yet in recent years it has seen very little innovation. For many, one of the major problems with fantasy sports is the huge time-commitment involved –- when you play fantasy, you have to play for the whole season – no breaks, no holidays, no excuses. However, in this era of Facebook and Twitter, people want instant gratification.

This issue is tackled head on by FanDuel.com, a new fantasy sports game which launches today. FanDuel.com lets us play and win in a day instead of waiting the whole season. Players can draft a new team at any time, and pitch it head-to-head against an opponent – a friend, or another FanDuel player – for real money. The player whose team has the most fantasy points at the end of the day’s games wins the cash prize. It’s purely fantasy baseball right now, but the fantasy football game will launch with the start of the football season.

Clever integration with sites like Facebook means that picking opponents is slick, as is bragging about your wins. This is a first for the fantasy sports industry which has been dominated by the big players such as Yahoo, CBS and ESPN for too long.

The game is a competitive draft rather than salary cap – making it much more challenging. However unlike traditional competitive draft both players don’t have to draft at the same time. The way it works is one player drafts their first pick and a back-up for each position. They then order their draft and submit their roster. When they are matched with another user (a friend or another FanDuel user) the system works through each player’s draft in priority order. You get an email telling you and your opponent’s final roster and then you can watch the live stats on both fantasy teams update in real-time as the games progress.

Online social gaming is already well developed but the daily fantasy sports market is quite new. Nigel Eccles, CEO of the company behind FanDuel, admits, “After playing Mafia Wars and other social games on Facebook, going back to playing traditional fantasy sports on CBS felt like going back in time. We felt we could build something faster, more social and exciting.”

Thanks to the fantasy sports carve out of the 2006 Unlawful Internet Gaming Act [Unlawful Internet Gambling Enforcement Act of 2006], FanDuel.com is perfectly legal to play in the US – something that the team behind FanDuel have been very careful to adhere to. FanDuel offers free and paid entry games with users able to enter $5, $10 and $25 competitions.

http://www.fanduel.com/