At the contrary, mister Kirtland.

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Contra Alex Kirtland, I believe that the development of play-money prediction exchanges using MSR (like HubDub or AskMarkets), which popularity is now proved, is much more important news than stuff about CFTC-regulated, real-money prediction exchanges (like HedgeStreet or the Cantor Exchange), which popularity is uncertain.

Inkling Markets, HubDub and AskMarkets have been techcrunched &#8212-that has not been the case for HedgeStreet or the Cantor Exchange. Practically, that means a great injection of PageRank, hundreds if not thousands of bookmarks, and plenty of new users. That&#8217-s not what I call being &#8220-overshadowed&#8221-.

ProTrade vs. Sports Derivative Exchange

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I asked Chris Hibbert whether they are &#8220-exchanges&#8221-.

Chris Hibbert:

It looks like it from a cursory glance. In both cases, you can buy and sell, and the prices appear to be set by market interactions rather than institutional fiat. They both have a feedback mechanism based on “dividends” produced by on-field performance. ProTrade has a sophisticated formula that takes into account the players’ contribution to a winning season. SDX seems to base their dividends purely on wins and losses. The latter is easier to understand, and probably closer to the way most fans think about things. I think ProTrade is justified in believing they are closer to capturing the individual athlete’s contribution.

There’s also the difference in betting on players or teams. I think both might be helped by offering bets based on both players and teams. But until they cover hockey, I won’t spend a lot of time there. I don’t want to have to start following one of the major sports in order to bet in these play money markets.

ProTrade has a market maker, and SDX uses book orders.

External Links:

– ProTrade

– Sports Derivative Exchange

– Zocalo (the open-source software for enterprise prediction markets, coded by Chris Hibbert)

UPDATE: The SDX co-founder has a comment.