An often-updated blog, with the comments opened, like Bert’s one, would do a better trick, in my view.

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Fabian John (who runs a web forum for the German day-trading community):

Spread Betting/ Spread Trading Companies are regulated by the Financial Services Authority (FSA). (You are using the term “prediction market”, I call it “financial service provider”. This is easier for me to explain how the market works.)

So first, a financial service provider has to be regulated by the domestic regulator. A new EU law (MiFID => http://en.wikipedia.org/wiki/MiFID) allows every [regulated] company doing cross over business to any country within the EU. All they need is the so called “EU passport” and a “Notice to the Regulator” of the target country (for Germany: BaFin www.bafin.de). Once they get the “OK” they can start to sell products to the clients in the target market. They can start marketing campaigns, publishing Ads on- and offline, etc.

For as bookmaker-classified companies, this is not allowed. They can’t do marketing and advertising, except they have a valid license. BetFair doesn’t have an own German license (there are just 4 private) but they cooperate with a company which have one. This is the only way way they can offer bets to German clients. TradeFair binaries, ChoiceOdds etc. are unregulated markets, classified as online gambling. Usually, German traders are NOT allowed to gamble and trade there. ChoiceOdds (www.choiceodds.com) for instance does not accept any German residents.

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Fellas, I’m begging you to change the name of your web forum to “prediction markets” —”les marches de prediction“.

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All markets are somewhat predictive. You don’t define specifically our event derivative markets if you call them “predictive markets”.

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The most liquid of the Jason Ruspini-created contracts:

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I would like to talk a bit about the Internet marketing of these prediction markets, in the rest of this present post.

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As you all know, Jason Ruspini published a blog post on his (semi-abandoned) blog (spot the comments), was interviewed by Bloomberg, and then went to BNN (a Canadian business TV nobody would have ever heard about, otherwise).

In passing, I want to thank Fabian John of Tom Next (a German web forum on financial event derivative trading) for uploading the video to YouTube.

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Spot the referral stats at the bottom of the screen shot below:

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My Internet marketing thoughts:

1. The Club For Growth blog sent about 20% (22 clicks from CFG out of a total of 108) of all people who watched that video —even though the Club For Growth blog is much, much, much more popular than Midas Oracle (which drills a narrow vertical). This is consistent with what Jakob Nielsen has always said, namely that the Internet is in fact a collection of verticals. (See: Diversity is Power for Specialized Sites. “Small websites [like Midas Oracle] get less traffic than big ones, but they can still dominate their niches. For each question users ask, the Web delivers a different set of sites to provide the answers.”)
2. I think that the difference between the total viewership (277 views) and the referral numbers (108 clicks) is due to the fact that most Midas Oracle feed subscribers watched that Jason Ruspini video from within their feed reader (like Google Reader), and never had to “click” on the link to watch the video from within the YouTube page.
3. The above is a very interesting piece of Internet marketing wisdom, which prediction market firms (like InTrade-TradeSports, BetFair-TradeFair, Betdaq, NewsFutures, HSX, etc.) should mind —especially in light of the focus on prediction market journalism I talked you about yesterday

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Funny enough, John Delaney of InTrade stole the YouTube video (uploaded there by Fabian John of Tom Next), erased the mention of my (dirty) name (put up there by Fab who thought I would like this egotistic plug), and re-posted the video on the InTrade section at YouTube.

That Chris Masse-free copy of the Jason Ruspini video hasn’t attracted many eyeballs, as the stats show:

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If you wish, you may watch again the Jason Ruspini video from within your feed reader:

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Tax rate prediction markets – YouTube

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Related: Bloomberg

Previously: Tax Futures, “In Real Life” – by Jason Ruspini

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Dear Midas Oracle readers,

Besides the facts about BetFair Malta’s combo market maker operating on the multiples (which Midas Oracle informed you about back in January 2007), you may have heard the rumor that BetFair UK (in HammerSmith, London) have been hiring what was described as a team of human market makers, whose task would be to operate on the BetFair betting exchange. That rumor has lead some to think that BetFair is sinisterly evil. Here’s what I hold as a truth at this time.

1. Yes, BetFair has been probably hiring people along the first part of the line above —at least in some kind of small ways.
2. No, BetFair has never operated and will never operate on its prediction markets —again, other than on the multiples (which is a very special product, and of little importance in term of revenues).
3. The rumor has been fueled by the fact that some British event derivative traders haven’t fully digested the fact that The Sporting Exchange operates the BetFair prediction exchange in the U.K…. but it also operates many other operations (e.g., a poker game, a casino game, a set of exchange games, a financial prediction exchange, etc.)… and all that in many other jurisdictions —and all this should be understood in the past, present and future tense (to take into account what they are brewing, which we are not yet aware of). The fact that some people were interviewed in HammerSmith for some task over the last summer does not mean that those people are due to perform that task… on the British betting exchange.
4. It would be easy for the BetFair P.R. department to come clean about all that. They would burst that silly rumor in about 2 minutes and 30 seconds. However, if they told the public everything about their present and/or future, non-exchange and/or non-UK operations… by the same token… they would also inform their competitors, which is no good business, as you can fully understand. Which is why the BetFair spin doctors have not answered my question, which was prompted by the conspiracy theorists.
5. Overall, BetFair is a good company —legal and ethical. I like that. Overall, they are good people. I like them.
6. Nevertheless, I have concluded that their market designers are not competent enough, and that their P.R. managers don’t compute the prediction market approach and the Internet marketing approach. I did blog about that in the past, and will do again in the future.
7. Finally, I want to say 2 or 3 words about the status of rumors in the world of digital publishing. As you may know, InTrade-TradeSports and BetFair-TradeFair operate web forums, and do sometimes prune the postings of people critical of them —when they don’t simply close up the forum totally, as it is the case for TradeSports as I’m typing this. On one hand, the democrat (small “D”) in me hates censorship —Voltaire and Benjamin Franklin, be blessed (“I may not agree with what you say, but I will defend to the death your right to say it.“). On the other hand, I have read a lot about the managing of web forums, and all experienced moderators are adamant to say that the trouble makers (or described as such by pushy operators) should be expelled, because a small bunch of them can destroy the spirit of a forum. So, I could partially understand the logic of the exchanges when it comes to expelling critics from forums. That said, Midas Oracle is not a web forum (and is independent from the exchanges); it is a group blog where the comments are open. As such, the blog comments represent published conversations, which means that, on one hand, those conversations should be free and uncensored, but on the other hand, the fact that they are published creates a moral and legal responsibility for the editor and publisher. The difference between a blog (like Midas Oracle) and a forum (like the BetFair forum) is that, in a blog, you have a site lead —(and that’s plural (as in “site leads“), when it’s a group blog). In a blog, the site lead(s) is/are always at the origin of any thread (called a “post”), can moderate the comments, and can publish another post highlighting or correcting something that was said in the recent past in the comments. Plus, keep in mind that, in a blog, the readership of the posts is something like 50 times bigger than the readership of the comments (both on the Web and in feed readers).
8. On Midas Oracle, there’s total freedom of speech (as long as there is no insult and defamation), but there’s also the site lead’s duty to pop up and rectify any rumor that would have spread on the blog comments. Which I did in this present post, in an intentionally fuzzy way, for reasons stated above. We are going to continue mixing the total freedom of speech with the respect due to the truth, here. Help me doing that. Thanks. … And, of course, pro-BetFair and anti-BetFair comments are open on this post, just below.

Tax rate prediction markets – YouTube

Related: Bloomberg

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Jason,

You’re almost perfect. One thing that intrigues me is that you’re pretty bullish on those prediction markets. How come you’re so bold, young man?