Did Patri Friedman misread BetFair?

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About the latest New York Times story on BetFair fighting sports corruption&#8230-

Patri Friedman:

Prediction markets not only make fixing easier to profit from, by creating a liquid market for insider betting, but they also make it easier to detect, by creating a centralized database of betting for analysis: […]

So. the effects are mixed, and in the end we are left with the Homer Simpson-esque paradox that prediction markets are both the cause of, and the solution to, insider trading.

Hell, no.

My remarks about his 2 statements:

#2. Sports betting (thru bookmakers and sportsbooks) existed well before the apparition of the prediction exchanges (betting exchanges) &#8212-BetFair was created in 1999 and was launched in 2000, and TradeSports, in 2002.

#1. More money is bet on sports with bookmakers than with prediction exchanges (betting exchanges).

  1. Match fixing existed before betting.
  2. Profiting from match fixing existed before BetFair and TradeSports.
  3. BetFair is the only betting company in the world that has systematized a cooperation program with sports bodies in order to detect and fight sports corruption.

22 thoughts on “Did Patri Friedman misread BetFair?

  1. Medemi said:

    Where the hell did that come from, Chris ? Didn’t you read the New York Times article when you posted this ? The article (and Wolfers) outlined the risks to society as well as betfair pretty well IMO.

    If we apply only 30% of the restrictive policy that bookies impose on their customers, to betting exchange customers, we would be able to get rid of almost all insider trading AND keep at least 99% of all exchange customers happy.

    Problem is, betfair are unable to self-regulate on this one because it would give the competitors an edge. It’s a dilemma, and you’re not going to believe this, but to deal with the insider problem effectively betfair need to lobby the Gambling Commission to impose a restrictive policy on all betting exchange activity.

    It’s not going to happen, and most people will probably laugh at my suggestion.

    That’s fine… meanwhile I’ll just keep watching how betfair pull the rope around their neck tighter and tighter. 

  2. Chris F. Masse said:

    @Medemi: Could you line up the facts about “the restrictive policy that bookies impose on their customers”, please?

    Is the bookies’ policy justified by the fact that the bookies make the odds and are the counterparts? Exchanges are different. They don’t have any stake.

  3. Medemi said:

    You’re asking the right question Chris.

    I can’t present you with facts, neither do I have any experience with traditional bookmakers myself. I do not live in the UK. But I have read at least two dozen stories from people who hang out at the exchanges. Basically traditional bookmakers close or restrict winning accounts, and I would be very surprised to see them accept a 100K bet from someone who just opened an account with them.

    Not only are they effectively keeping away the insiders IMO, they are also keeping away the shrewd punters who can make money in a legitimate way. I’ve met some of them on the betfair forum and they are not happy about it. They are not happy about the insiders gathering at the exchanges either, to say the least…. Personally I believe that traditional bookmakers don’t have a viable business, and it’s unethical to allow people to lose millions (amongst them high-rolling gambling addics) yet close or restrict any account exceeding 5k or so in profits.

    It’s not my case to make though and I was hoping some others could do that, people (like) who go by the name of “The Magician” and “Feck N. Eejit” on the betfair forum. People (succesful punters) who have been around half a life time. People, like Ed Murray perhaps, who are hit hardest by insider activity.

  4. Ed Murray said:

    Chris – bookmakers restrict winning accounts heavily, to a small percentage of the stake they ask for most of the time, and then they move the price they offer.  They also don’t go out of line with the free market price available on the exchanges, unless they have a brilliant trader, which 99 times out of 100, they won’t have.

    Paradoxically though, bookmakers will keep open corrupt/insider accounts.  If someone from a stable/connection comes on, they will offer that person a small to medium bet on that selection, and then move their prices heavily, to attract money from punters on to the other selections, ending up with a more profitable position overall as a result of letting the corrupt account win free money. 

    Traditional bookmakers restrict people who use skill or judgement.  They cannot afford to hire the best traders in each field, and there is always someone out there with a view/an edge who can beat their traders.  William Hill in the UK will not let me wager one penny on anything, whereas most other bookmakers have limited me to about ?50maximum if that.  -The result of this is that it is very difficult to get large bets on with traditional bookmakers, unless they have you marked up as a “mug”.  If you are losing ?100,000 on your account, they will let you stick ?10,000 on most things.  Any brand new accounts looking to bet ?10,000 will not be allowed to bet, as the traders for those bookmakers will assume it is a “beard” account, i.e. someone who has previously been restricted.  It is uncanny how many of these accounts are in female names ;-)

    The difference with exchanges is that whereas a bookmaker will turn down a brand new account trying to wager large money on a selection, exchanges let you open an account and bet straight into the pool.  With the current status quo, as you have seen yourself, Betfair policy is to pay these markets out straight away, so if you lost to someone that was (for arguments sake) a match fixer, the money would be taken out of your account straight away.  That money may be frozen (BF won’t tell you what is going on with their current investigations), and may not be paid out to the winning ’suspicious’ account (or it may well be paid straight out, I have no idea either way), but either way if you take a juicy value price on a selection, as BF have confirmed to Midas Oracle, the market is settled immediately (that piece that BF sent to you about how it would be wrong to disadvantage customers who had bet fairly on the market to not get their winnings etcetera immediately).  -Exchanges need a completely different type of protection to bookmakers to keep out corruption.  Whether that is in place currently or not, I make no comment.

  5. Ed Murray said:

    “#1. More money is bet on sports with bookmakers than with prediction exchanges (betting exchanges).”-

    I spoke with one trader at one (unnamed) major firm after a fairly recent late night Maria Sharapova match.  The volume wagered on Betfair was over ?1 million on that match.  He set the prices and took bets for that firm, and the total amount in bets taken was about ?1,500.  

    Bookmakers won’t let shrewd money bet agains their traders, they change the price, they often cherry pick (wait for the next point to be played, and then only accept that bet if it has gone against the customer), and they restrict winning accounts heavily.

    Because they are interested in only taking mug money, it tends to be small amounts wagered, as being a mug gambler is an expensive habit to maintain, whereas someone shrewd, with a growing betting bank, will have no fear in coming back time and again to hammer that bookmaking trader, if the bookie doesn’t restrict him.

  6. Ed Murray said:

    Prediction markets not only make fixing easier to profit from, by creating a liquid market for insider betting, but they also make it easier to detect, by creating a centralized database of betting for analysis: […]

    So. the effects are mixed, and in the end we are left with the Homer Simpson-esque paradox that prediction markets are both the cause of, and the solution to, insider trading.–

    Actually the author of that comment has got it pretty much spot on.  The only change I would make to it is that exchanges make it easier to profit from match fixing IN SIZE , but they do in theory make it much easier to see afterwards who was betting on what.  This holds true as long as any account which is say genuinely “suspicious” has no ability to hide their identity  by betting through anonymous accounts from jurisdictions where the bettor cannot be extradited from.  Again, I make no comment if this is or isn’t happening, the only comment I make is on where the loophole is in the original statement.

  7. Ed Murray said:

    Is the bookies’ policy justified by the fact that the bookies make the odds and are the counterparts? Exchanges are different. They don’t have any stake.–

    Bookmakers want to make money, and they do that by winning money from their customers.  They wont’ let a brand new account bet say ?100,000 on a tiny near-irrelevant match from say Chile, whereas if you can find someone to bet against on an exchange, you can wager ?100,000 or more on someone to lose a tennis match.  In this case the exchange would take 5% commission, and the match fixer – if it was a fixed match – would take the other ?95,000 in profit, from their ?100,000 bet at say, evens.

    There is no way you could get a ?100,000 bet on with a traditional bookmaker, unless you are in a very elite band of ultra-mugs, that the bookmaker will take any bet on anything, in as much size as you like, from you.  These people are ultra-rich, and are haemorrhaging cash, and are like gold dust to any traditional bookmaker.

  8. Medemi said:

    Thanks Ed, I think we get the picture. :-)

  9. Medemi said:

    Exchanges need a completely different type of protection to bookmakers to keep out corruption.

    Ed, why is that ? Restricting a fresh account’s first bet to say a max profit of 1K makes perfect sense to me. Take it gradually from there.Insiders (specifically non-recurring ones) are not going to risk getting caught over a meager 1K, even 10K. I’m not talking about horse racing here, which is screwed up anyway.

    Not offering certain markets (your suggestion in dealing with insider activity) does not seem like the way forward to me. First of all, you are going to have to anticipate where the insiders will be coming from. It’s like the police are chasing car thieves. When the thieves are smart enough (organised crime) the police will be looking in the wrong place most of the time. Also, restricting certain markets (that would make perfect sense in the absence of insiders) should be the last thing we want, only if we’re really desperate. Free markets and all that. 

  10. Adonis said:

    Observation, IMHO:Clients of an Exchange see the Exchange as a “referee” who ensures fair play and that the “purse” from their person-to-person betting is given to the winner – provided that the winning is done fairly.Some Exchanges (actually admitted by Betfair, publicly) see themselves differently to that Customer perception: they feel that they are BOOKMAKERS and able to “take a profit”, at will, from their Customer’s betting activities (example, the natural inefficiencies of an emergent bid/offer P2P market) with impunity. Whilst they may take “certain steps” to allegedly protect their Customers from fraud ( example, those who have prior knowledge of a result, whilst betting is still possible) those steps are entirely at the “discretion” (aka amongst Customers as caveat emptor) of the Exchange and Customers feel (IMHO) from experience that, more often than not, fraudsters will get paid out, with questions about their activity being asked AFTER the “horse has bolted”. …….And, of course, AFTER the Exchange has collected its commission.Evidence supporting these and similar opinions?

    Can any single Exchange Customer come forward and confirm that they have been paid out compensatory funds, which were WITHHELD from an attempted fraudster? There are PLENTY of (well publicised) examples where evidence of likely fraud was given to the racing authorities, even sometimes in ADVANCE of the race itself!

    I’d like to know how often (if at all) the Exchange felt so concerned – on behalf of its Customers, who were in imminent, and obvious danger of being shafted – that it froze all bets until fraudulent betting patterns could be examined. Say 5 days.

    I’ve bet with Exchanges (yes, PLURAL!) since their inception here in the UK. I’ve NEVER been given a penny compensation from frauds that were detected, monoitored and STOPPED. I have had bets lose in races where Betfair have stated in Court, afterwards, that they discussed suspicious betting patterns before the Race started. If money weasn’t paid out to the fraudsters, WHERE DID IT GO?????NOT ONCE have I received a phone call warning me to stay clear of a suspect Race ( Betfair and other Exchanges know how to contact me if they need to – they won’t let you bet at all unless they have your phone number, passport number, bank account details and the security code off the back of your credit/debit cards!)

    There again…….. I’m merely a Customer.

  11. Adonis said:

    I should point out that I have no convinctions for fraud ( or any other criminal offence for that matter!), and I give categoric assurance that I have never attempted to place a bet with Prior Knowledge of the Result. For my sins, I have consistently attempted to draw general attention to important issues regarding Betting Integrity. In return, no fellow Punter has imposed (or been able to) any limitations on my Freedom of Speech and thus my ability to continue to publicise such issues. But, very obviously, someone, or some body, wants me silenced!It would be interesting, in due course, to determine WHICH body or bodies have sought to silence my publications on such Public Interest topics. All will undoubtedly become clear in Time……I have little doubt that there are plenty of people scattered here and there who have been approached directly or indirectly to silence me. I understand their personal fears – which may well turn out to be fully justified.

    It is my opinion that any people or organisations that attempt to silence Free Speech are likely to be guilty of MUCH more serious things. History is littered with many examples. Almost universally too, those who tried to expose them at the time, were publicly castigated, censored, derided, punished and even killed. The “silent majority” were just that: either couldn’t be bothered or were quite content to turn a blind eye, provided that their own ambitions were left unaffected.

    You don’t know what you’ve got ’til it’s gone,

    Paint Paradise, put up a parking lot.


  12. Adonis said:

    Apologies to Joni Mitchell for twisting the words a bit…

  13. Ed Murray said:

    “Ed, why is that ? Restricting a fresh account’s first bet to say a max profit of 1K makes perfect sense to me. Take it gradually from there.Insiders (specifically non-recurring ones) are not going to risk getting caught over a meager 1K, even 10K. I’m not talking about horse racing here, which is screwed up anyway.”-Medemi, I agree 100% with this, and would take it a step further.  I think people should earn the right to bet.  What has happened the last few years is that BF make commission whoever wins, so there has been next to no restriction on the size of bet a new account can place.  There is a restriction once you hit 3% commission I believe, where you have to provide details of who you are, your passport/ID etcetera through the KYC process, but an initial bet on a brand new account can lump on in a size that no bookmaker would ever allow on a brand new account against their own traders.  -I think people should earn the right to bet, and ringfencing the market/pool against people looking to bet say ?100,000 or more on a tennis or snooker player to lose, has to be a good thing.  There is a risk you anoy some high rollers, but I think the benefits from keeping the max stake of new accounts right down, outweigh the costs of doing so.  -I would go one step further as well.  I put forward to BF’s head lawyer that in some cases bets should be void.  I’ll give two examples, last year’s Hells Kitchen market was evens the pair with I think about 45 minutes to go, but someone came on and crashed it to 1.15 on Barry McGuigan, and 8.0 on his opponent.  No surprise Barry McGuigan won. I think the person who came on and crashed the price should have those bets voided, if they are say an almost brand new account, betting in a size disproportionate to the overall turnover on their account.  It is a manual, human, judgement call, and I was greeted with laughter bordering on the raucous – what I was putting forward was unheard of in the exchange industry, and clearly a legal minefield.  However, a few months later, the unthinkable proposal which I put forward, was put in place on Arguello v Davydenko :-) .  It was the right thing to do (and it cost me about ?900ish).  -Betfair should try to act as Robin Hood, if someone comes on with a few minutes to go and `crashes a market, who isn’t a regular bettor, void the bets, and refund the winnings from those bets to normal BF users.  It would be massive good publicity for BF, and the right thing to do.  What better PR could there be than “hi everyone, BF here, we were a bit disappointed that a brand new acct came on and smashed everything, and we don’t think those bets were placed in good faith, so we’re voiding that accounts bet, and returning the money to our loyal customers, who we feel had been ripped off”.  That would be cracking.  Same with the Big Brother 8 market, Brian was about 8.0 for most of the final day, but crashed in the last hour with someone sticking up ?50,000 at 2.3.   Whoever was behind the crash should have those bets voided.  –Not offering certain markets (your suggestion in dealing with insider activity) does not seem like the way forward to me. First of all, you are going to have to anticipate where the insiders will be coming from. It’s like the police are chasing car thieves. When the thieves are smart enough (organised crime) the police will be looking in the wrong place most of the time. Also, restricting certain markets (that would make perfect sense in the absence of insiders) should be the last thing we want, only if we’re really desperate. Free markets and all that. -I don’t agree, because I think certain players had exponential growth in the suspiciousness of their matches.  If one player is involved in a ’suspicious match’, there is no need to put up markets the following day featuring the same player.   Arguello v Davydenko showed suspicious betting patterns, but so did Arguello’s match in the next round.  The fact is, Arguello’s next match should not have been offered.  Same with Hernandez v Brezezicki, why was Hernandez’s next matches offered straight away?  Paying out the markets immediately, and putting up the same player in the next round, just seems like a bad idea.  The markets need to be independent of the actual result.  Its not a free market where there is a huge financial incentive to participants to manipulate it. 

  14. Medemi said:

    Medemi, I agree 100% with this

    Why didn’t you say so before Ed ? If you think it’s the right solution, and I do, and some others who have pointed in that direction before (like The Magician),and you add all that experience and insight together, then we must be close to a real and effective measure against insider trading.

    What I like most, is that we’re slowly but surely becoming their worst enemy. I hate the bastards, because they leave behind a path of destruction, there’s no other way to see it.

    I don’t know if we can count on betfair, I don’t trust them. Either way, it should be the Gambling Commission taking responsibility and cover all exchanges at once.

    Adonis, what you’re pointing out is another nasty side-effect of insider trading. How to get the money back to the people whom it belongs to… And one of many reasons why we need preventive measures.

    True, high-rolling gamblers could be frustrated by this, but there’s a positive side as well – you should take it easy when you’re new to betting.

    Should I now try and explain how this implementation could be great news for betfair PR-wise ? Nah, Fk ‘em. Let them complain how the media is treating them like a dog just a little longer.

    Maybe more later. :-)

  15. Ed Murray said:

    I think “hate” is far too strong a word medemi.  I have come face to face with them, and put many of my ideas forward, most of which have been adopted, though also mostly after having to fight fiercely for them. 

    I think they genuinely believe they are doing the right thing most of the time, but BF have unfortunately found themselves in a near-unique position, where they have a large number of very highly intelligent users, who can often spot improvements a mile off.  The rewards for being a BF member of staff are miniscule, in comparison to the millions of pounds that a tiny minority have made from the exchanges/betting markets. 

    Their IT is brilliant, and I am surprised to read that Rory Devine has left BF.  He did a superb job. 

  16. Medemi said:

    ok Ed, maybe “hate” is the wrong word as that involves a lot of emotion.I don’t think I hate anyone anymore.I despise insiders. I have more respect for a flea.

  17. Ed Murray said:

    Apparently there is someone new at BF (Ryan something, Marks?), who is giving sugary tours around Hammersmith, with the emphasis on the BF audit trail as a key weapon against corruption etcetera.

    What is clear is that there are positives and negatives stemming from the growth of betting exchanges.  The audit trail is definitely a positive (as long as it identifies people in territories where they can be extradited, and where indeed a genuine identifiable account name is used, which it has been alleged was not the case on some of the Davydenko v Arguello bets), but there is no emphasis to journalists that whilst bookmakers would never permit sizeable bets from brand new accounts, there are almost zero restrictions on new accounts on the current betting exchanges.  It isn’t a Betfair issue, its a cross-exchange issue (you can feed in bets on another exchange, say Betdaq at under or over the current price on Betfair, and arbers/arb robots will step in and help you to get on, bypassing Betfair’s own security checks, as all the money from the arbers will be from genuine accounts).  In that scenario all the money would appear to be clean on the BF market, yet the existence of that market provided the incentive for a match to be thrown, without a single corrupt penny or cent being wagered on Betfair.  (clever hey :-) ).   Its a potential form of laundering, and the answer to that one is cross-exchange co-operation between Betdaq/Betfair and other exchanges.  I have no reason whatsoever to believe that cross-laundering has taken place, but as the markets grow, and the incentive is there, then feeding corrupt money into a non-BF market to take advantage of arb bots with the BF market, is a potential danger to sporting integrity.

    Two BF tennis markets this year have shown “suspicious” price movements, Hernandez v Brezezicki 15th April 2008, and Teimuraz Gabashvili v Blaz Kavcic 20th May 2008. The anger on the BF forum from many threads is clear to see about the Gabashvili match from this thread “BETFAIR VOID GABASHVILY MATCH!”


    What is clear is that Ryan Marks (?) is giving the same impression to journalists as Mark Davies gave in New Zealand, that the forum is a valuable tool which they consult to help them make decisions.  I think over 95% of regular tennis bettors probably disagree with current BF policy on fixed matches, so I find it an odd claim that they make. 

    If say Obama and Hillary Clinton were again the two contenders for the Democratic nomination in 4 years time (for arguments sake), and Hillary was smashing Obama, winning every primary by a convincing margin, you would expect the prediction markets to show a heavy wall of money backing Hillary at ever shorter odds/probabilities.  But imagine a scenario where Hillary was winning primary after primary, thumping Obama, but there was an ever larger and growing, heavy wall of money backing Obama for the nomination.  It would look crazy, and stupid, he loses every primary, but his odds of winning are getting shorter.  Someone is gambling mega money on Obama getting the nomination despite every primary going against him.  Then after four or five months of campaigning, Hillary suddenly withdraws from the race, and pledges her support to Obama.  The seemingly suicidally stupid money now looks very different, it looks like someone knew that Hillary was going to withdraw her candidacy AND pledge support to Obama.  Its not impossible that it was all entirely innocent and a huge coincidence, but serious money had been gambled at ridiculous prices, betting on Obama to get the nomination, and the serious money had won.  Would there be a serious “stink” about the whole thing?  Would the prediction markets have served a valuable purpose, in identifying months beforehand that there was something wrong with Hillary, and that she would never actually take the Democratic nomination in 2012?  Would the people who had bet in good faith have any right to feel like something had gone wrong?

    Betting exchange prediction markets enable people to bet huge sums of money, as long as they can find a market with enough liquidity to bet into.  Many bets that bookmakers would never take in size, can be lumped on in super size. 

    Imagine that there was a market like this 2012 Obama v Clinton every single week?  It could be hypothesised that the existence of the market itself could lead a candidate/participant to behave in a morally hazardous way.

    The problem with betting exchanges at the mo, is that if someone say wagered on Hillary Clinton 2012 on a market like this, and took the seemingly generous price on the massive front runner to win the nomination, they would lose their money.  The Gunn-Rees report on tennis identified 45 suspect matches (which may be higher or lower than the real figure), but the fact is only one of these matches, Davydenko v Arguello, saw the money from people who had bet in good faith returned to them.  In all the other matches, money was either paid into the suspicious accounts, or frozen for a period of time unknown pending an inquiry.  Everyone who bet in good faith on those 45 matches, if say they were all actually fixes, lost on 44 of them.   I think there is a very realistic probability that the new internet betting environment, with the exchange model taking up some of the marketplace, rather than the dominance of the bookmaking model (bookmakers own money at stake), incentivizes morally hazardous alteration of the outcome of prediction markets. 

    There would surely be an outcry if Obama won the 2012 nomination against Hillary despite losing every primary for months, but the prediction markets had correctly predicted that he would win the race.  The problem with tennis on Betfair, is that the prediction markets on Hernandez v Brezezicki and Gabashvili v Kavcic both showed a wall of money backing the “wrong” player, and both matches had seemingly the inspired money turning out to be right.  I can see why Betfair take the money out of people’s accounts who have lost on the market (and say they freeze payment to the winners), but the fact is many people are taking the prices believing they are betting fairly, whereas the ‘inspired’ money smashing into the wrong selection has turned out to be right. 

    I think Gabashvili was 1.75ish at the start of match, and after going A SET UP and at 3-3 in the 3rd set, he had drifted to 3.5!!!! How can a player at the start of the match be a 57% chance to win, whereas when he is a set up and on serve in the 2nd set, he has become a 28% chance to win.

    My answer to this is a limit on the stake size of new accounts – run a calculation where the maximum stake size is only permitted to be say 5% of the total lifetime wagers on that account, starting off at a maximum of ?1000, plus a “red card” for 12 months for any player involved in any suspicious match.  Its not a legal requirement to offer every single player, plus the Gunn-Rees report identified that in their view certain tennis players just aren’t trustworthy.  This would have stopped Davydenko v Arguello from ever happening, as both had been in suspicious matches leading up to their, erm, clash.

    What is encouraging though is that from what I understand, people given the sugary “audit trail” stuff from BF are beginning to question what the flip side to that coin is :-) , and I don’t think that BF can expect the journalistic world to stay as novices on the field of understanding the full picture.  I have no doubt that in 10 years time, there will be a limit on the size new accounts are allowed to wager in on prediction markets – there is no question that will be introduced.  The question is how long will it take to persuade/force the current BF team to introduce it.  Hopefully it will be within the next few months.  

  18. Ed Murray said:

    I would like to ask the U.S. contributors to Midas Oracle what they would make of a prediction market for the 2012 Democratic nomination where one contender was backed heavily, at any price, despite losing every single primary heavily for months. 

    The Democratic nomination is only a once every four years event, but similar things to this happen regularly on tennis markets in the last 12 months. 

    The questions are

    (1) What if Hillary Clinton herself wagered millions of dollars that she would not be the next Democratic candidate?

    (2) What if someone had the power to knock Hillary Clinton out of the race somehow had wagered millions on her not being the 2012 candidate?  An example where this could happen would be the tournament where a spectator knifed Monica Seles during that tennis match in the early 90s.  She would then not be able to win that tournament, but what if there is a financial incentive for people to injure participants, like with Seles?  Or if someone assassinated Clinton? Should that market be paid out?

    (3) Should people be able to bet in near unlimited size on prediction markets, who weren’t regular bettors/traders?  If it is a brand new account waging a quarter of a million dollars on a tennis player to lose, should that account have been restricted before placing that bet?

    (4) Should there be circumstances where a multi-million pound gamble is paid out on Obama 2012, if over a period of a number of months, someone had backed him heavily to win the nomination, even though he was losing every single primary?

    (5) If someone knifed Maria Sharapova, as happened with Monica Seles, you could make the argument that bets on that tournament should be void, if the knifeman has bet heavily on Sharapova not to win it, and because of her being knifed, she then doesn’t make the final and win. However, you could then reach a situation where someone injures a player deliberately, expecting that a prediction market would be voided, which they could also benefit from financially. A situation like this occurred in England in the seasons 1995/1996 and 1996/1997, where floodlights at soccer games were deliberately sabotaged, forcing abandonment of the matches concerned, as a result of the saboteurs not liking the half time scoreline. There is an incentive for someone to bet heavily against a Seles or a Sharapova, and then seriously wound or assault them to alter the outcome of a sports prediction market, but there is also an incentive to try to get a prediction market voided. The knifeman benefits from ensuring that Sharapova or Seles cannot win the tournament, but the saboteur benefits from the market being voided. The answer to the first one is probably to void the market due to foul play, removing the financial incentive to knife a female tennis player, but the chance to get a void market will provide a financial incentive to try to get the event abandoned,………. how should the arbiters of a prediction market put the right safeguards in place to remove financial moral hazard from the market?

  19. He asks questions; you'll provide answers. | Midas Oracle .ORG said:

    […] Answer these questions below this present post or here. […]

  20. Ed Murray said:

    Chris – I don’t know how to start a fresh thread or post on MO, so I’m adding this post to the thread in the hope you will delete it, and put up a fresh thread about this.

    I saws a documentary on BBC this week about Hansie Cronje, which I found desperately sad, and highlights what happens when the worlds of bookmaking and sport cross over unregulated.  Its compelling viewing.


    I think that link is only available to people in the UK (sorry), but if anyone can watch it, its a must see.


  21. New discussion thread about the BBC documentary about sports betting… | Midas Oracle .ORG said:

    […] At Ed’s request… […]

  22. Chris F. Masse said:

    @Ed Murray: “fresh thread”

    In a blog, that’s one of the posters that can start a new thread.


    So, go there to discuss with the other commenters.

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