Previous blog posts by Chris F. Masse:
Robert Scoble interviews their CTO.
Video
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Predictify is not a prediction exchange. We think prediction markets are superior to polls and surveys, don’-t we? 
With Predictify, the mechanism delivering the collective verdict is simplistic: it’-s a poll —-with possibility to get down to each individual answer.
Their conversation is very interesting, nevertheless —-in great part due to Robert Scoble’-s intense curiosity.
Technically, the video is awesome and plays well —-even with my old computer and slow DSL line. Kudos to the Fast Company techies.
UPDATE: I don’-t like that their video starts off automatically, though. With YouTube, we decide to play the video —-it is not imposed on us.
UPDATE: Alas, their embedded video does not go into the blog feed. 
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UPDATE: I e-mailed my remarks to Robert Scoble, and he’-s asked to his techie to look into the issues.
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UPDATE: I see that the video does not start on its own, now. They managed to correct that. Rest the fact that their videos don’-t go into feeds.
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My republishing of the brand-new NewsFutures explainer was the most popular Midas Oracle story this morning.
The sentence in the title was the most talked about. Many Deep Throats offered me their conjectures. Emile is quite a smart man.
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Previous blog posts by Chris F. Masse:
The P.R. industry sucks.
It also true for the field of prediction markets. InTrade-TradeSports and BetFair-TradeFair should embrace open blogging.
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Previous blog posts by Chris F. Masse:
Prediction Market Industry Association’-s goals as stated last year:
1) Create a central, standardized registry of available prediction stocks and contracts from different prediction markets. This open central resource will help demonstrate the wide coverage of available predictions, facilitate search, and make prediction market data more easily available to researchers, the media, and the public at large. Participation will be entirely voluntary, and the program will leave each publisher in complete control of the commercial terms for accessing its data.
2) Offer a directory of its members, a library of core readings, and other such resources enabling newcomers to quickly learn about the field and find their way among the various worldwide offerings.
3) Provide a consensual venue for sharing industry-relevant information and announcements, and organize regular meetings of the industry to discuss common opportunities.
4) Lobby for a clear legal and regulatory environment conducive to the productive adoption of prediction markets by individuals, firms, and governments, and ensuring free access to these markets by traders.
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Reality Check:
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And the PMIA does not get the key individuals: Adam Siegel and Nigel Eccles —-to drop only 2 names.
The Prediction Market Industry Association is an ambulatory joke, so far.
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UPDATE: Deep Throat agrees with me.
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Awesome slides in bold.
Brought to you by Koleman Strumpf (circa November 2007):
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Henry Berg, Microsoft <-slides>-
Discussant: Robin Hanson (George Mason Department of Economics) <-slides>-
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Christina Ann LaComb, GE (The Imagination Market- abstract is free, text is gated) <-slides>-
Discussant: Marco Ottaviani (Kellogg School of Management, Management and Strategy) <-slides>-
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Dawn Keller, Best Buy (Best Buy’s TAGTRADE Market) <-slides>-
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Bo Cowgill, Google (Putting Crowd Wisdom to Work) <-slides>-
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Jim Lavoie, Co-Founder and CEO, Rite-Solutions <-slides>-
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David Perry, Co-Founder and President, Consensus Point <-slides>-
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Mat Fogarty, Founder and CEO, Xpree Inc <-slides>-
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Tom W. Bell, Chapman University School of Law <-slides>-
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Private Prediction Markets and the Law – (PDF file) – by Tom W. Bell – 2008-05-18
Abstract
This paper analyses the legality of private prediction markets under U.S. law, describing both the legal risks they raise and how to manage those risks. As the label “-private”- suggests, such markets offer trading not to the public but rather only to members of a particular firm. The use of private prediction markets has grown in recent years because they can efficiently collect and quantify information that firms find useful in making management decisions. Along with that considerable benefit, however, comes a particularly worrisome cost: the risk that running a private prediction market might violate U.S. state or federal laws. The ends and means of private prediction markets differ materially from those of futures, securities, or gambling markets. Laws written for those latter three institutions nonetheless threaten to limit or even outlaw private prediction markets, as the paper details. The paper also details, however, how certain legal strategies can protect private prediction markets from violating U.S. laws or suffering crushing regulatory burdens. The paper concludes with a legal forecast, describing the likely form of potential CFTC regulations and a strategy designed to ensure the success of private prediction markets under U.S. law.
Conclusion
This paper has described the legal risks facing private prediction markets under U.S. law and how firms that want to runs such markets should respond. To minimize the risk of CFTC regulation, firms should institute mechanisms to ensure that their private prediction markets do not support significant hedging functions and make clear, both in the documentation supporting their markets and in their markets’- structures, that they offer trading not in binary option contracts but rather in conditional negotiable notes. Publicly-traded firms subject to U.S. law can minimize the risks of illegal insider trading by either making public all prices and claims traded on their prediction market or by:
• Keeping trading by traditional insiders separate from trading by others-
• Broadening safeguards against illegal insider trading to cover all traders-
• Treating the market’-s claims and prices as trade secrets- and
• Seeding the market with decoy claims and prices.
Although the skill-based trading emphasized on private prediction markets should in theory remove them from the scope of gambling regulations, a prudent firm could help to ensure that result by:
• Forbidding traders from investing their own funds in the market- and
• Requiring its agents to participate in its market.
As should perhaps go without saying (but as hereby will not), any firm implementing these legal strategies should back them up with ample record-keeping. Each person who trades on a firm’-s market should, for instance, receive clear notification that the market does not deal in CFTC- or SEC-regulated instruments, and that it does not offering services subject to oversight by any state gambling commission. Better yet, traders should be required to access the market only through a click-through agreement in which, among other things, they consent to that stipulation. So go only a few of the provisions that ought to appear in such an agreement- any reasonably competent attorney will think of many worthwhile provisions to add.
Private prediction markets will almost certainly escape the legal uncertainty that now clouds their prospects in the U.S. Even if no legislator, judge, or regulator ever notices them, private prediction markets will come to win de facto legality simply by merit of their widespread use and acceptance. With reflection —perhaps aided by papers such as this one— and practical experience, attorneys will learn how to structure private prediction markets to accommodate the laws that rightfully apply to them and to dodge the effect of laws written for other, materially different markets. There remains some risk, granted, that the CFTC will crush private prediction markets under new regulations. With luck though —and perhaps also with some persuasion— the CFTC will instead allow prediction markets to choose from among several different tiers of regulations. And even in the worse-case scenario, private prediction markets will not disappear- they will simply flee the U.S. for other, freer homes.
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Do the economists like Robin Hanson agree with Tom W. Bell’-s classification?
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Presentation:
Prediction &- Decision Markets – (PPT file) – by Robin Hanson – 2008-04-17
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And, that one, for your curiosity…- really fascinating ( ):
Evolutionary Game Theory of Interstellar Colonization – (PPT file) – by Robin Hanson – 2008-05-26
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Previous blog posts by Chris F. Masse:
Adam Siegel of Inkling Markets:
Mike,
The context of that discussion was talking about allowing people to create their own markets vs. having them only be run by a central entity or only through recommendations by a consulting firm.
We were also talking about the insights you may get by running prediction markets that are not readily apparent in the market results.
The original point was, by allowing people to ask as many questions as possible, the questions may be a signal themselves pointing to something that you didn’t previously know about. If someone asks a question about the probability of a risk factor occurring that you never even considered before, for example. That would never have been uncovered, otherwise, because the “prediction market administrators” wouldn’t even have known to ask.
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