One or two traders were caught out Friday, following a late afternoon surge in the share price of both Sportingbet and PartyGaming. Sportingbet shares were up 15.9% at 43 3/4p whilst PartyGaming climbed 9.5% to 26p.

Two factors may have been responsible for the rise- firstly, the fact that the tiny Caribbean resort may be about to use a World Trade Organization ruling to compel the United States to legalize online gaming- second, a rather spurious belief that the Interactive Media Entertainment &amp- Gaming Association might be successful in its lawsuit against the United States Department of Justice, in which the industry body requests a Temporary Restraining Order against the enforcement of the Unlawful Internet Gambling Enforcement Act.

The chances of either event forcing the US&#8217-s hand, any time soon, are slim- nonetheless these shares feed on rumour and it would be no surprise to see more speculative buying in the weeks ahead.

The Financial Times, meanwhile, has learned that the US proposal in response to the WTO ruling, involves opening opportunities in the storage, warehouse services and technical testing sectors to make up for the gaming restrictions. Gambling groups are believed to be pressing the European Union to reject the offer as inadequate.

Cross-posted from Betting Market by Niall O&#8217-Connor

We try not to post directly about our platform or new clients on Midas Oracle, leaving it up to Chris to highlight the good&#8230- and the bad &#8230- but we thought people might be interested in a new capability we just launched this morning since it&#8217-s actually something everyone can try. You can now go to http://www.inklingmarkets.com and sign up for a free trial of a private, fully-featured marketplace. Just choose a name and URL for your marketplace, fill in your desired username and password, and you&#8217-re off and running. From day 1, when we launched Inkling, we have been big believers in allowing people to try before they buy, and this is the latest extension of that &#8211-hopefully making it even easier to try our platform beyond just being active on our public marketplace. This is something you can securely run inside your organization or publicly. We&#8217-ve also created a new help/reference section you&#8217-ll see as an administrator when you login to your marketplace. There are lots of lessons learned and best practices about managing a marketplace, providing appropriate incentives, creating effective markets, etc. Let us know if you have any questions/feedback or run in to any issues.

Later this week, NewsFutures will have another great opportunity to introduce prediction markets into the consciousness of mighty American businessmen and women.

At the invitation of the organizers of the September 2007 DiamondExchange event, I will take part in a panel discussion on &#8220-technologies to raise your organization&#8217-s IQ&#8221- led by Chunka Mui, author of Unleashing the Killer App. The exclusive event features an outstanding list of speakers including Marvin Zonis, professor emeritus of the University of Chicago, Dan Bricklin, inventor of VisiCalc, Cory Ondrejka, who leads the team developing Second Life, and Ray Kurtzweil, who needs no introduction a all.

The event, titled &#8220-Enterprise 3.0: new representations, new markets&#8221-, is organized by the high-powered consulting firm Diamond (Nasdaq: DTPI). It&#8217-s nice to see that, having preceded the &#8220-Web 2.0&#8243- bubble, prediction markets are already moving past it and being associated with the number 3&#8230-

The event will be held at the famous Greenbrier, in White Sulfur Springs, WV, whose tag line is &#8220-defining luxury since 1778&#8243-! Needless to say, I look forward to this fantastic opportunity to evangelize this particular crowd about the virtues of prediction markets.

&#8211-Emile (for NewsFutures)

[cross-posted from the NewsFutures blog]

I have organized a conference on corporate prediction markets which may be of interest to Midas Oracle readers. It will take place on 1 November at the Kauffman Foundation in Kansas City. All of the details are available on the conference webpage (http://people.ku.edu/~cigar/PMConf_2007/PredictionMarketsConference.html) with some background available on the conference flier (http://people.ku.edu/~cigar/PMConf_2007/PredictionMarketsConference_Flier.html). Note that this is a free conference but you should get in touch with me if you plan on attending.

The preliminary schedule is listed below:

Schedule

8:30 Registration, Coffee, Opening Remarks

9:00 Lessons from Corporate Applications of Prediction Markets

Henry Berg, Microsoft

Discussant: Robin Hanson (George Mason Department of Economics)

Christina Ann LaComb, GE (The Imagination Market- abstract is free, text is gated)

Discussant: Marco Ottaviani (Kellogg School of Management, Management and Strategy)

10:45 Coffee Break

11:00 Lessons from Corporate Applications of Prediction Markets (cont)

Dawn Keller, Best Buy (Best Buy’s TAGTRADE Market)

Discussant: Paul Rhode (Department of Economics. Eller College of Management, University of Arizona)

Bo Cowgill, Google (Putting Crowd Wisdom to Work)

Discussant: Eric Zitzewitz (Dartmouth Department of Economics)

12:30 Lunch

Keynote address: Jim Lavoie, Co-Founder and CEO, Rite-Solutions

1:45 Lessons from Prediction Market Organizers and Operators

John Delaney, Founder and CEO, Intrade

David Perry, Co-Founder and President, Consensus Point

3:00 Break (refreshments)

3:15 The Legal Playing Field

Tom W. Bell, Chapman University School of Law

Discussant: Robert E. Litan (VP Research and Policy at the Kauffman Foundation, Senior Fellow at the Brookings Institution, Director of the AEI-Brookings Joint Center on Regulatory Studies)

4:00 General Discussion

6:30 Dinner

Location TBA

Previous blog posts by Koleman Strumpf:

• Prediction Markets in the Classroom: Inkling Markets
• Slides of presentations from Conference on Corporate Applications of Prediction/Information Markets (1 November), Kansas City
• Summary of Conference on Corporate Applications of Prediction/Information Markets (1 November), Kansas City
• Reminder: Corporate Applications of Prediction Markets Conference (1 November)
• Copernican Principle: How To Predict the End of the World
• Win Justin’s Money? (re: Is there manipulation in the Hillary Clinton Intrade market? Redux.)
• Is there manipulation in the Hillary Clinton Intrade market?

UC Riverside&#8217-s Sloan Center for Internet Retailing has just launched their eLab eXchange, a website for gathering collective predictions about marketing in the digital world. The New York Times had a nice write up about it this morning. I mention this because the eLab eXchange features two NewsFutures knowledge aggregation mechanisms of which there are precious few public examples: Competitive Forecasting and Idea Pageants. So, if you&#8217-re curious about what they look and feel like, just take a look at the eLab eXchange&#8230-

Just like HP did with BRAIN, NewsFutures invented and refined those techniques over the years as simpler/better-fit alternatives to prediction markets for some enterprise problems and contexts. It&#8217-s no secret around here that most people don&#8217-t have an intuitive feel for &#8220-trading&#8221-, and that the busier they are (eg, senior execs), the less time and patience they have to learn anything new&#8230- Nowadays, we find that most companies we work for naturally choose to use one of these alternative mechanisms for gathering the wisdom of their crowd. These approaches fit the customer&#8217-s problem tightly so we don&#8217-t have to fit the customer&#8217-s problem to a generic prediction market approach.

Competitive forecasting is specialized for extracting range forecasts for business variables, like sales, prices, market share, etc, while Idea Pageants are designed especially for the task of quickly identifying the best new ideas in a very large pool. For instance, the NYT article mentions two of NewsFutures other clients: Arcelor Mittal is a long-time user of Competitive Forecasting, while InterContinental Hotels Group relies on an Idea Pageant to vet new ideas.

Importantly, both of these approaches stay true to what NewsFutures believes should be the two pillars of any reality-based knowledge aggregation mechanism: reward people for (a) being right, (b) before others.

We look forward to your questions and comments about these approaches, which you can now get your hands on at UC Riverside&#8217-s eLab eXchange.

[Cross-posted from the NewsFutures blog.]

At Economist&#8217-s View, Mark Thoma draws attention to a recent paper that uses financial markets data to infer a market prediction of the likely effectiveness of the U.S. government&#8217-s &#8216-Surge&#8217- strategy in Iraq.

In &#8220-Is The &#8216-Surge&#8217- Working? Some New Facts&#8220-, MIT&#8217-s Michael Greenstone writes:

This paper shows how data from world financial markets can be used to shed light on the central question of whether the Surge has increased or diminished the prospect of today&#8217-s Iraq surviving into the future. In particular, I examine the price of Iraqi state bonds, which the Iraqi government is currently servicing, on world financial markets. After the Surge, there is a sharp decline in the price of those bonds, relative to alternative bonds. The decline signaled a 40% increase in the market&#8217-s expectation that Iraq will default. This finding suggests that to date the Surge is failing to pave the way toward a stable Iraq and may in fact be undermining it.

(HT to Alex Tabarrok at Marginal Revolution.)

– TradeSports – Partners Program

– InTrade – Partners Program

&#8212-

Both &#8220-Affiliates&#8221- links lead to the same TradeSports page. Why do they insist on this charade? If there is some good reason to pretend that they are two separate and unrelated companies, why do they do such a bad job of hiding all these obvious connections?

Signed: Deep Throat

This is the fifth month the simExchange video game prediction market has traded contracts on console hardware and the second month, the simExchange has traded contracts on 10 software SKUs. Contracts are settled against the NPD Group&#8217-s monthly unit sales data.

Sony&#8217-s PS3 sales came in line with market expectations at 159,000 units. The simExchange market expected 168,000 units to be sold in the month of July. PSP sales were also inline, coming in at 214,000 units, the market expected 209,000 units. Both Nintendo&#8217-s Wii and Microsoft&#8217-s Xbox 360 surprised the market with 425,000 units and 170,000 units sold respectively. The market had only expected 353,000 units for the Wii and 137,000 units for the Xbox 360. Sales of the Nintendo DS disappointed the market, coming in at 405,000 units. The market had expected 473,000 units.

It appears the market was originally correct when it had forecast the Xbox 360 to outsell the PS3 despite the PS3&#8217-s price cut. The market sold off the Xbox 360 July future from the 160,000 units range after believing the leak of the Xbox 360&#8217-s upcoming price cut would deter potential buyers, which in retrospect was an overreaction.

Overall, July software sales came in below the market&#8217-s expectations at $419.2 million. The simExchange had expected sales about 12.8% higher, between $459 – $487 million. It appears traders were generally bullish this month, expecting 16.79% more in total units for all software SKUs tracked in July.

The following tables compare market expectations on the simExchange and actual results as reported by the NPD Group. Expectations by leading analyst Michael Pachter of Wedbush Morgan are also presented for comparison purposes.

* NPD Group sales data
** The simExchange trading data
*** Games Industry, August 20, 2007

How exactly does this work?

Gamers and developers sign up on the simExchange for a free trading account. Using virtual currency called DKP, players buy virtual futures contracts that are under-predicting sales and short sell futures that are over-predicting sales. This concept is widely known as &#8220-the Wisdom of the Crowd&#8221- and this system is known as a &#8220-prediction market.&#8221-

This article was crossposted from the simExchange Official Blog and The simExchange Research.

Intrade (or any prediction exchange wanting to compete), please list global warming contracts!

The information will probably end up saving lives, as we can more efficiently allocate finite resources to global warming research and reduction (vs. preventative healthcare, disease control, micro loans, etc.). For instance, we spend a lot of money on the AIDS pandemic in Africa, but polluted water and malaria each claim more victims. The investment allocations could be tweaked, quite a bit.

In today&#8217-s WSJ, Goddard Institute of Space Studies finds that:

The latest twist in the global warming saga is the revision in data at NASA&#8217-s Goddard Institute for Space Studies, indicating that the warmest year on record for the U.S. was not 1998, but rather 1934 (by 0.02 of a degree Celsius).

Canadian and amateur climate researcher Stephen McIntyre discovered that NASA made a technical error in standardizing the weather air temperature data post-2000. These temperature mistakes were only for the U.S.- their net effect was to lower the average temperature reading from 2000-2006 by 0.15C.

The new data undermine another frightful talking point from environmentalists, which is that six of the 10 hottest years on record have occurred since 1990. Wrong. NASA now says six of the 10 warmest years were in the 1930s and 1940s, and that was before the bulk of industrial CO2 emissions were released into the atmosphere.

Those are the new facts. What&#8217-s hard to know is how much, if any, significance to read into them. NASA officials say the revisions are insignificant and should not be &#8220-used by [global warming] critics to muddy the debate.&#8221- NASA scientist Gavin Schmidt notes that, despite the revisions, the period 2002-2006 is still warmer for the U.S. than 1930-1934, and both periods are slightly cooler than 1998-2002.

Still, environmentalists have been making great hay by claiming that recent years, such as 1998, then 2006, were the &#8220-warmest&#8221- on record. It&#8217-s also not clear that the 0.15 degree temperature revision is as trivial as NASA insists. Total U.S. warming since 1920 has been about 0.21 degrees Celsius. This means that a 0.15 error for recent years is more than two-thirds the observed temperature increase for the period of warming. NASA counters that most of the measured planetary warming in recent decades has occurred outside the U.S. and that the agency&#8217-s recent error would have a tiny impact (1/1000th of a degree) on global warming.

If nothing else, the snafu calls into question how much faith to put in climate change models. In the 1990s, virtually all climate models predicted warming from 2000-2010, but the new data confirm that so far there has been no warming trend in this decade for the U.S. Whoops. These simulation models are the basis for many of the forecasts of catastrophic warming by the end of the century that Al Gore and the media repeat time and again. We may soon be basing multi-trillion dollar policy decisions on computer models whose accuracy we already know to be less than stellar.

What&#8217-s more disturbing is what this incident tells us about the scientific double standard in the global warming debate. If this kind of error were made by climatologists who dare to challenge climate-change orthodoxy, the media and environmentalists would accuse them of manipulating data to distort scientific truth. NASA&#8217-s blunder only became a news story after Internet bloggers played whistleblower by circulating the new data across the Web.

Cross-posted from CavBet

Read the previous blog posts by Caveat Bettor:

• The Democrat SC Showdown: Intrade v. Zogby
• Zogby beats Intrade in predicting Nevada caucus winner Clinton.
• The GOP SC and Dem NV Showdown: Intrade v. Zogby
• Latest Intrade v. Zogby contest is up.
• Who said prediction markets were perfect?
• Intrade markets and Zogby polls agree in New Hampshire
• The Iowa Showdown: Zogby v. Intrade

If you haven&#8217-t seen this take a look: http://conferences.oreillynet.com/pub/w/64/about.html

The relevant bit:

Sample sessions and topics for Money:Tech include:

• Prediction markets work better than that other market
• Prediction markets are finally coming of age, becoming spooking-effective at predicting everything from movements in financial markets to American Idol winners. They are poised to go mainstream, and here&#8217-s how.

In a brief email exchange with Paul Kedrosky, he said that he was struggling to find good content for a session like this.

Any thoughts or suggestions for him?

~alex