Tag Archives: event derivatives

I told you that vice presidential search committees and VP prediction markets are complete bullshit, didnt I?

Posted on by
10

No Gravatar

The McLaughlin Group of mid-June (yes, I know, that&#8217-s last month):

MS. BERNARD: Well, here&#8217-s what I think. I think the dirty little secret is Barack Obama probably already knows who he&#8217-s going to select to be his vice presidential running mate. You put out the search committee, probably because Hillary Clinton was all over his back last week &#8211-

DR. MCLAUGHLIN: So this is a smokescreen. This is a smokescreen.

MS. BERNARD: I don&#8217-t know if it&#8217-s a smokescreen, but I think he has a good idea who his vice presidential running mate is going to be. And the search committee is much ado about nothing.

–

I told you so.

No good advanced, primary indicators.

Don&#8217-t trade on VP prediction markets.

–

InTrades market data shows that the sliding Dow Jones Industrial Average has an exceptionally strong negative correlation (approx. -0.91 over the last 10 weeks) with the rise in the InTrade Market for Barack Obama to be the next US President.

Posted on by
5

No Gravatar

–

UPDATE: Some smart comments, just below&#8230-

–

Yet another prediction market newbie who should be meeting with Robin Hanson one on one to get a little injection about conditional prediction markets and how they could be useful for BOTH private decision makers AND public policy makers.

Posted on by
2

No Gravatar

Lewis Sheperd (the Chief Technology Officer of Microsoft’s Institute for Advanced Technology in Governments):

Indeed, it appears to me that [prediction markets] are growing not from corporate or government use, but mostly organically from within academia, stock-futures circles and political-junkie communities. I&#8217-m reading the interesting variety of writers and prediction-marketeers at Midas Oracle, which brings together widely ranging posts from faculty members at Harvard and other universities, daytraders, and even a few “amateurs.”

–

Lewis Sheperd notes in his post that a number of for-profit companies (like Google and General Electric) are using private prediction markets (a.k.a. enterprise prediction markets). Non-for-profit organizations (like governmental agencies) would do great, too, using the same forecasting tool &#8212-an &#8220-information aggregation mechanism&#8221- (IAM), more exactly.

Robin Hanson, instead of boring us with philosophy, go evangelizing that newbie.

–

UPDATE: Yes, he is willing to learn. :-D See his comment.

–

US ELECTORAL MAP: Prediction Markets for the 2008 Electoral College

Posted on by
1

No Gravatar

ELECTORAL COLLEGE MARKETS: Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade Ireland &#8212-(electoralmarkets.com).

By Lance Fortnow, David Pennock, and Yiling Chen. :-D

–

–

For more on probabilistic predictions, go to our &#8220-Predictions&#8221- page, or visit the prediction exchanges.

Alternatively, if you want an electoral map made of polls, go to electoral-vote.com.

–

Chris Masses first comment to the CFTC on event markets (prediction markets)

Posted on by
Reply

No Gravatar

Chris F. Masse
Midas Oracle
cfm &#8212-&#8211- midasoracle &#8212-&#8211- com
chrisfmasse &#8212-&#8211- gmail &#8212-&#8211- com

July 6th, 2008

Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st St. NW
Washington D.C. 20581

Attention:
Office of the Secretariat- [email protected]

Reference:
Concept Release on the Appropriate Regulatory Treatment of Event Contracts
73 FR 25669

–

My name is Chris F. Masse, and I&#8217-m the publisher of CFM (a vertical portal to prediction markets, which is the only one I know of that lists extensively the URLs of all the world&#8217-s play-money and real-money prediction exchanges)

http://www.chrisfmasse.com/

and Midas Oracle (a group blog on prediction markets, which is the most popular resource on this topic).

http://www.midasoracle.org/

I&#8217-ve been covering the prediction market industry since 2003 (when the brouhaha caused by the Policy Analysis Market attracted the attention of many). I would like to give my input to the CFTC on the subject of real-money prediction exchanges.

First of all, let me say that I welcomed:

#1. The CFTC&#8217-s decision to investigate and approve HedgeStreet&#8217-s application as a DCM in 2003 and 2004 (in spite of the opposition of the Chicago Mercantile Exchange)-

http://www.hedgestreet.com/abouthedgestreet/pressreleases/pressrelease_1.html
http://www.hedgestreet.com/faq/
http://www.financial-spread-betting.com/hedgestreet-application.pdf
http://www.cftc.gov/files/submissions/comments/comdcm038cme.pdf

#2. The CFTC&#8217-s decision to publish a concept release on &#8220-event markets&#8221- in May 2008 (73 FR 25669).

http://www.cftc.gov/lawandregulation/federalregister/proposedrules/2008/e8-9981.html

Just a technical note, before I give you my thoughts. In the following, I call &#8220-prediction market&#8221- the specific market where one particular event derivative is traded. (For instance, the &#8220-Barack Obama will be elected US President in November 2008&#8243- prediction market.) And I call &#8220-prediction exchange&#8221- the general marketplace where many prediction markets (on political elections and other events) are traded. (Hence, I call HedgeStreet a &#8220-prediction exchange&#8221-).

Please, allow me to give you my thoughts on the subject of real-money prediction exchanges:

–

ABOUT DISPERSED INFORMATION PRICED IN EVENT DERIVATIVE MARKETS, EXCLUDED COMMODITIES, DCMs, AND EXTENDING THE COMMENTING PERIOD ON THE CFTC&#8217-s CONCEPT RELEASE ON &#8220-EVENT MARKETS&#8221-.

–

#1. I fully agree with the point #2 made by professor Vernon Smith in his comment (CL01) to the CFTC.

http://www.cftc.gov/stellent/groups/public/@lrfederalregister/documents/frcomment/08-004c001.pdf

The information aggregation mechanism that constitutes the essence of each prediction market (for instance, the &#8220-Barack Obama will be elected US President in November 2008&#8243- prediction market), and the objective probabilistic predictions generated by all these information aggregation mechanisms, are of high social utility.

–

#2. I fully agree with HedgeStreet in their comment to the CFTC (CL12) that political elections qualify as &#8220-excluded commodities&#8221-.

http://www.cftc.gov/stellent/groups/public/@lrfederalregister/documents/frcomment/08-004c012.pdf

The point made by HedgeStreet about economic consequences, risk management and hedging is extremely important with regards to:
– the future revenues of the for-profit, commercial companies who would be operating the real-money prediction exchanges on political elections (since hedging-oriented derivative markets experience much more volumes than speculative-only betting markets)-
– the financial innovations, which would be created by this process, and whose benefits will, on the long term, spread throughout society (just like what has happened with the traditional derivatives).

However, I notice that HedgeStreet does not state specifically whether the topics other than political elections (mentioned in the CFTC&#8217-s concept release on &#8220-event markets&#8221-) qualify, too, as &#8220-excluded commodities&#8221-.

This issue is the cornerstone of the discussion on &#8220-event markets&#8221-. In the concept release, the CFTC mention many other prediction markets than those about political elections. I saw only one comment (from Jason Ruspini, CL11) that elaborates in detail about non-political &#8220-event markets&#8221- &#8212-as of Sunday, Juy 6th, 2008, one day before the deadline for the commenting period.

http://www.cftc.gov/stellent/groups/public/@lrfederalregister/documents/frcomment/08-004c011.pdf

Hence, I believe that the CFTC do not (as of this Sunday) have enough pieces of external opinions about this important issue to make their determination about the regulatory status of &#8220-event markets&#8221-.

I am asking the CFTC to extend the deadline to September 7th, 2008.

I believe that since the most interesting comments (other than Vernon Smith&#8217-s one, which appeared the first in May 2008) were made the last week preceding the July 7th deadline, there wasn&#8217-t enough time for the previous commenters or some other commenters to agree or disagree with those recent comments.

On top of all that, I understand that some people and organizations might well submit their comment on Sunday, July 6th, 2008 &#8212-the day before the deadline for the closure for the comments. I know that law professor Tom W. Bell will do so. It is rumored that 2 prediction exchanges will do so, too. It will be impossible for other commenters to assess those last comments, and give their opinion about those to the CFTC.

I believe that more people and organizations would come forward in the coming 2 months with interesting opinions about the &#8220-excluded commodities versus exempt commodities&#8221- debate (or some say, the &#8220-jurisdiction vs. exemption&#8221- debate), which is, as I understand it, the cornerstone of the CFTC&#8217-s concept release on &#8220-event markets&#8221-. Indeed, some business media organizations I know of will publish news articles about this debate, after the July 7th deadline. Hence, many more people will be drawn in the conversation about &#8220-event markets&#8221-, and we will all benefit from their input.

As I said, one one hand, the debate needs more external comments from people arguing that non-political events are &#8220-excluded commodities&#8221-.

On the other hand, the debate needs more external comments from people arguing that about the &#8220-exempt commodities&#8221-, &#8220-ECMs&#8221-, or &#8220-no-action letter&#8221- points of view. The American Enterprise Institute&#8217-s public petition of May 2008, the concept release of May 2008, and the comments sent to the CFTC published on the CFTC website as this Sunday, do not give many legal details about this side of the argument.

Pushing the deadline to September 7th, 2008 will allow another round of informal and formal discussions between the two sides of this important issue.

Already, one commenter (Jason Ruspini) is on the record publicly saying that, had he read the HedgeStreet&#8217-s comment to the CFTC, he would have put more emphasis on some of his arguments.

http://www.midasoracle.org/2008/07/05/my-response-to-the-cftc-on-event-contracts/

It&#8217-s for all those reasons that I am asking the CFTC to extend the deadline to September 7th, 2008.

–

#3. I fully agree with HedgeStreet in their comment to the CFTC (CL12) that the DCMs (and especially a non-intermediated DCM like HedgeStreet
) should be allowed to operate prediction markets on political elections, as discussed by the CFTC&#8217-s concept release of May 2008.

As I said above, not enough commenters have addressed the specific issue of how the non-political &#8220-event markets&#8221- should be regulated (or semi regulated, thru the &#8220-exemption&#8221- way). Hence, I can&#8217-t see how the CFTC can&#8217-t reach a wise decision on the issue of which type of &#8220-event markets&#8221- should be offered by which type of derivative exchanges (DCMs, ECMs, or exchanges that are granted a &#8220-no-action&#8221- letter).

Again, I am asking the CFTC to extend the deadline to September 7th, 2008.

–

Thanks for listening,

Chris F. Masse
Panorama B, Green Side
305, avenue Saint Philippe
Les Templiers, Sophia–Antipolis
06410 Biot, Alpes-Maritimes
France, European Union

&#8211-
&#8211-

–

RELATED POSTS:

– Chris Masse&#8217-s second comment to the CFTC on &#8220-event markets&#8221- (prediction markets)

– What the CFTC is asking.

–

Chris Masses second comment to the CFTC on event markets (prediction markets)

Posted on by
3

No Gravatar

Chris F. Masse
Midas Oracle
cfm &#8212-&#8212- midasoracle &#8212-&#8212- com
chrisfmasse &#8212-&#8212- gmail &#8212-&#8212- com

July 6th, 2008

Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st St. NW
Washington D.C. 20581

Attention:
Office of the Secretariat- [email protected]

Reference:
Concept Release on the Appropriate Regulatory Treatment of Event Contracts
73 FR 25669

–

Just a technical note, before I give you my thoughts. In the following, I call &#8220-prediction market&#8221- the specific market where one particular event derivative is traded. (For instance, the &#8220-Barack Obama will be elected US President in November 2008&#8243- prediction market.) And I call &#8220-prediction exchange&#8221- the general marketplace where many prediction markets (on political elections and other events) are traded. (Hence, I call HedgeStreet a &#8220-prediction exchange&#8221-).

Please, allow me to give you my thoughts on the subject of real-money prediction exchanges:

–

ABOUT THE INFORMATION AGGREGATION MECHANISM, FORECASTING, THE LIQUIDITY OF THE SOCIALLY VALUABLE PREDICTION MARKETS, THE DEVELOPMENT OF A US-BASED PREDICTION MARKET INDUSTRY, AND THE PROTECTION OF RETAIL TRADERS

–

The information aggregation mechanism functions well only if there are enough traders. Probabilistic predictions (which are of interest of the economists cited in the CFTC&#8217-s concept release) are generated only when there is enough liquidity, that is, when many traders come speculating on an event derivative market (e.g., on the topic of the next political election). Just because forecasters are interested in a topic and want to generate a market-based probabilistic prediction does not mean that traders will flock en masse. Market-generating forecasting is an offspring of the trading activity- if you have too little liquidity, you don&#8217-t have any trustworthy probabilistic prediction.

The socially valuable prediction markets should meet 3 criteria:
– their contracts should be very well drafted, so that the probabilistic predictions generated would be useful to society-
– a sufficient number of traders should like the topic-
– there should exist advanced, primary indicators which traders can follow to get early information (e.g., polls, among other sources of information, in the case of prediction markets on political elections).

Here&#8217-s a counter example. Yahoo! Research scientist David Pennock (one of the most active and well regarded researchers in this field) has created a set of prediction markets regarding the percentage share of web searches made in the US in 2008, for each Internet search engine (Google, Yahoo!, etc.) That would be extremely valuable, on the paper. Unfortunately, those sets of prediction markets have attracted only a fistful of traders:
http://www.intrade.com/aav2/trading/tradingHTML.jsp?evID=78364&amp-eventSelect=78364&amp-updateList=true&amp-showExpired=false
Hence, no trustworthy probabilistic predictions were generated.

The CFTC should take with a grain of salt the 2008 petition organized by the American Enterprise Institute
http://www.reg-markets.org/publications/abstract.php?pid=1276
that states that &#8220-not-for-profit research institutions&#8221- and &#8220-government agencies&#8221- should be allowed to run US-based, real-money prediction exchanges, for the good of society. Just because an organization is smart and fascinated by the prediction markets does not mean that its executives and managers will be capable of drawing traders. Obviously, prediction exchanges should be run by trading specialists and event derivative professionals, and properly regulated. No good will be done by the CFTC if amateurs are allowed to run un-regulated, real-money prediction exchanges.

I see 2 important keys for the development of socially valuable prediction markets.

a) The socially valuable prediction markets (which are not very popular, other than the ones on political elections) should be organized by the generalist prediction exchanges that draw traders en masse because they offer prediction markets on very popular topics.

Sports is a popular topic. If the CFTC go to the website of TradeSports http://www.tradesports.com/ , they will see that TradeSports links, on its frontpage, to the InTrade prediction markets at http://www.intrade.com/ and, thus, send the TradeSports traders to the InTrade prediction markets, which is obviously good for InTrade&#8217-s liquidity in general, and especially good for InTrade&#8217-s socially valuable prediction markets. In the same manner, the prediction markets on political elections organized by BetFair UK http://www.betfair.com/ are located within their central prediction exchange that is mainly devoted to sports.

The hard fact is that the most popular topic among individual traders (the retail customers of the prediction exchanges) is sports. As long as US laws and regulations won&#8217-t allow US-based, real-money prediction exchanges to organize prediction markets on the topic of sports, many US event derivative traders will give their business to offshore, real-money prediction exchanges who accept to take money from US residents (as it is the case with TradeSports-InTrade Ireland).

I understand, though, that the CFTC is working under a jurisdiction that presently outlaws prediction markets on sports.

b) The executives of the popular, real-money prediction exchanges should be willing to create socially valuable prediction markets by collaborating with outside researchers who specialize in certain verticals.

As of today, InTrade is the only real-money prediction exchanges that fill these 2 criteria &#8212-a) and b). InTrade&#8217-s executives and managers have deployed a considerable effort to create and run an impressive number of socially valuable prediction markets.

BetFair UK have chosen not to develop socially valuable prediction markets, alas &#8212-other than those on UK politics, which are well developed and of high social utility. And HedgeStreet does not have yet the CFTC&#8217-s stamp of approval to run markets of event derivatives non-financial topics, since that&#8217-s the purpose of the May 2008&#8217-s concept release.

The economists Justin Wolfers, Eric Zitzewitz, Robin Hanson, Koleman Strumpf and David Pennock (among others) have collaborated with InTrade Ireland to frame interesting questions. Obviously, the research institutions which those economic scientists are affiliated with (e.g., universities, colleges, business schools) have no business running real-money prediction markets.

If the &#8220-not-for-profit research institutions&#8221- and &#8220-government agencies&#8221- want to develop socially prediction markets, then they should do it in cooperation with established, popular, regulated, real-money prediction exchanges, who know what they are doing.

(In passing, I fully support Tom W. Bell&#8217-s point made in the 5th paragraph of his petition. The CFTC should not favor the not-for-profit prediction exchanges at the expense of the for-profit prediction exchanges. Tom W. Bell&#8217-s comment to the CFTC has not yet appeared on the CFTC website, as I type this. http://agoraphilia.blogspot.com/2008/07/lets-tell-cftc-where-to-go.html )

As I said, I follow the prediction market industry since 2003, and the 2 most common mistakes I see made by
the people proposing brand-new socially valuable prediction markets are that:
– they forget that the event derivative traders should have fun-
– they forget that, for each prediction market, there should exist advanced, primary indicators that traders should rely on to inform their trades.

I want to tell the CFTC that most people who talk about creating brand-new socially valuable prediction markets are totally unaware of these 2 basic rules.

In the beginning of this comment, I said that prediction markets are forecasting tools (and, hence, decision-support tools) if, and only if, there is sufficient liquidity. I also noticed that the world&#8217-s most liquid socially valuable prediction markets are offered by 2 exchanges (TradeSports-InTrade and BetFair) who use popular prediction markets (on sports, the fact is) to support the marketing of less popular, socially valuable prediction markets. (After making that argument, I acknowledged that the CFTC currently works for a legal environment that prohibits prediction markets on sports.)

My point here is to emphasize the uber importance of liquidity on socially valuable prediction markets. In my view, the best situation is when a big, generalist, real-money prediction exchange organizes socially valuable prediction markets and helps them to thrive. Only InTrade Ireland has done that, so far. My suggestion to the CFTC would be to create a legal environment such that their liquidity could be &#8220-repatriated&#8221- to the US, on a &#8220-InTrade USA&#8221- real-money prediction exchange.

A related issue is that the CFTC should be concerned about HedgeStreet&#8217-s financial health. After its third round of funding, HedgeStreet raised a total of $24.9 million.

http://www.hedgestreet.com/abouthedgestreet/pressreleases/pressrelease_21.html

Lately, HedgeStreet was aquired by an offshore investor for $6 million.

http://www.hedgestreet.com/abouthedgestreet/pressreleases/pressrelease_32.html

Obviously, there has been destruction of wealth, here.

The CFTC did a great job in 2004 when it approved HedgeStreet&#8217-s application as a Designated Contract Maker (DCM). The CFTC should now finish the job by creating a legal environment favoring the profitability of HedgeStreet and of other non-intermediated DCMs (e.g., InTrade USA, or BetFair USA, or TradeFair USA) &#8212-which I hope will be started up in the future in the US.

What I am afraid with the May 2008&#8217-s concept release on &#8220-event markets&#8221- is that the CFTC does not look into the real issues: the liquidity of socially valuable prediction markets, and the profitability of US-based companies operating real-money prediction exchanges (non-intermediated DCMs).

I&#8217-m afraid that all the solutions consisting in &#8220-exemptions&#8221- and &#8220-no-action&#8221- letters are false solutions that do not address the real issues.

Finally, for the issue regarding the protection of retail traders, I suggest that the CFTC looks into the worst scandal that occurred in the field of prediction markets &#8212-the &#8220-North Korea Missile prediction market&#8221- scandal. I am sad to say that InTrade Ireland acted in the worst way possible, and, thus, have indelibly tarnished their reputation, alas.

http://www.midasoracle.org/predictions/nkm-scandal/

–

Thanks for listening,

Chris F. Masse
Panorama B, Green Side
305, avenue Saint Philippe
Les Templiers, Sophia–Antipolis
06410 Biot, Alpes-Maritimes
France, European Union

&#8211-
&#8211-

–

RELATED POSTS:

– Chris Masse&#8217-s first comment to the CFTC on &#8220-event markets&#8221- (prediction markets)

– What the CFTC is asking.

–

HubDub question

Posted on by
2

No Gravatar

I did bet $20 on the &#8220-yes&#8221- side of the CFTC prediction market. But now, I want to sell those this &#8220-yes&#8221- contract and buy a &#8220-no&#8221- contract instead.

How can I do that on HubDub? Thanks.

–

UPDATE: Jed Christiansen gives me the explainer in the comment, below. Thanks. It worked fine. I am now negative on this prediction.

–

Free Speech in Event Market Claims

Posted on by
4

No Gravatar

In addition to a joint comment with a score of signers, I also responded to the Commodity Futures Trading Commission (CFTC)&#8217-s Concept Release on the Appropriate Regulatory Treatment of Event Contracts by firing off a solo comment. I there focused soley on question 14, in which the CFTC asked, &#8220-Should certain underlying events or measures&#8211-such as those based on assassinations or terrorist activities—be prohibited altogether due to the social perception and impact of such events? What statutory or other legal basis would support this treatment?&#8221-

Much of my comment tracked the answer I posted here earlier. Long story short: such claims would not materially promote wrongful acts, so the CFTC has no legal basis to ban them. To that argument, however, I added a First Amendment analysis- to wit:

Could you fault claims about assassinations or other terrorist events for giving incentives for wrongful acts? Not very plausibly- as I explain above, it is very unlikely that anyone would find it profitable or prudent to try to use an event market to cash in on wrongdoing. Furthermore, all sorts of investment instruments offer the same incentives. Thus, for instance, a would-be terrorist might go long on oil futures prior to pulling off an attack on a refinery. Indeed, that sort of scenario seems much, much more likely than one involving event markets.

At root, concern about unseemly event market claims boils down to concern about violating a taboo about what sorts of things people discuss openly in a polite society. Those norms merit our concern, granted. They do not, however, justify imposing a speech restriction on event markets. And make no mistake about it- to bar such claims would constitute a restriction on speech.

Specifically, if the CFTC banned certain sorts of event market claims relating to assassinations, terrorist activities, or criminal acts, it would thereby impose a content-based restriction on speech. That would, under present First Amendment jurisprudence, trigger the highest level of judicial review: strict scrutiny. The ban would almost certainly fail to survive that scrutiny, as it would be too broad (stopping not just the bad guys but also the good ones), too narrow (since it would fail to forbid the use of other financial instruments, such as generic futures, from like uses), and not narrowly tailored (since there are other, better ways to discourage bad acts). Those sorts of claims would, moreover, fall within the core of the sort of speech protected by the First Amendment, as they would concern political events.

Our freedoms of speech and expression include the right to ask troubling questions. The CFTC has no good reason to ban event market claims about assassinations or other illegal acts. Nor can it do so constitutionally.

Suppose that my argument leads the CFTC to doubt that it can ban event markets from hosting claims about assassinations or terrorist activities. Suppose further, as seems likely, that the CFTC has some discretion in deciding whether its jurisdiction encompasses event markets- suppose, that is, that extant law does not command one answer to that question. What result?

I predict that the CFTC would tend to deny that it has jurisdiction over event markets because it would not want to take the blame for encouraging distasteful claims. Indeed, I not only predict that result, I intend it. I don&#8217-t trust the CFTC to do a very good job regulating event markets, so I want it to know why it does not even want to try.

[Crossposted at Agoraphilia and Midas Oracle.]

What I think of Robin Hansons comment to the CFTC… and what I think about his slam at TradeSports-InTrade, BetFair-TradeFair, and HedgeStreet.

Posted on by
14

No Gravatar

Overall, his input is very brainy.

It&#8217-s a major contribution to the general discussion about prediction markets.

–

Please, allow me to disagree on one thing he said.

–

Robin Hanson:

One proposed distinguishing criteria includes the size of an individual trader&#8217-s stake, and the number of traders. The Iowa Electronic Markets are limited on both of these parameters. Such limits do succeed in preventing large hedging markets from masquerading as info-motivated event markets. But they do little to prevent generic gambling markets from masquerading as info-motivated event markets.

–

I have a fundamentally different view. What is important is not what Robin Hanson thinks of TradeSports-InTrade, BetFair-TradeFair, and HedgeStreet &#8212-and what their motivation(s) are.

What is important is whether those prediction exchanges do generate trustworthy and accurate probabilistic predictions. Period.

They do or they do not. Period.

–

And guess which prediction exchange has been more than willing to host Robin Hanson&#8217-s conditional prediction markets: Hint: it&#8217-s not the Iowa Electronic Markets.

Did Robin Hanson tell that to the CFTC? :-D

–

UPDATE: Robin Hanson&#8217-s comment, posted below this post.

Chris, I did not take the CFTC call for comments as asking for what I would choose if I were king. I instead took it as them asking for help negotiating treacherous political waters. Part of the reality of their difficult situation is that the public, and hence Congress is quite wary that new rules might in effect legalize general gambling. Convincing the public that betting markets provide accurate predictions is not enough to convince them to legalize such markets in general. If there is any doubt, if I were king I would in fact legalize general gambling.

–