OPEN-SOURCE PREDICTION EXCHANGE: How Smarkets is going to eat BetFairs lunch -well, they hope.

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TechCrunch UK

There’s an interesting twist – they plan to offer an open API for people to develop their own betting applications and use the Smarkets infrastructure. Their idea is this: users don’t need knowledge of odds or experience. It’s more about speed and entertainment than sports.

Smart idea, but how will this crack the chicken-and-egg problem that every prediction exchange (betting exchange) has at inception? How will this help fighting BetFair&#8217-s network effect? What makes you think that BetFair and TradeSports don&#8217-t offer &#8220-speed and entertainment&#8221-? Do people really want to trade sports or &#8220-develop their own betting applications&#8221-? What would prevent BetFair and TradeSports to do the same?

Anyway, best wishes to UK-based Yankees Jason Trost and Hunter Morris. :-D


Smarkets – Their web framework. – PDF file

Smarkets – Open-source software they use.

Smarkets – Press release

BetFair makes the frontpage of the New York Times -as the White Knight of sports. – Note that the term prediction markets is never pronounced. – TradeSports is not mentioned, but the last paragraph of the article suggests that all Internet sports betting should be legal and regulated.

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Previously: BetFair&#8217-s Mark Davies on sports betting and the fight against corruption

Previous blog posts by Chris F. Masse:

  • Excellent article about enterprise prediction markets and Inkling Markets —with a good word for Robin Hanson, who invented MSR.
  • HubDub limitations
  • BetFair Developer Program use Joomla! as their blog software (and CMS).
  • Lawsuit aiming at compelling the office of the United States trade representative to produce a copy of its compensation settlement with the European Union over the United States’ withdrawal of gambling services from the General Agreement on Trade in Services.
  • Iraq War = “not necessary”, “a serious strategic blunder” — US News Media = “complicit enablers” in the manipulation of the public (“the propaganda campaign”) — George W. Bush turned away “from candor and honesty when those qualities were most needed.”
  • JASON RUSPINI’S CROCKERY: The Brain states forcefully that they are not “event futures”, but “binary options”. Still, as soon as he premieres prediction markets on tax rates at InTrade, he calls them “tax futures” —of course.
  • Tasmania’s Prime Minister who licenced BetFair Australia departs “abruptly”.

ABC 20/20 – A good (but servile) explainer on the wisdom of crowds and the prediction markets

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ABC 20/20 featuring InTrade – (May 9, 2008)

Foretelling The Future: Online Prediction Markets &#8212- (4 pages in all)

ABC video

YouTube video

  1. Not a single word about InTrade-TradeSports fucking up its traders during the North Korea Missile episode.
  2. Although James Surowiecki is a great thinker overall, I&#8217-m not happy he served InTrade&#8217-s past forecasting successes in absolute terms &#8212-and not in terms of probabilities. That shows James Surowiecki can&#8217-t be the ultimate leader of the field of prediction markets. Robin Hanson, Justin Wolfers, Koleman Strumpf, Eric Zitzewitz, or even Emile Servan-Schreiber, would have not made that mistake.
  3. All prediction markets are not created equal. Spot that they go too far, saying terrorism prediction markets or earthquake prediction markets could serve a societal purpose. That is complete bullshit. That is pure hype. As I said yesterday, an analyst should check whether a given prediction market is really able of aggregating important information. Just because John Delaney wants to create a betting market to get money doesn&#8217-t mean that that given prediction market will be able to give sound forecasts. Otherwise, we would have prediction markets about future lottery outcomes and we would make a fortune out of that. :-D
  4. Spot that they put the emphasis on the easy translation between the 0&#8211-100 prices and the 0&#8211-100 probabilities. That puts BetFair&#8217-s model (based on those damn digital/decimal odds) out of the picture.

InTrades Software Glitch? – [See Jason Ruspinis comment, at the bottom of the post.]

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Here is a beauty from InTrade, 12 hours ago: Bids and Asks at the same price. Looks like the &#8216-ol InTrade price-matching mechanism is working great.

Signed: Deep Throat

Editor&#8217-s Note: Here&#8217-s a new screen shot, taken this Saturday early morning (US Easter: 2:50 am).

Jason Ruspini:

Actually it’s working fine. This means the same trader has a bid and offer at the same price. Otherwise traders would be able to manufacture bogus volume by trading with themselves.

The Global Betting Exchange

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The company behind BETDAQ will launch a new exchange in the near future. It is backed by significant players in the global sports trading market. It will offer breath of markets and level of liquidity unsurpassed in the betting exchange sphere. It wil target the retail exchange bettor. It will not be purple in colour.

Main investor: Dermot Desmond

Alleged investor: J. P. McManus

Other investors: [One or two surprises to come…]

Signed: Deep Throat


The Global Betting Exchange


Note to the Midas Oracle readers: Actually, there are two brand-new, real-money prediction exchanges (betting exchanges) that will pop up onto the prediction market scene soon. (That is, Global Betting Exchange is only one of them.)