Putting Money on Predictive Betting

Equity markets may resemble casinos, but that’s not an image that, say, the London Stock Exchange or New York Stock Exchange prefers to project. By contrast, Betfair welcomes the comparison. In 2000 the London-based gaming giant, now part of Paddy Power Betfair, introduced exchange wagering. Online bettors seek out odds to their liking — akin to stock order matching — in a marketplace so liquid that they can cash out at any time, even before a horse race is completed.

这是截至2016年5月10日，由于新泽西州的牌照和与蒙茅斯公园赛马场的交易的许可，这是一个创新的创新。很快意识将会成长，赌注品牌不仅仅是关于马匹。该公司在欧洲欧洲冠军联赛足球和NFL学院汇票到欧洲歌曲比赛和学院奖项中的所有市场。而且，在一年的高赌注政治中，它的Betfair预测服务已经在伦敦市长比赛（Betfair Betting在投票开始前获得了93％最受欢迎的萨格克·汗（Betfair Betting），Brexit（69％的概率）U.K. will stay in the EU, as of early May) and theU.S. presidential election(Hillary Clinton, 71 percent likelihood, to Donald Trump’s 24 percent, also as of early May).

Indeed, Betfair Predicts is just one of a menu of services listed on the company’s website. What is an intriguing sidelight for £477 million ($688 million)-in-revenue Paddy Power Betfair is the main business proposition of U.S.-based entrepreneurs who envision significant commercial potential in prediction markets.

这是一个艰难的斗争。在线赌博抵抗国家和联邦法律限制，以及类似于期货合约的任何东西都必须通过商品期货交易委员会传递集合，这是谨慎地将公众公开到复杂产品的财务风险。

“It’s as if there is a divide in the middle of the Atlantic Ocean,” says Greg DePetris, director and co-founder of Pivit, which bills itself as “an interactive marketplace that combines public opinion, news and data to produce live odds on global event outcomes.” DePetris and others on his team previously worked for Intrade, a pioneering, Ireland-based marketplace that ran afoul of the CFTC and closed in 2013.

DePetris contends that binary options — what Pivit trades, on whether an event occurs or not — are “a viable way to transfer risk from one person to another, in the process providing valuable insights in real time, no harm, no foul.”

Prediction market promoters subscribe to wisdom-of-crowds theory: The more opinions that are aggregated, the more accurate the forecast is. It supposedly works best when players have money at stake — the proverbial skin in the game. Amid the current U.S. regulatory reality, Pivit offers nonmonetary points and prizes. It passed the 100,000-user milestone in February and has served as a source of data for CNN’s election coverage that often proved more accurate or insightful than concurrent opinion polls.

Pivit has company. PredictIt invites trades in real money on U.S. and world politics; it got CFTC approval because it is an academic research project (led by New Zealand’s Victoria University) and caps individual exposure at $850. Augur, a beta-stage platform running on an Ethereum blockchain, also promises real-money returns and invites participants to create their own markets. Economist Paul Sztorc has proposed leveragingBitcoin and blockchainin a predictive voting system called Truthcoin.

Both in and above the fray is PredictWise, where Microsoft Research economist David Rothschild pontificates on predictions “generated from real-money markets that trade contracts on upcoming events,” namely, Betfair and PredictIt.

But it is Pivit that openly flaunts financial-market connections. DePetris, a onetime futures trader, says predictive techniques can yield valuablemarket-sentimentand risk signals. Investors in Pivit include its software supplier, Sweden’sCinnober Financial Technology;fintech投资银行广泛haven Capital Partners; andREDI Holdingschair P. Howard Edelstein, who bought his shares in a September 2015 demonstration of Digital Asset Holdings’ blockchain software for securities issuance. Prediction markets are “better than polls,” Edelstein says: “I can see elections being done this way.”