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Intrade Shutdown Hurts Academics
New submitter jader3rd writes "Intrade, a popular Irish website that lets people bet on anything, has shut down. In addition to being used by gamblers, Intrade has been used by academics and pundits to track public sentiment. '"... broad crowds have a lot of information and that markets are an effective way of aggregating that information," says Justin Wolfers, "and they often turn out to be much better than experts."' Being forced to lose their U.S. customers couldn't have helped.
The question isn't whether other people "should have" the right to gamble.
The question is whether YOU should have the right to employ violence (meaning physical force or threat thereof) against other people in an attempt to stop them from gambling.
Now that the question has been properly rephrased, it can be properly answered.
You're better off going to intrade's website here for information: http://www.intrade.com/
" With sincere regret we must inform you that due to circumstances recently discovered we must immediately cease trading activity on www.intrade.com.
These circumstances require immediate further investigation, and may include financial irregularities which in accordance with Irish law oblige the directors to take the following actions:
Cease exchange trading on the website immediately.
Settle all open positions and calculate the settled account value of all Member accounts immediately.
Cease all banking transactions for all existing Company accounts immediately.
During the upcoming weeks, we will investigate these circumstances further and determine the necessary course of action.
To mitigate any further risk to members’ accounts, we have closed and settled all open contracts at fair market value as of the close of business on March 10, 2013, in accordance with the Terms and Conditions of our customers’ use of the website. You may view your account details and settled account balances by logging into the website.
At this time and until further notice, it is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded.
The Company will continue the maintenance and technology operations of the exchange system so that all information is preserved properly.
We are not able to provide telephone support or live help services at this time, please contact the company by email at: accountservices@intrade.com
We appreciate your custom and support over the years. We are committed to reporting faithfully the status of things as they are clarified and hope you will bear with us as we do all we can to resume operations as promptly as possible.
Sincerely,
The Board of Directors of Intrade the Prediction Market Limited "
Some people die at 25 and aren't buried until 75. -Benjamin Franklin
I bet this wouldn't have happened!
"The moves followed concerns raised by the company’s auditors over more than $1.5 million payments to Intrade’s founder, John Delaney, and other unnamed third parties. The transactions, according Intrade’s auditors, were not sufficiently documented."
http://dealbook.nytimes.com/2013/03/11/online-betting-site-intrade-halts-operations/
Some people die at 25 and aren't buried until 75. -Benjamin Franklin
You've successfully done nothing besides shut one site down. Thank god. Nothing will immediately spring up to take it's place. You've successfully prevented society from gambling, which is important because your holy book says so. Kinda. Alternatively, good job Casinos. People desperate for their gambling addiction will now have to leave the house in order to spend their paycheck. You'll be able to slip your local politicians their bribes now.
If neither the bible pounders nor casino semi-organized-crime was involved with intrade being barred from the US and shut down: sorry for maligning you, but fuck you anyway.
popularity seems to be measured by retweets lately
The summary left out the an important part of the about why Intrade is closing.
According to www.Intrade.com
" With sincere regret we must inform you that due to circumstances recently discovered we must immediately cease trading activity on www.intrade.com.
These circumstances require immediate further investigation, and may include financial irregularities which in accordance with Irish law oblige the directors to take the following actions: "
In 2005, Intrade specifically made an agreement with the CFTC not to trade options on commodities and futures. Then in 2011 they broke that agreement by offering options on commodities and futures, thus resulting in the CFTC filing a lawsuit against them. At one point they limited the access of the api to a few customers to prevent competition from other members.
Dude, you should have seen the mess that was the 2012 elections. Intrade was a joke.
Anybody do one of these in Bitcoin yet?
I was gonna say I bet it's just a matter of time, but, well...
Funny, but not surprising. MGEX was positioning itself to be the IntradeUSA electronic host/clearing house.
Between MD, Intrade, and stealing a deceased contractor's software, it's amazing the CFTC hasn't investigated...
broad crowds have a lot of information and that markets are an effective way of aggregating that information," says Justin Wolfers, "and they often turn out to be much better than experts
Of course they are better than experts. The system removes bettors that are wrong too often and distributes their votes to the bettors that are more prescient. It doesn't take that many iterations to weed out the idiots and pundits.
Why do I only ever find out about these things, when it's too late?
If trading funny money and a bare-bones web interface is OK, there is Foresight Exchange (aka Ideosphere) which has worked almost flawlessly since 1994.
http://www.ideosphere.com/
Wonder how the definition of betting excludes things like giving money to politicians for the chance to get payout in political favors.
I never understood why Intrade got so much press--the Iowa Electronic Market has been doing the "online futures trading" thing for far longer. They're still up and running at: http://tippie.uiowa.edu/iem/
And they have approval from the CTFC: http://www.cftc.gov/files/foia/repfoia/foirf0503b004.pdf
rage, rage against the dying of the light
Should have seen this coming. Results strikingly accurate among computer savy individuals who understand how prediction markets work.
I placed a bet on Intrade betting this would happen....how do I get my money now?
I say my house will get flooded this year. The insurance company says no. In my minds the odds are 1/500 so I pay 0.5% of my house value in flood insurance. The insurance company doesn't think that the odds are that high, so they enter into a deal to pay me full price of my house in case it gets flooded.
One of us loosed and the other one wins. Next year we bet again.
Why is this legal and plain old betting is not?
The problem I have with futures trading is that it creates incentive for things to go one way or another.
What if I were to bet 500k that ${ASSASSINATION_TARGET} was not going to die by getting shot and then thrown in the east river tomorrow?
Someone who sees that would then have incentive to make that happen.
Even in more limited ways it can still be a problem. Sports history has instances of people throwing games in order to make large amounts of money. I could see the same causing sabotage in industry. You cant publicly bet on things without changing the probability that they will happen.
Let them find a way to fund it themselves. The Hollywood Stock Exchange has been doing just fine for over a decade on ad revenue.
The CIA actually run a prediction market for a while until public outcry caused them to shut it down.
http://www.forbes.com/sites/andygreenberg/2011/04/20/cia-investors-aim-to-build-a-pseudo-gambling-market-for-data-security-predictions/
The CIA has long been intrigued by the intelligence potential of prediction markets. A 2006 paper the agency published cited examples like betting markets that predict election outcomes more accurately than polls, and orange juice future markets that predict weather better than meteorological organizations. It also pointed to the use of prediction markets within corporations like Google and Eli Lilly, which have sometimes skirted gambling laws by supplying their employees with âoeinvestment fundsâ and given them an opportunity to make wagers based on their knowledge.
The Defense Advanced Projects Research Agency (DARPA) even launched its own prediction market known as FutureMAP for intelligence purposes in 2001, though the program was canceled for political reasons in 2003. As the CIAâ(TM)s paper notes, Senators Byron Dorgan and Ron Wyden called such experiments âoeterrorism betting parlors,â and argued that âoespending millions of dollars on some kind of fantasy league terror game is absurd and, frankly, ought to make every American angry.â
What's interesting is that prediction markets seem to have advantages over opinion polls. E.g.
http://www.lewrockwell.com/rozeff/rozeff88.html
In an article in support of rational markets, Mark Rubinstein relates this story:
"At 3:15 p.m. on May 27, 1968, the submarine USS Scorpion was officially declared missing with all 99 men aboard. She was somewhere within a 20-mile-wide circle in the Atlantic, far below implosion depth. Five months later, after extensive search efforts, her location within that circle was still undetermined. John Craven, the Navy's top deep-water scientist, had all but given up. As a last gasp, he asked a group of submarine and salvage experts to bet on the probabilities of different scenarios that could have occurred. Averaging their responses, he pinpointed the exact location (within 220 yards) where the missing sub was found."
James Surowiecki in his book The Wisdom of Crowds tells the story of the game show "Who Wants to be a Millionaire" in which a contestant could ask an expert for help with a question or ask the audience. The experts were right 65 percent of the time, and the audience was right 91 percent of the time.
Jude Wanniski related a story told to him by Jack Treynor, a finance guru. Treynor had his class guess the number of jelly beans in a jar holding 850 beans. The average guess was within 3 percent of the total. Wanniski, by the way, correctly realized that this supported the efficiency of financial markets. He also, in my opinion incorrectly, construed this as proof of the efficiency of political markets, an opinion he expanded upon in The Way the World Works.
Prediction markets in general perform exceedingly well compared to individual forecasts. In his article on prediction markets, Philip O'Connor writes: "In fact, studies of prediction markets have found that the market price does a better job of predicting future events than all but a tiny percentage of individual guesses. The analysis below of the Virtual Super 12 shows the average selection, an average or constructed market price, to be better than 99% of participants' selections."
He continues: "A short list of other evidence includes the following:
Markets that predict elections have been shown to outperform the predictions of opinion polls.
Prediction markets on movie box-office receipts and more obscure events have been shown to correspond closely with actual outcomes.
echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
And the answer, as it always is when twisted in that libertarian way, is yes. Society has the right to set rules and enforce them. And I, as a part of society, can support such rules. Not as an individual, but as a society.
For every problem, there is at least one solution that is simple, neat, and wrong.
I'm a DAGGRE user, which is run out of George Mason University. It's great for academic purposes; I just went to an awesome DAGGRE workshop the other weekend and learned all about prediction markets. It uses play money, which has been shown to be just as good for research purposes.
If you want to use slightly more real money, Bets of Bitcoin is useful as well.
Does that make me a bible thumper? Wow. Amazing to find that out.
Seriously, anonymizing money transfers (which is one of the main functions of gambling and casinos) makes for easy money laundering and
Think of it this way: passing money through a casino or betting venue (online or offline) is effectively a one-way function - you can't trace the money to it's source. Ever wonder why James Bond is always hanging around casinos? Because that's how he gets paid to do his dirty deeds (at least that's the real story). His "day job" at MI6 is a convenient cover.
It's not about shielding your society from all gambling - this is a "avoid the chasing bear by being faster than your friend" - you want to keep this kind of activity from corrupting your society as much as possible - let the contract killers hang out in Macau or Monaco. By making it more difficult to launder money you keep the government just that bit cleaner.
Make sure everyone's vote counts: Verified Voting
http://www.elitetrader.com/vb/showthread.php?s=&threadid=261203&highlight=intrade
The founder of Intrade received $2.6m in insufficiently documented payments from the popular prediction markets company in 2010 and 2011, an audit revealed weeks before trading on the site was halted.
Auditors for the Dublin-based company – an online hub where people can bet on everything from presidential elections to papal conclaves – highlighted concerns about “significant financial irregularities” and the payments made to John Delaney, according to financial records Intrade recently filed with Ireland’s companies registration office. Mr Delaney, who launched Intrade’s parent company in 1999, died on Mount Everest in May 2011.
The documents also revealed that the company’s shareholders in 2011 included hedge fund managers Paul Tudor Jones and Stanley Druckenmiller, and a trust connected to Christopher Hehmeyer, the current chairman of the National Futures Association, a US regulatory body. None of the shareholders could be reached for comment on Monday.
The revelations came a day after Intrade suspended all trading activity and froze its customer accounts. The company said in a notice on its site on Sunday that recently discovered “circumstances”, on which it did not elaborate, would be subject to an investigation and could uncover potential “financial irregularities”.
The discovery raises questions about the oversight of unregulated prediction markets and comes three months after the US Commodity Futures Trading Commission sued to stop the company from offering prediction contracts to Americans, who were the most active users of the site. Intrade did not refer to the CFTC case in its notice to customers on Sunday.
An Intrade official and Caulfield Dunne, the Dublin-based accountancy that performed the audit, did not immediately respond to requests for comment.
The financial accounts show payments made to Mr Delaney worth $1.4m in 2011 and $1.2m in 2010.
Brian Dunne, auditor at Caulfield Dunne, said in a written opinion on February 4 that proper books of account were not kept by Intrade for the year ended December 2011.
He noted the current directors of the company were only appointed in November 2012 and were not in a position to comment on the maintenance of the books prior to their appointment.
“The directors have also noted that they are aware of issues identified during the course of the audit with regard to significant financial irregularities in the internal accounts pertaining to previous years that had a material effect on the opening balances of the company at January 1 2011,” he said.
He added: “There was insufficient documentation regarding payments made into bank accounts in the name of the deceased former director and other third parties.”
The current directors say they have no knowledge to the background to these payments. They said the payments should be reflected in the profit and loss account as a prior year adjustment “until the matter has been fully resolved”. The financial accounts are signed by directors Imants Auzins and Ronald Bernstein.
The development comes almost exactly a year after the spread betting firm Worldspreads went into administration after telling regulators it could not repay £13m of client funds.
Worldspreads failed to segregate client money, instead mixing the funds with its own money, according to statements filed last year by Lindsay McNeile, the operator’s chairman. He said Worldspreads falsified its accounts to hide losses in the months leading up to its collapse.