A Blow to Prediction Markets

So long, Intrade.

The news hit yesterday that Intrade closed its doors to U.S. bettors.

This is surely a blow to the proponents of prediction markets (sometimes called “predictive markets”) – a form of forecasting where people place bets on the likelihood of real-life events taking place. There are many who believe prediction markets rival the accuracy of other forms of forecasting.

What’s that, you say? Intrade didn’t actually close? It’s still operating in many other countries.

Yes, that’s true. But without the massive and, let’s face it, influential U.S. population involved, it’s hard to see how Intrade can move forward as the world leader in prediction markets.

There must have been some serious blowback from yesterday’s announcement. The following note is currently posted at the top of their website:

“The report of Intrade’s death was premature” – We understand yesterday’s announcement was met with surprise and disappointment by our US customers, but this in no way signals the end of Intrade in the US. In the near future we’ll announce plans for a new exchange model that will allow legal participation from all jurisdictions – including the US. We believe this new model will further enhance Intrade’s position as the leading prediction market platform for real time probabilities about future events.

We’ll see if that’s possible. The political climate with respect to legalized gambling in the U.S. is complex and rife with pitfalls.

I would love to see a way to allow U.S. consumers to participate legally in prediction markets. However, it’s not proven to be a big enough business to get the attention of U.S. regulators.

Perhaps it will have to grow overseas and make a grand re-entrance into the U.S.

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About Dana Stanley

Dana is the Editor-in-Chief of Research Access.

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