Actually existing prediction markets?

What pub­lic pre­dic­tion mar­kets ex­ist in the world to­day? Have you used one re­cently?

What at­tributes do they have that should make us trust them or not, such as liquidity and trans­ac­tion costs? Do they dis­tort the tails? Which are us­able by Amer­i­cans?

This post is just a re­quest for in­for­ma­tion. I don’t have much to say.

In­trade used to be the dom­i­nant mar­ket, but it is gone, open­ing up this ques­tion. The most pop­u­lar ques­tion on pre­dic­tion mar­kets has been the US Pres­i­den­tial elec­tion. If a pre­dic­tion mar­ket wants to get off the ground, it should start with this ques­tion. Since the cam­paign is gear­ing up, mar­kets that hope to fill the vac­uum should ex­ist right now, hence this post.

Many sports book­ies give odds on the elec­tion. Book­mak­ers are not tech­ni­cally pre­dic­tion mar­kets, but they are awfully close and I think the differ­ence is not so im­por­tant, though maybe they are less likely to provide his­tor­i­cal data. They may well be the most liquid and ac­cu­rate sources of odds. But the fact that they con­cen­trate on sports is im­por­tant. It means that they are less likely to ex­pand into other forms of pre­dic­tion and less likely to be available to Amer­i­cans. I sus­pect that there are too many cov­er­ing the elec­tion for an ex­haus­tive list to be in­ter­est­ing, but feel free point to point out in­ter­est­ing ones, such as the most liquid, most ac­cessible to Amer­i­cans, or with the most ex­ten­sive cov­er­age of non-sports events.

Bet­ting is ille­gal in Amer­ica. This is rarely en­forced di­rectly against in­di­vi­d­u­als, but of­ten cre­ates difficulty de­posit­ing money or us­ing the sites. I don’t think that they usu­ally run into prob­lems if they avoid sports and fi­nance. In par­tic­u­lar, In­trade was spun off of a sports bookie speci­fi­cally to reach Amer­i­cans.

Here are a few com­ments on Wikipe­dia’s list. It seems to be us­ing a strict mar­ket crite­rion, so it in­cludes two sports sites just be­cause they are struc­tured as mar­kets. Worse, it might ex­clude book­ies that I would like to know about. Not count­ing cryp­tocur­rency mar­kets (which I would like to hear about), it ap­pears that there are no se­ri­ous money pre­dic­tion mar­kets. The clos­est is New Zealand-based iPre­dict, which is limited to a to­tal de­posit of US$6000, and it takes a 18 months to build up to that. The ven­er­a­ble Iowa Elec­tronic Mar­kets (re­stricted to fed­eral elec­tions) and the young NZ Pre­dic­tIt have even smaller limits, in re­turn for ex­plicit le­gal­ity in Amer­ica. It in­cludes two play money mar­kets: Microsoft and Hyper­mind. Fi­nally, it men­tions the de­funct play-money Sci­cast, most no­table for its differ­ent topic: sci­ence and tech­nol­ogy. Hyper­mind and Sci­cast came out of the IARPA con­test. Not on the list, I should men­tion Pre­dic­tionBook, which is close to be­ing a play-money pre­dic­tion mar­ket, but tuned in differ­ent di­rec­tions, both in terms of the feed­back it pro­vides to par­ti­ci­pants and the way it en­courages a pro­lifer­a­tion of ques­tions.

Up­date: In the pre­vi­ous para­graph, I dis­carded two sports book­ies from Wikipe­dia’s list. I did so be­cause I thought that they had very lit­tle non-sports offer­ings, but in both cases I did a poor job of nav­i­gat­ing them and un­der­es­ti­mated the num­bers. Smar­kets still seems too small to be in­ter­est­ing, but Bet­fair does have solid poli­ti­cal offer­ings and is right­fully at the top of the list.

As of March 2016 my recom­men­da­tions are:

  • Bet­fair (see also) is the best real mar­ket.

  • Pre­dic­tIt is open to Americans

  • Me­tac­u­lus is a play money market

  • Good Judg­ment Pro­ject (Tet­lock) is another

  • Pre­dic­tionBook is use­ful for com­ple­men­tary pur­poses, such as record­ing one’s pre­dic­tions, es­pe­cially ones that do not cor­re­spond to ques­tions on other sites. It is not so use­ful for in­te­grat­ing other peo­ple’s pre­dic­tions or scor­ing ac­cu­racy.