The Need For A Legal Prediction Market?

March 13th, 2013

At Wonkblog, Neil Irwin eulogizes InTrade, and raises an interesting pont:

What if there were a new, CFTC-authorized, fully legal version of Intrade up and running. And what if every columnist and TV commentator put some of their own money in an account and put money on outcomes—fully disclosed and public, for all their readers to see.

That way, when someone on TV says, “Hillary Clinton is a shoe-in to be the Democratic nominee in 2016,” they would also have to make another judgement: Is the 49 percent probability of that outcome priced into Intrade (RIP) too high, too low, or just right? Whatever their answer, how strongly do they believe it? Enough to put $20 on it, or $100, or $500?

Done right, Intrade, or a successor that has more of a clear legal status and regulatory oversight, can be a vehicle for accountability in punditry, not just a way to make baseball playoff games more exciting. And that would truly be something new under the sun.

Distinguishing sports markets from markets that concern core political speech is no my near-term agenda.