Honestly, I didn’t want to send this email.
But, I’ve made it a rule that I would send out an email every weekday.
So, here we are.
I find a lot of real world utility in prediction markets as a source of high quality forecasting data. But, I don’t necessarily believe that the forecasts produced by sports-event markets are that high quality.
Some users perform quantitative analysis and then enter a position they think has positive effective value. But, I would venture to say that most of the money placed on sporting events is simply fans with gut feelings on who will win.
For this reason, I think sports-event markets will have negative effects on the public perception of prediction markets and the long term growth of the industry. It is becoming increasingly hard to distinguish a sports based market from a sportsbook.
With that being said, Prediction markets printed money with Super Bowl markets over the past weekend.
All of the largest volume moves over the entire past weekend were people trying to predict the winner of the Super Bowl.
The Seahawks were favored to win. They ended up winning. Was one of the most boring Super Bowl’s I have ever watched (if not #1).
We’ll be back tomorrow with (hopefully) our regularly scheduled programming.
Best,
Javier
(written in Tennessee, USA at 10:05AM EST).