The Scotsman
THE popularity of internet gambling and the use of online betting exchanges have created a virtual "high-tech crystal ball" through which future world events can be predicted with a greater degree of accuracy than ever before.
In a paper to be presented at the Royal Economic Society’s annual conference this week, a team of researchers will claim that the relatively new phenomenon of person-to-person betting exchanges and an analysis of betting trends and results now offers an unprecedented way of predicting the future.
The researchers describe how recent predictions obtained as a result of analysing trends from online exchanges have included accurate forecasts for the winner of every state in last November’s US presidential election and even a correct prediction for the date of capture of former Iraqi president, Saddam Hussein.
Entitled "Market Efficiency in Person-to-Person Betting Markets", the paper has been compiled by senior academics David Paton, Professor of Industrial Economics at Nottingham University Business School; Michael Smith, a senior lecturer in economics at Canterbury Christ Church, University College and Leighton Vaughan Williams, Professor of Economics and Finance at Nottingham Trent University. The researchers have discovered that the volume of person-to-person wagers on internet betting exchanges has grown to such an extent that the current market leader, Betfair, now claims to match about 500,000 bets daily.
Professor Vaughan Williams said the concept boiled down to "following the money". He said: "Our findings offer a route to a golden age in which we will be able to make the dream of ‘a high-tech crystal ball’ a genuine reality. There is so much money wagered on these betting exchanges that the odds actually do represent the reality of something happening. We studied the US presidential election, the outcomes of criminal trials and even the capture of Saddam Hussein, and the markets predicted them all."
