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Mon March 11, 2013
Add Its Own Demise To Intrade's List Of Blown Calls
Originally published on Mon March 11, 2013 10:49 am
Who could have predicted this?
Well, apparently not "the world's most famous predictions market."
Intrade has given in to the pressure it's been getting from financial regulators and a subsequent sharp decline in its business. The trading site has closed its operations.
The once very popular Irish site that let users bet on the odds of almost anything made its name by correctly predicting such things as Barack Obama's 2008 White House win. It developed a reputation, as NPR's Yuki Noguchi reported last year, of producing odds that were "almost always right."
That was its reputation, at least. In reality, Intrade's odds weren't always on the mark:
-- They predicted the Supreme Court would knock down "Obamacare." The court didn't do that.
-- Michael Jackson's trial on charges related to child sexual abuse? Intrade had him being convicted on several counts. He was acquited of them all.
-- Like the pundits and pollsters, Intrade was way off on what would happen in the 2008 New Hampshire Democratic presidential primary. It had Obama winning. But it was Hillary Clinton who emerged victorious.
"With sincere regret we must inform you that due to circumstances recently discovered we must immediately cease trading activity on www.intrade.com.
"These circumstances require immediate further investigation, and may include financial irregularities which in accordance with Irish law oblige the directors to take the following actions:
-- Cease exchange trading on the website immediately.
-- Settle all open positions and calculate the settled account value of all Member accounts immediately.
-- Cease all banking transactions for all existing Company accounts immediately.
"During the upcoming weeks, we will investigate these circumstances further and determine the necessary course of action.
"To mitigate any further risk to members' accounts, we have closed and settled all open contracts at fair market value as of the close of business on March 10, 2013, in accordance with the Terms and Conditions of our customers' use of the website. You may view your account details and settled account balances by logging into the website.
"At this time and until further notice, it is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded.
"The Company will continue the maintenance and technology operations of the exchange system so that all information is preserved properly.
"We are not able to provide telephone support or live help services at this time, please contact the company by email at: firstname.lastname@example.org
"We appreciate your custom and support over the years. We are committed to reporting faithfully the status of things as they are clarified and hope you will bear with us as we do all we can to resume operations as promptly as possible."
Any predictions on whether it will ever be back?
Jon Stossel, for one, would seem to hope it will be. Writing for FoxBusiness, he was already regretting Intrade's inevitable demise last November. Though it had its share of missed calls, he looked at its hits and concluded that Intrade's disappearance would be "terrible news for all of us who want more input into what's going to happen in the future. Bettors on Intrade.com have made incredibly accurate predictions about elections - because they, unlike TV pundits, have real money on the line. This year, I watched on election night as TV pundits said "too close to call... too close to call..." while the bettors on Intrade knew that it was not a close call. Intrade has also successfully predicted events like Saddam Hussein's capture and the winner of the Oscars. People with the best information trade about those events, and drive up the odds on Intrade."
But the problem, as Business Insider has written, is that "the company was always operating in a clearly gray area of the law, as it crossed the line into both futures trading and online gambling. Late last year it totally blocked U.S. users, as it was sued by U.S. regulators."