Dirty politics

8 October 2008 By Jeff Segal

A few online exchanges allow bets on the US presidential race and other contests. In theory, this should be a very accurate barometer of Obama and McCain s odds. But some sites show pricing discrepancies that could be attempts to distort the markets, says Jeff Segal.

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The current prices for futures contracts on the US Presidential Election show discrepancies in a few different online prediction markets.

On Intrade, an Irelandbased exchange, the current price for a future on John McCain winning the presidency is 15, indicating a 15% chance of the event occurring.

On Betfair, based out of the UK, the same contract has a price of 7.6, which implies a 13% chance of the event occurring. And on the Iowa Election Market a similar contract for the Republican candidate to be elected has a price of 14.

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