Recent prediction market news

I’ve recently come across a couple of interesting notes in the prediction market industry.

#1 — Trading UK Housing Prices

CityOdds, based in London, has recently opened a prediction market (currently marketed as a competition) to predict a UK housing market index. While this is a play-money market, there is a £10,000 first-place prize.

CityOdds runs both fantasy markets, as well as real-money markets on currencies and other commodities. Mike Chadney, the founder, is a good guy and experienced “City” man. Check out the housing market here: http://www.cityodds.com/hpitrading.html

#2 — Predictify shuts down

Predictify made a bit of a splash when Scott Adams used them to forecast how many sales of his (then) new book were going to be sold.

It seemed a bit of an odd company; venture-funded, but with people who had no background in prediction markets at all. They offered a small number of markets where accurate forecasting would win cash, while most markets were just for leaderboard position. (My trading was perhaps typical: I’d log it and only scan the markets where I could win cash and ignore the rest.)

Well, they’ve died. According to an announcement on their website:

Due to the tough economic climate, we are planning to cease operations and shut down the company in the near future. If you have an account balance of $20 or more, please visit your account page and enter your withdrawal information by 11:59pm on August 31, 2009 to receive payment.

We sincerely enjoyed building and operating Predictify, and we’re glad that you could be a part of it.

The Predictify Team

My question is this: what does this mean for Crowdcast?

Crowdcast has an absolutely fantastic team who have great experience in prediction markets. But can they thrive as a venture-funded company? I’m hopeful, but perhaps am more skeptical that there are simply enough customers truly interested in their level of solution. Particularly as so many companies need hand-holding and thus a lot of expensive people-time through the early stages of implementation, are the profits sufficient to satisfy investors?

I don’t know, but I do believe they’ve at least got the people to give it a go. (Strangely enough, it was Crowdcast’s founder Mat Fogarty who originally told me about Predictify well before their launched.)