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Huge money for some in Clinton NH Victory

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JMDEM Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-12-08 06:03 PM
Original message
Huge money for some in Clinton NH Victory
Wow -- some people may have made HUGE money on Clinton's victory in NH. Maybe. I'm not sure. But it sure would be interesting if those betting on Clinton could be traced. We're talking a MILLION dollar payoff for a $10,000 bet. If there was fraud in NH, maybe it boils down to sheer greed by just a few folks.


" Online traders who placed a $100 (£51) bet on Mrs Clinton were rewarded with pay-offs of as much as $10,000 after her upset victory over Barack Obama, trading on Intrade, a Dublin-based online prediction market, showed.

Her chances of winning in New Hampshire plummeted to a record low of 1 per cent after her defeat in last week's Iowa caucuses. It prompted online traders to shift almost all their bets to Mr Obama, Intrade data showed.

Obama's chances surged to as high as 99 per cent on Tuesday after polls indicated that he was also ahead in New Hampshire."

http://www.ft.com/cms/s/4cef4698-bf1f-11dc-8c61-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F4cef4698-bf1f-11dc-8c61-0000779fd2ac.html%3Fnclick_check%3D1&_i_referer=http%3A%2F%2Fwww.democraticunderground.com%2Fdiscuss%2Fduboard.php%3Faz%3Dview_all%26address%3D203x492717&nclick_check=1


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JackRiddler Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-12-08 06:22 PM
Response to Original message
1. It's kind of a ridiculous idea...
But really not that ridiculous. Like, if had a friend who could place this bet... and if you held some minor position at Premier/Diebold or elsewhere that allowed you access to the memory cards... How many people would be happy to fix an election if they could make a million, or more?

I'm betting Intrade may soon want to suspend their election betting.
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JMDEM Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-12-08 08:43 PM
Response to Reply #1
2. Now how many people would have to fix those machines?
Maybe fewer than a dozen. Probably mostly nerds. 100 grand is big bucks to a nerd. So they all place $1,000 down in that betting pool.

Imagine if Diebold was blown out of the water by clueless nerds out for a good payday and nothing more?

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JackRiddler Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-12-08 10:04 PM
Response to Reply #2
3. Dude...
You've got the plot to a fucken' great movie there. Like, a classic heist film!
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Awsi Dooger Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-14-08 02:31 AM
Response to Original message
4. LOL; you won't find many million dollar payoffs on Intrade
Edited on Mon Jan-14-08 02:42 AM by Awsi Dooger
It's based on low amounts, $100 contracts. At any given point there are bids and offers, usually small numbers of contracts available. A half dozen at a time is a good nab. It's even lower now than in '04, due to the regulations against internet gambling, which have drove speculators away. Intrade markets are generally thin.

This is no different than election day '04, when I got stuck with a big loss on Kerry contracts on Intrade based on the early exit polls. I was working GOTV and unable to pay close attention to the specifics. My friend grabbed as many Kerry contracts as he could within the range we were willing to trade. It continued to shift in that direction until it became obvious Bush would prevail, then Intrade swung sharply toward that side. I was still working GOTV, otherwise I would have tried to reverse course and bail out. By the time I got home it was too late, the Bush contracts already at steep level.

Obviously, the markets react to polling data and available info, rather than the other way around. They certainly don't know more than the collective wisdom of the people involved.

Hillary's futures dove after Iowa then took off on NH night, once the results dribbled in. I wasn't paying daily attention to politics at that point, and frankly right now I'm sick I didn't grab Hillary nomination contracts at bargain rates. I had no idea they dropped so low, based on one result.

A perfect market does not always identify the winner. A 90% market should be wrong 10% of the time, not never. What the markets do is summarize the poll findings and conventional wisdom into a single number, the theoretical percentage.

Without the morons, there's no incentive for the more astute speculators to get involved. You're betting against someone else, not the house at a fixed rate. If you follow Intrade closely day to day, you'll notice traders who overreact to leads in basketball games or football games, often setting the prices far above correct likelihood based on score and situation. It's hardly atypical for more speculators than typical to get involved on big events like a high profile primary, not unlike a Super Bowl earning surreal numbers of novice bettors. I can almost guarantee the Intrade prices would not have fluctuated so wildly if only the veteran investors had been playing. The veterans no doubt were the ones who grabbed Obama contracts quickly after the Iowa result, then took Hillary once the results indicated she had far greater chance to win than was projected mere hours earlier. It's always a matter of value for the day to day guys, often wagering on contracts you think will lose, but not as often as your number indicates. Give me a 20 contract on a 40 likelihood every time. That's the basics of Intrade.

If someone were to fix an outcome, there would be evidence of heavy and unusual wagering activity ahead of time, when it made no sense based on the pricing. That's what Nevada gaming regulators look for, and it's what sparked the recent probe into a few specific tennis results. In this case nothing strange took place, merely major shifts toward the individual with the apparent advantage, in one direction post-Iowa then the other way on NH night. It only occurs with man-to-man markets, which stay open during the event. If a place like Las Vegas offered election betting, the wagering would close as soon as the polls opened, and there wouldn't be late correction when the results differed sharply from expectation. That's all that happened here.

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