[ISN] Web Odds Poor for U.N. Resolution

From: InfoSec News (isnat_private)
Date: Mon Mar 17 2003 - 03:15:46 PST

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    [C4I.org has had a link with TradeSports for about a month, 
    It would be interesting if they started trading contracts on 
    information security or the chances of real cyberterrorism 
    on their site. :)  - WK]
    By Joanna Glasner 
    March 12, 2003
    As the Bush administration continues its efforts to rally support from 
    U.N. Security Council members for a second resolution authorizing use 
    of force against Iraq, online traders are giving the measure only the 
    slimmest odds of passing. 
    At the online betting exchange TradeSports.com, traders betting on 
    whether the Security Council will approve the resolution give such a 
    measure only an 11 percent chance of passing by the end of the month, 
    and a 21 percent likelihood of gaining approval by the end of June. 
    The odds are down substantially from early February, about two weeks 
    after betting began, when odds of a second resolution passing by March 
    surpassed 60 percent. But in the intervening weeks, political reality 
    interfered. France's disclosure this week that it is willing to veto a 
    resolution authorizing war pushed the options to all-time lows. 
    John Delaney, TradeSports CEO and founder, says the trading odds 
    simply reflect current events. 
    "A picture paints a thousand words," he said, looking at the two-month 
    chart. "This obviously reduces the chance of it passing." 
    Bets on the outcome of the U.N. vote are one of two types of 
    "contracts" tied to the Iraq conflict that TradeSports is offering. 
    The other contract -- the second most actively traded contract on the 
    exchange -- lets traders bet on how long Saddam Hussein is likely to 
    remain leader of Iraq. 
    Despite low odds on the chance of a second resolution passing, traders 
    are quite confident about the prospect of Saddam's near-term ouster. 
    According to current odds, Saddam has about an 87 percent chance of 
    being kicked out of office by the end of June. 
    Justin Wolfers, a Stanford University economics professor who has 
    studied political betting exchanges, says the odds indicate that the 
    United Nations is "decreasingly relevant" to traders assessing the 
    probability of war. 
    Although political bets aren't where TradeSports makes most of its 
    money, Delaney, a former investment banker who launched the site last 
    year, says they're a growing part of the business. In addition to the 
    Iraq-related wagers, the site offers contracts tied to the date of 
    Osama bin Laden's possible capture, the Homeland Security Department's 
    alert level, and the outcome of elections in the United States and 
    So far, the Iraq-related contracts have drawn traders from more than 
    20 countries, with most of the money coming from the United States, 
    according to Delaney. About $350,000 has been wagered on the most 
    heavily traded contract, which assesses Saddam's likelihood of 
    remaining in power at the end of March. 
    In comparison, more than $600,000 has been wagered on the most active 
    contract, a bet on whether the University of Arizona will win the NCAA 
    men's basketball championships. For both political and sporting 
    events, traders pay a $0.04 commission for each $10 contract they buy 
    or sell. Odds are set by traders and are not predetermined by 
    TradeSports, out of Dublin, Ireland, is one of several sites that 
    provide trading on political events. Others include William Hill, a 
    bookmaker based in England, and the Iowa Electronic Markets, a 
    nonprofit educational organization that runs a financial market to 
    predict outcomes of U.S. elections. 
    Although the dollar sums wagered in electronic markets are minuscule 
    in comparison to the volumes traded on traditional financial markets, 
    Wolfers believes they are telling indicators of political events. 
    Unlike political pundits, he says, traders put their money where their 
    mouths are. 
    "In the financial markets, political posturing will put you at nothing 
    but a loss," he said. 
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