About two weeks ago, I wrote about how it seemed that Intrade was being gamed by Republicans. The Intrade Exchange Operations Manager, Carl Wolfenden, commented that I was wrong about a particular trade that had looked fishy. It turned out to be a statistical fluke that worked itself out. Still, I had questions.
And I still do.
Right now, Intrade gives President Obama a 65.0% chance of re-election. This is much lower than the polls would indicate. But more important, this is significantly less than the other betting markets. PredictWise reports that Betfair gives Obama a 77.8% change of re-election. And further, IEM (Iowa Electronic Markets) gives Obama a 77.3% chance of winning the popular vote (which polls suggest he should have a smaller chance of winning).
What is going on here? Intrade gives Obama 12 percentage points less a chance of winning re-election than the other betting markets. This just doesn’t make sense. If it were the case that betters at Intrade knew something that others don’t know, they could make more money by moving to Betfair or IEM.
Again I ask: are Republicans gaming Intrade?
Update (6 November 2012 8:37 am)
Intrade has moved a lot since I wrote this. They are now giving Obama a 72.5% chance of winning—much closer to the other firms.