The dangers of betting on world events

The whole Wisdom of Crowds kick has made online betting exchanges the new “in” thing. The NYT‘s John Tierney was so impressed by the fact that one of the exchanges called each of the 50 states correctly in 2004 that he fretted he was inaugurating his column “just as the job is being outsourced.” But a great piece on the invaluable PoliticalBetting.com points out one of the dangers of betting on world events: How do you decide what actually happened?

Obviously, if you’re gambling on something clear-cut like who will be the next French president, it is fairly simple. But when you start wagering on more subjective matters, things get complicated – and fast. As the article points out, Trade Sports is refusing to pay people who bet that North Korea would test a missile by the end of July 2006 because the betting contract stipulated that the Pentagon would have to verify it. The Pentagon hasn’t done so, even though the White House has. 

So, those who like a good gamble are probably better off sticking to elections and the like. If you want a tip for the day, I’d say that there’s a better than 2.6 percent chance of Barack Obama being the Democratic presidential nominee—Annie Leibovitz doesn’t photograph just any senator—so buy that contract. But do so at your own risk. Passport is not responsible for any losses you may incur.