It's anyone's bet whether President George W. Bush will get personal accounts for Social Security enacted or who will succeed Alan Greenspan as Federal Reserve Board chairman. And anyone can wager on the outcomes at TradeSports.com.
The Dublin-based sports betting platform started contracts allowing bets on the possibility of these non-sporting events. But soon Trade Exchange Network Ltd., the parent of TradeSports.com, hopes to launch a U.S.-regulated exchange featuring a range of economic and financial style contracts, the company announced. Trade Exchange expects to apply with the Commodity Futures Trading Commission soon to register as a designated contract market and derivatives clearing organization, said Mike Knesevitch, director-communications and business strategy.
The new exchange would be designed for institutional investors seeking to manage financial risks that are not provided for on traditional exchanges, he said.
TradeSports has three contracts on Social Security reform. Each has a different expiration — Dec. 31, 2005; June 30, 2006; and Dec. 31, 2006 — and each offers a payout of $10 if the bill is enacted by its expiration date, or nothing if it is not. The December 2005 contract was priced at $1.20 as of May 23, so essentially, the TradeSports market is putting the odds of passage of the bill at 12%. The price on the contract has ranged from $1.15 to $2 since trading began May 11. Total volume on the contract since inception is 200 contracts.
For the Fed post, no one has placed money on the contracts of any of the candidates except that of R. Glenn Hubbard. That contract, which began trading May 16, was priced May 23 at $3.50, giving him 35% odds of succeeding Mr. Greenspan.