Will President Obama be assassinated in the first year of his tenure? It's a depressing thought but, as reported in last week's Independent on Sunday, it's a possibility too real to ignore. And over the past month $81,783 (£55,300) has been wagered on it. Not in the real world, or even in real money, but on a new prediction market website called Hubdub, which allows punters to bet on the outcomes of everyday news stories.
Launched earlier this year in the US, a UK version hit the web 10 days ago. And for the desk-bound worker, it already promises to rival Facebook as a time-wasting opportunity. Anyone can create a question, and anyone can place a bet on its likely outcome – how much Somalian pirates will get for the Sirius Star say, or how long George Osborne's career has left to run.
"I got a call from a woman the other day begging me to close her account," says Nigel Eccles, the brains behind the site. "She complained she had become too addicted and it was stopping her from doing any work."
It's not hard to see Hubdub's addictive potential. Markets that run on breaking stories change considerably in the course of a day, encouraging users to return to the site. Stories with a predefined timeframe, such as the result of tomorrow's pre-Budget report – punters are predicting tax cuts of £5bn to £10bn – are perhaps a more manageable form of excitement. Longer-term predictions like "Who will be the next Dr Who?" may persuade users to come back as relevant information is made public.
For employees of The Independent there is a legitimate excuse to add Hubdub to their favourites, as the paper is its media partner. Browsers of independent.co.uk can, after reading a story, place a bet on its outcome by clicking through to Hubdub. At the time of writing, the burning question was, "Will John Sergeant be reinstated on Strictly Come Dancing due to popular demand?" His chances were, sadly, a mere 8 per cent, down 12 points on the previous day.
It may be compulsive, even revealing, but is gambling to be encouraged? Hubdub's defence is that no real money changes hands: users are given 1,000 imaginary dollars when they sign up, which can be placed in wagers ranging from $25 to $100. Every day a user logs on to the site, $20 is put in their account, so even the unluckiest gambler can win back their losses over time. In the scheme of online gambling, Hubdub is a benign form of entertainment.
But questions of taste are being asked about some of Hubdub's markets. Predictions such as the likelihood of an Obama assassination, known as death-pools, have sparked outrage. One question recently posted asks, "Will Jade Goody still be alive by 1 August 2009?", following reports that the former Big Brother contestant has cancer. "You cannot have markets on people's lives," says one user, "This is disgusting."
"Hubdub is a community, and it is the community that sets the boundaries as to what is acceptable," says Eccles. "However, this is one issue we still don't have a consensus on. Our policy is that death markets are acceptable as long as they are in the context of a news story. Some users find them objectionable, while others feel that as a news site it is important that Hubdub covers all elements of news, not just the nice parts."
Operated by five people from an office in Edinburgh, Hubdub was dreamt up last year by Eccles, a maths graduate who had previously set up Flutter.com, a website enabling bets between anyone on any subject. Although a flawed concept, Flutter was later bought by Betfair, which has grown to become the biggest online betting exchange with two million users and a multi-million-pound weekly turnover.
The difference with Hubdub is that no real money is involved, as the site is free to join and use. It does not host any advertising, and although now in partnership with The Independent, Reuters and The Huffington Post, these are partners not sponsors. As yet, Hubdub has no obvious revenue streams.
This will come, according to Eccles, who says the data amassed by the site will have a value of its own that could one day be translated into cash. Hubdub uses sophisticated technology that he foresees will be licensed to major news sites. "We believe we have an exceptionally exciting technology which lets people engage much more closely with big news stories. Our first objective is to get that technology much more widely distributed."
One group of media people who may not share Eccles's enthusiasm are newspaper columnists and TV pundits. Eccles plans to collate and publish data on all predictions and their eventual outcomes. "Early analysis of Hubdub's forecasts has shown that, unlike pundits, they are highly accurate."Reuse content