The current trend to promote almost illiquid betting markets as being predictive, looks set to backfire bigstyle. In a nutshell, to date the so called "prediction markets" have called it wrong in New Hampshire (Democrats), Michigan (Republicans) and South Carolina (Republicans).

Prediction market advocates, in some instances weighed down with the baggage of being too closely associated with the prediction market industry (through affiliate schemes etc), are often guilty of churning out subjective, biased research, seemingly in an attempt to promote the prediction market industry and to lure traders into the markets.

Unscientific comparisons are continually being made between the prediction markets and electoral polls, and, moreover, markets are deemed to have been predictive, when it would seem that all they have actually done is respond to the unwinding of the vote count (stale news). No particular attempt is made to discuss market turnover, market depth, or, indeed, the number of traders trading in a particular market.

The publication of what is, in many instances, utter garbage does nothing but a big disservice to the fledgling prediction market industry.

Moreover, it is unfortunate that prediction market industry watchers, who purport to be independent and subjective, indulge the writers of such nonsense; in the process revealing themselves to be nothing more than placemen and sycophants of unquestioning loyalty.

The tables below reveal the Betfair market on the South Carolina Primary (Republican), during a four hour period after voting had begun. The tables reveal both the thinness of the market, and the fact that the market was merely shadowing the polls, through declaring Huckabee the most likely winner.