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85 percent of customers at the betting exchange intrade.com believe that healthcare reform will pass. Those numbers are up from 40 percent in late February when those efforts looked doomed. Betting exchanges tend to be especially accurate.
A betting exchange like intrade.com is a form of bookmaking in which the operator offsets its risk perfectly through technology, such that the effect to the customer is that customers are seen to bet between themselves. Coined because of its apparent similarities to a stock exchange - it is often defined as "a stock exchange for bets" - it is therefore commonly seen as a peer-to-peer gambling website.
Steven Gjerstad (University of Arizona) in his paper "Risk Aversion, Beliefs, and Prediction Market Equilibrium," has shown that prediction market prices are very close to the mean belief of market participants if the agents are risk averse and the distribution of beliefs is spread out (as with a normal distribution, for example). Justin Wolfers (Wharton) and Eric Zitzewitz (Dartmouth) have obtained similar results.
Assuming the gambling public is correct, healthcare reform could pass as early as this Sunday. Indeed the cable news networks are already reporting in a manner suggesting passage is inevitable.
One by one, undecided Democratic lawmakers began choosing sides Friday, a majority of whom declared their support.
The health care reform program would affect nearly every American and remake one-sixth of the U.S. economy. For the first time Americans would be required to have health care insurance and face penalties if they refused. The United States is the only major industrialized country that does not have a comprehensive national health care plan.
Alejandro Botticelli, Gambling911.com
