Betting the House (and Senate)
Nov. 5, 2006:
Forget polls. Politicians and policymakers could soon turn to “prediction markets” to take the nation’s pulse—and plan their next move.
What could Tom Patrick possibly have to do with the future of politics? He is 49 years old. He once won a national bridge tournament. He lives in Yekaterinburg, the fifth-largest city in Russia. To his west are the Ural Mountains; to his east is Siberia. His business card says “commodities trader,” but right now he is “between jobs.” Which means that the first thing he does each morning is fire up his 128K-modem and steer one of his five computers (three desktops, one laptop, one HP iPaq handheld) to the just-launched Washington Stock Exchange. For much of the rest of the day, Patrick, an avowed political junkie with undergraduate degrees in psychology and math and an MBA from the University of Chicago, will “trade” on the WSX (thewsx.com). He will buy shares of a stock called “George Allen (R) to Win VA Senate Seat.” He will sell “Barack Obama (D) Announces ’08 Campaign.” And when all is said and done—at 2 a.m. in Yekaterinburg, when the U.S. business day is ending—he will have pocketed a substantial sum of “money.” (Internet gambling is illegal on U.S.-based sites, so the exchange deals in play money, which it calls Washington dollars.) Patrick—or 20010101, his nom d’écran—currently tops the WSX’s list of most profitable players. His take: W$45 million. His closest rival trails by W$31 million. “I’m doing this every waking hour,” he says. “Much to my wife’s chagrin"...