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‘Right wing’ iPredict in bed with ‘Labour’ UMR

Matthew Hooton’s Exceltium is finalising a joint venture with Australasian polling company UMR Research to commercially market iPredict.

iPredict is an online marketplace, where close to 6000 members bet real money on contracts, from the outcome of various elections to whether the price of petrol will rise this week.

Exceltium and URM have signed a head of agreement. The two parties are now “crossing the i’s and dotting the t’s,” Mr Hooton said.

The deal should close in the next couple of weeks.

The arrangement would see Exceltium and UMR market iPredict’s service to companies who wanted to use the site for commercial research. The pair would also market iPredict’s software platform internationally.

VicLink would continue to hold 100% ownership of iPredict, and control its hosting.

Exceltium takes day-to-day control
The deal comes on the heels of news that iPredict chief executive Matt Burgess leave to become an economic advisor to Finance Minister Bill English – and an accompanying change in the day-to-day running of the site.

iPredict contracts are now opened and closed by Exceltium staff member Oliver Ibbetson (who graduated Victoria in 2010 with a BCA, Commercial Law and Accounting).

Matt Burgess started his new role with the Finance Minister last Monday.

"iPredict has operated without a glitch, so the transfer to the new administrator has been successful," Mr Hooton said this morning.

Perception of right wing bias 
VicLink launched iPredict just before the 2008 election.

Mr Hooton’s PR and political lobbying outfit Exceltium has promoted it since 2010.

Given the brisk tone of some of Mr Hooton’s political commentary for NBR, and other media, the Dominion Post has reported “perceptions of right wing bias” around iPredict.

Mr Hooton rejected the notion as “ridiculous”.

An iPredict contract currently gives a 58% probability Labour will form a government after the next general election, with a 45% probability David Shearer will be Prime Minister by 1 January 2015, Mr Hooton said.

“If we’re trying to manipulate public opinion [to the right], we’re not very successful."

The Exceltium principal also pointed out that UMR carries out research for the Australian Labor Party, and the NZ Labour Party.

The profit motive
His core argument, however, is that the profit motive eliminates bias from online prediction market places such as iPredict.

Mr Hooton said there had been attempts to distort iPredict contracts in the run-up to the recent general election, both from mischief makers or "irrationally exuberant" diehards trying to push their pet party – but they had been quickly snuffed out. An iPredict blog on the topic cites academic research that says such aberrations are quickly corrected because they create a profit-making opportunity for more mainstream punters - in fact increasing overall accuracy.

In the run-up to the general election, iPredict constantly had National in the late forties, while traditional polls had the party in the 50s for much of the campaign, Mr Hooton said. (National received 47.9% of the vote on election day, with a final tally of 47.3%; see tables of iPredict versus polling company’s final polls here).

Asked if iPredict had any plans to open a contract on how long Mr Burgess would last in Mr English’s office, Mr Hooton said no.

NBR understands from a well-placed source that Mr Burgess is "somewhat to the right" of Mr English.

More by Chris Keall

Comments and questions
4

It surprises me that this service is allowed to exist commercially, based as it is on insider knowledge, to a very large extent.

It is all legal: http://www.legislation.govt.nz/regulation/public/2008/0285/latest/whole.html

This is an interesting story Chris, but the headline is a bit much. Can we blame your online editor? ;)

I understand that there are issues with 'insider trading', in that Hooton or David Farrar are able to aggressively push a line, and then profit from the resulting fluctuations caused by their opinion pieces, even if these are only minor.
"His core argument, however, is that the profit motive eliminates bias from online prediction market places such as iPredict."
Nice one, profit eliminates bias. Profit also incentivises.... whatever will produce a return.
I find it hard to consider iPredict as a valid intellectual exercise given the small-scale nature of new zealand's political punditry, and the possibility of distortions, though I accept that these are likely to be short term only.