Stossel explains how people like to gamble, and some like to bet on the Oscars, and which movies, actors, directors, etc. will take home Academy Awards. This is done at something called the Hollywood Stock Exchange. Who knew?
At least it used to be done at the Hollywood Stock Exchange. Last year, the federal govt., in all it's nanny state wisdom, banned gambling on the Oscars. Stossel elaborates:
"What fun is that? It's not only less fun, it's also makes the prediction market less accurate. People are more careful when they have real money on the line, and the chance of losing money weeds out the frivolous guessers. Prediction markets are valuable for predicting all kinds of things because the prospect of making money attracts people with knowledge, judgment and a good sense of the future. More information is better than less. The people most confident in their information bet the most. That's why speculation is a sound market institution.Can Chris and Barney spell 'federal overreach?' The States are charged with regulation or prohibition of gambling. So why does the federal govt. care about gambling in California? And, in particular, one specific community engaged in gambling?
The promoters of the Hollywood Stock Exchange would have preferred the use of real money but -- surprise! -- government forbids it. The Frank-Dodd financial regulation law killed the real market at the behest of some in the movie industry."
Personally, I don't gamble. I derive far more pleasure from emptying my wallet and setting its contents on fire. But Mr. Stossel's bigger issue was to illustrate the value of information derived from - not only what gets bet on - but who bets on it. Information is power, and in Hollywood that information can make or break fortunes. Just like Wall Street. Yet this particular information derived from this prediction market has been neutered.
Why? Special interests with money and access.
"Rich Jacobs, president of the Hollywood Stock Exchange, says that some studios wanted it killed because they didn't want public discussion of their plans.Perhaps buying off politicians for special interest legislation in order to manipulate free markets for personal gain is OK in hollyweird land. Yet, just like the 'you can't legislate morality/prohibition didn't work/kids are gonna do it anyway axioms, people still bet on the Oscars - with real money.
Intrade.com, located in Ireland, is more than happy to take your money for Oscar.