Some would-be-winners got pretty heated. One commenter’s take:
Resolving this to “no” is completely antithetical to the purpose and spirit of the market. The purpose of the market is to accurately assess the likelihood of a particular event, not to describe that [event] in excruciating detail. The intent of this market clearly was whether the moderator introduced the concept of “birtherism.” The fact that the rules allow PredictIt the latitude of interpretation implicitly support this.
Another bettor fought back:
The rules were quite clear. The moderator must say the words “birther”, “birthers”, or “birtherism”. I bet based on those rules. The moderator did not say any of those words.
The “spirit” of the market was expressed very clearly in the rules. I'm sorry for your loss.
When the debate concluded, PredictIt had two choices, both bad. It could stick with the contract language and deliver a “No” ruling, appearing pedantic and pissing off bettors who felt they were cheated out of a win. Or it can acknowledge the intent of the question and switch its ruling to a “Yes.” But its reputation could suffer. After all, if the exchange shows it is willing to fiddle around with one contract after the fact, what’s to stop it from invalidating a hundred others later?
PredictIt opted for “No” for that very reason. “Why would you put your money into a market where the rules could change at any time?” asked spokesperson Brandi Travis. “That’s not the kind of market we want to run… You just can’t go against the rules. That’s why they’re written. That’s why they’re very black-and-white.”
This has come up before. In 2015, one PredictIt wager asked whether New Jersey Governor Chris Christie would enter the race for president by the end of June. On the very last day of the June, Christie announced his intention to run—but he didn’t file his Federal Elections Commission paperwork until the next day. The gamblers who bet on his June entrance lost their money.
Similarly, in 2012, another exchange awarded payouts to gamblers who bet Mitt Romney would win the Iowa Republican caucuses. A later recount would confirm a tie between Romney and Rick Santorum, but the exchange held firm, arguing the original results fulfilled the rules of the betting contract.
So much rests on how the bets are worded; they must be precise enough to eliminate ambiguity, but broad enough to encompass every possibility. “It is really, really hard to write questions,” said David Rothschild, an economist at Microsoft who studies prediction markets. “I cannot stress enough how many times professional markets, well-done markets have had controversies over this. There are just so many different things that could happen.”
To most, this probably seems like minor kerfuffle. Gambling in political betting markets is a niche fascination at best; most people don’t get a thrill out of guessing whether Obama’s approval rating will be 51 percent or higher between October 4 and October 6.