If a disruptive technology is developed…
…outside of the Northern California and no one in the Valley had already thought of it is it still a disruption?
Don’t get me wrong, I’m a huge admirer of the entrepreneurial and innovative and generally open-minded spirit that reigns on the West Coast but I’d be lying if the implicit belief of its denizens that everything is thought of first or done best in the ‘valley’ isn’t a just a bit exasperating…
Ross and JP simultaneously sent me a link to Mr. Arrington’s breathless post entitled: “PicksPal Could Disrupt Sports Betting Markets.” Pul-lease… The sports betting market was well and truly disrupted (in the Google sense of the word) 5 years ago (!!!) when the world (ahem…except for the US, bless) was introduced to Betfair. In the United Kingdom. I guess I shouldn’t be too harsh as Betfair has chosen to take a very conservative approach and has never accepted any business from the US, but follow-on competitors like TradeSports have so he shouldn’t be ignorant to the whole idea of a sports exchange. And given the wealth of predicition market sites and ideas (however hobbled the actual markets themselves might be by the luddite American polity), his wide-eyed appreciation of PicksPal is at best a case of post first, search later.
I am saved the effort of a technical critique of the relative merits and/or lack thereof by the wise crowd that has already contributed a large number of concise and accurate criticisms in the comment to the original post, but I would like to take the opportunity to (once again) highlight the blatant hypocrisy brought forth by this example.
Am I the only one who finds it ridiculous that sites like PicksPal are obliged to play for points and prizes instead of money? Here’s a happy customer quote on their homepage:
“It came down to the last field goal banging off the left upright, but I bagged an HDTV. Awesome.”- GoodLow, Dallas
Hello? Anyone ever hear of eBay? So does old GoodLow need to sign a waiver promising not to take his HDTV and monetize it on eBay? I hope the folks at PicksPal give me some shares in the company for giving them the idea to tack-on an eBay selling service onto their site and automate the process for their customers, taking a nice commission along the way. Also implicit in their business model is the ‘fact’ that tens of millions of Americans bet on sports often (think March Madness, Super Bowl, etc.) in office pools and amongst friends but do so illegally. I guess there is no appetite to throw half the country in jail, probably not a big vote-winner… As far as I can tell the fabric of American society has yet to be irreparably destroyed by Marge taking Pittsburg and the points on Sunday…but perhaps the fact that much of this illegal trading - oops sorry betting - happens in the office and not while people are “in their bathrobes” is of huge comfort to Congressman Frank Wolf and his colleagues.
If you haven’t clicked through to read the TechCrunch post (linked to above), it highlights that PicksPal will be selling the picks of their best predictors. Aside from the problems of randomness (see the TechCrunch comments for explanation) assume there really are people that are expert at picking winners and losers. Unless they move to Las Vegas, the US does not allow them to make a legitimate living from their expertise. Because they are knowledgeable about say,basketball rather than interest rates or precious metals or natural gas (sorry couldn’t resist!), the US government doesn’t allow them the opportunity to start a hedgefund, live in Greenwich and live happily ever after on 2 and 20. 
Hey it’s not just the US either, France is getting into the prohibition game too, arresting the joint-CEOs of Bwin a couple days ago.
Of course it’s all about money. Incumbents wanting to keep their rents. Governments wanting their vig. Legalize, regulate and tax. It worked (-ish) for financial and commodity markets. It will work for these markets. The faster it gets done the better off all will be. Hell, the tax take from legitimizing March Madness alone might close the US budget deficit!
September 20th, 2006 at 12:40 pm
This reminds me of the hypocrisy of the popular Pachinko parlours in Japan. Similarly to the US, Japanese law prohibits them from paying out cash, so instead you win tokens that can be exchanged for more playing time or for prizes.
However there is nearly always a small exchange shop next door to the big parlours where you can convert your tokens and prizes to cash. Therefore the parlours operate in a quasi-legal grey area which brings them into association with organised crime. Thus a perfectly normal recreational activity for millions of respectable Japanese becomes criminalized.
September 20th, 2006 at 2:33 pm
[…] I was getting all set to tear into the ridiculousness of ‘fantasy sports’ site PicksPal (recently reviewed in TechCrunch) ‘expert’ strategy, but the commenters on that post have already done it for me. Just go read Nassim Taleb’s Fooled By Randomness. So no more on how PicksPal looks like nothing more than the sports version of an investment newsletter scam. Instead, I’ll point readers to Sean Park’s quality rant against US government hypocrisy and remind everyone that your government is paid for. Online ’sports markets’ aren’t legal in America in part because the political action committees of the already-legal gambling industry contribute heavily to Congressional and Senate campaigns, and in part because the government hasn’t figured out to tax it yet. Valleywag today makes the same point about ‘net neutrality’ - also a no-flyer, because the telcos are major campaign contributors. And even the Department of Justice isn’t going to get the National Association of Realtors to stop their non-competitive practices - not when their PAC’s pockets are this deep. […]
October 12th, 2006 at 8:04 am
[…] Anyhow it does not seem that Dr. Frist is a Park Paradigm reader…or if he is, the legalize, regulate and tax message failed miserably to resonate with him. The Economist does a great job articulating this position in a leader this week (although with the parochial “our-way-or-the-highway” mindset seemingly so prevalent on the Hill these days, a remonstration from such a foreign, high-faluting journal such as The Economist will probably been worn as a badge of honour by the Deliverance gang in Congress…): Internet gambling is good for consumers. Too bad America wants to ban it […]