Kaplan, Mark. “Wall Street Firm Uses Algorithms to Make Sports Betting Like Stock Trading.” Wired Magazine. Nov. 1, 2010. Web. 25 February 2011
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Can the technology designed to help gamblers bet on football and other sporting events also help Wall Street firms bet on the rise and fall of stocks? Mark Kaplan, writing for Wired Magazine states in his article, “Wall Street Firm Uses Algorithms to Make Sports Betting Like Stock Trading,” that in the future stockholders will be able to bet on the performance of stocks without actually owning them. The technology that Kaplan refers to is software called Midas. Lee Amaitis, CEO of Cantor Gaming, and Andrew Garrood, a mathematician, came up with the idea as they were discussing brokers and bookies. Garrood made the comment, “You don’t know if the market will go up or down any more than you know who will win the next horse race. This software uses mathematical patterns to predict the odds in football and other games. This same software could be used to predict the rise and fall of the stock market. Cantor Fitzgerald made a trial run with Hollywood futures by letting people trade on movie box-office results, but the Motion Picture Association of America objected. Amaitis says, “We are not building a sports-betting operation; we are building a trading operation.” Kaplan’s point of view is “What could possibly go wrong?”
What could go wrong is the cultural impact on society. Kaplan says, “To many people on Wall Street gambling is a dirty word.” John Bogle, founder of the risk-averse index-fund titan Vanguard Group said “Wall Street hates being thought of as a gambling operation, but that’s how it makes its money.” The Wall Street Brokers want people to feel that their companies are well-respected and serious without the suggestion that they are gamblers. Companies such as Goldman Sachs would be concerned about the publicity such a move toward betting on the market would generate. Amaitis says he isn’t worried about reputation; he is only concerned about making money. His firm, Cantor, was “the first to do fully electronic US bond market trades with customers.” However Cantor is a private company and therefore it does not have to worry about bad press. Cantor has never borrowed government money, so it can be more flexible. A reporter for The New York Times condemned Goldman Sach’s debt as “no different than betting on the New York Yankees vs. the Oakland Athletics and at Senate hearings Senator Claire McCaskill of Missouri told Goldman Sachs, “you had less oversight than a pit boss in Las Vegas.” If this software were used to make bets on the Stock Market, it would have a tremendous impact on our culture.
